Sacombank borrows $150 mln from Europe

Saigon Thuong Tin Commercial Joint Stock Bank, or Sacombank as it is commonly known, has signed an agreement to borrow US$150 million from the Netherlands Development Finance Company.

The Dutch development agency has lent $25 million while five other European finance institutions will provide a further $70 million in the second quarter.

The final $55 million will be provided by other European development funds at the end of 2011.

The loan is aimed at enabling more lending to the private sector, especially small and medium-seized firms.

The Ho Chi Minh-based bank has a chartered capital of VND9.179 trillion (US$440.5 million), a network of over 360 branches and transaction offices in 47 cities and provinces, and a branch each in Laos and Cambodia.

The Dutch agency supports the private sector in developing countries.

Seadrill secures new jack-up contracts in Trinidad and Vietnam

Seadrill has been awarded two new contracts by BHP Billiton Petroleum for Offshore Vigilant in Trinidad and Offshore Resolute in Vietnam.

The three well drilling assignment for Offshore Vigilant is expected to take 150 days, and the contract value is approximately US$20 million. The two well assignment for Offshore Resolute is expected to take 90 days, and the contract value is approximately $11 million.

Commencement of operations under the new contract for Offshore Vigilant is scheduled for the third quarter 2011, in direct continuation of existing contract and mid May 2011 for Offshore Resolute. The contract for Offshore Vigilant includes options for an additional four wells with anticipated duration of 200 days.

Alf C Thorkildsen, Chief Executive Officer in Seadrill Management AS, says, “This is Seadrill’s first assignment for BHP. We consider this as an excellent opportunity to develop a strong relationship with BHP, one of the world’s largest natural resource companies. Representing a total contract value of S$31 million, the two assignments improve the earnings visibility for our jack- ups in 2011 at market rates.”

More firms to export aquatic products to EU

The European Union (EU) has permitted 53 more Vietnamese businesses to export aquatic products to the EU market, said the Vietnam Association of Seacooking Exporters and Producers (VASEP).

VASEP said these enterprises have already overcome a wide range of strict quality check programs conducted by the EU inspection team.

Previously, 330 domestic companies were allowed to sell the products to the EU market, one of the world’s largest seafood consumers, which imported more than $1 billion worth of aquatic products last year.

ADB lends $239m for Hanoi’s urban railway route

The board of directors of Asian Development Bank (ADB) has approved the US$239 million lending for the construction of urban railway route in Hanoi.

The $1 billion project, which will set up a 12.5-kilometer urban railway route from Hanoi Railway Station to Nhon in Tu Liem District, is expected to be finished by 2015. Its capacity will be raised from 150,000 passengers in 2015 to 500,000 passengers by 2030.

The ADB-backed project is expected to ease traffic congestion in Hanoi where 9 out of 10 people use private vehicles as their primary means of transport, with the remainder relying primarily on buses.

As Vietnam’s economy continues to grow, many of Hanoi’s residents are switching from motorbikes to cars. This trend, coupled with the fact that the capital’s population is expected to balloon from six to eight million people by 2025, threatens development and the environment, according to ADB.

“If Hanoi doesn’t develop quality, high-volume public transportation systems the city will slowly grind to a standstill over the next decade,” said Robert Valkovic, ADB’s Principal Transport Specialist for Southeast Asia.

“The metro is essential to Hanoi’s future,” he added.

The French Government and European Investment Bank also agreed to fund for this project. This is one of the four urban railway routes to be built in the Hanoi Urban Traffic Plan.

Early this year, ADB has already approved another loan to support one urban route in Ho Chi Minh City, raising the total funding for urban railway in Vietnam to $833 million.

Vietnam’s Bao Viet 2010 gross profit flat

Bao Viet Holdings, Vietnam’s largest insurer, reported a gross profit of VND1.255 trillion ($60 million) for 2010, nearly unchanged from 2009, failing to meet its initial target.

Bao Viet projected 2011 gross profit to rise 15 percent to VND1.445 trillion on revenue of VND14.8 trillion, also up 15 percent from last year.

The Hanoi-based state-owned group said its 2010 revenue rose 21.8 percent to VND12.86 trillion.

The group, 18 percent owned by HSBC Insurance Asia Pacific, had initially projected an annual gross profit growth of 11.6 percent to VND1.395 trillion for 2010.

“Bao Viet continues to strengthen its traditional insurance business, maintain the leading role in life and non-life insurance markets as well as to expand to other key areas namely banking and investment,” Chief Executive Nguyen Thi Phuc Lam said in a statement.

The group provides life and non-life insurance, runs a stock brokerage, a fund management firm, a commercial bank and an investment unit dealing with real estate as well as a driving training firm.

Net profit from Bao Viet Bank soared 74 percent to VND282 billion, while premiums of both life and non-life insurance rose 11.5 percent to a combined VND8.24 trillion.

Shares in Bao Viet closed up 3.45 percent at VND75,000 on Wednesday.

Vietnam welcomes largest container vessel

The 131,263 DWT container vessel named COLUMBA on March 30 docked at the Cai Mep International Terminal (CMIT) in the Cai Mep-Thi Vai river in the southern province of Ba Ria Vung Tau.

This was the first time in Vietnam’s maritime, a 363-metre vessel with a total capacity of 11.388 TEU has anchored there.

The first phase of the construction work on CMIT has been completed as a joint venture between Maersk A/S Joint Venture from Denmark, the Vietnam National Shipping Lines (Vinalines) and Sai Gon port.

US firm wins Oil & Gas Tower design contest

First prize in a US$50,000 contest to design the Vietnam Oil and Gas Tower has been won by US firm Pelli Clarke Pelli Architects.

PetroVietnam Construction Joint Stock Company (PVX) announced the chosen design of the tower, an international symbol of the Vietnamese oil and gas industry, on March 30.

The 79-storey tower, set to be Hanoi’s highest building, symbolises the 79-year lifespan of President Ho Chi Minh.

The Oil and Gas Tower will be built on a 6.5 ha area in Me Tri commune, in Hanoi’s Tu Liem district in 2012 and completed in 2015, using modern, environmentally friendly technology and will be capable of withstanding earthquakes of up to magnitude 7.0 on the Richter scale.

Pelli Clarke Pelli was also the designer of the Twin Petronas Tower in Malaysia.

Seafood demand from Japan on the rise

Many Japanese importers are urging Vietnamese businesses to shorten the time for delivery because there is a high demand for seafood in their country, said the Vietnam Association of Seafood Exporters and Processors (VASEF)

The recent earthquake and tsunami have badly affected the seafood breeding, catching and preserving industry in Japan.

However, Vietnamese producers facing the rising costs of input materials.

Industrial output rises 14.1 percent

The nation’s industrial production reached VND198.7 trillion in the first quarter of this year, a rise of 14.1 percent against the same period last year, the General Statistics Office (GSO) announced this week.

Officials said the growth in industrial production showed that the economy has recovered from the effects of the world economic crisis in 2009-2010.

Meanwhile, consumption of industrial products increased by 18.5 percent in the first quarter.

Industrial productivity of foreign-invested businesses meanwhile reached VND85.1 billion in the first three months of this year, a rise of 16.3 percent over last year’s same period.

The processing Industry saw the greatest growth of 15.1 percent over the same period last year, averaging 9 percent a month.

The greatest growth was seen in water heaters, liquefied petroleum gas, milk powder, buses, sugar, garments and seafood.

However, the production of electricity, crude oil, coal, glass steel, cooking oil, air conditioners, televisions and ceramic tiles fell.

Private sector posts impressive growth

The private sector has made up 78 percent of 500 enterprises rated as fastest growing (FAST-500), in a list announced by the Vietnam Joint Stock Rating Report Company (VNR) on March 30.

Phung Hoang Co, Vice President of the VNR Managerial Board, said those in the FAST-500 recorded an average growth rate of 54 percent from 2006-09. Businesses in the Top 50 and Top 100 gained marvelous growth rates of 160 and 112 percent, respectively.

The rating was conducted on database provided by 200,000 growing enterprises, 500 enterprises with the largest investment in the 2007-10 period and 1,000 others with the highest corporate income tax payments.

The processing, manufacturing and production sectors contributed the largest component to the list (41.8 percent), followed by construction (16.6 percent).

Nguyen Kim Commercial Company takes leading with its growth rate of 675.3 percent.

The rating was also based on the enterprise’s property, profit making and the number of employees, with an independent evaluation in line with international standards to ensure the highest possible objective judgment.

Int’l economic integration requires logistics

Domestic and international organisations, investors and businesses operating in logistics and seaport services at a forum in the southern province of Ba Ria-Vung Tau on March 30 to discuss measures to develop the sector in Vietnam in the context of international economic integration.

The event, was co-organized by the provincial People’s Committee and the National Commission for International Economic Cooperation, was part of activities within the framework of the international economic integration programme during the 2011-2015 period to improve trade logistics and seaport services in Ba Ria-Vung Tau province and in Vietnam as a whole.

At the forum, foreign experts from Singapore, Germany and the UK presented lessons learned from several countries in the region and the world in developing logistics and seaport services and proposed measures to help Vietnam develop such services.

Vietnamese economists and logisticians also shared their viewpoints on Vietnam’s logistics development strategy in accordance with commitments the country has made to the World Trade Organisation as well as trade agreements with other partners.

Int’l economic integration requires logistics

Domestic and international organisations, investors and businesses operating in logistics and seaport services at a forum in the southern province of Ba Ria-Vung Tau on March 30 to discuss measures to develop the sector in Vietnam in the context of international economic integration.

The event, was co-organized by the provincial People’s Committee and the National Commission for International Economic Cooperation, was part of activities within the framework of the international economic integration programme during the 2011-2015 period to improve trade logistics and seaport services in Ba Ria-Vung Tau province and in Vietnam as a whole.

At the forum, foreign experts from Singapore, Germany and the UK presented lessons learned from several countries in the region and the world in developing logistics and seaport services and proposed measures to help Vietnam develop such services.

Vietnamese economists and logisticians also shared their viewpoints on Vietnam’s logistics development strategy in accordance with commitments the country has made to the World Trade Organisation as well as trade agreements with other partners.

EVN inks $65m equipment contract

Electricity of Vietnam yesterday signed a contract with contractors Tianjin Alstom Hydro and Hydrochina Zhongnan Engineering Corporation for providing electrical equipments and technical services to the Huoi Quang power plant.

According to the three year $65.2 million contract, the joint contractors will provide equipments to install two turbines in the power plant as well as training courses to Electricity of Vietnam (EVN) staff who will run the plant in three years.

Tianjin Alstom Hydro and Hydrochina Zhongnan Engineering Corporation need more six months to complete the installation of two turbines.

“This is a significant event to Huoi Quang hydroelectricity plant and is the first step of the project implementation,” said EVN.

Huoi Quang hydroelectric power plant is located in Son La’s Muong La district. It has a design capacity of 520 megawatts including two turbines and expects to generate roughly 1.904 billion kilowatt hour annually.

EVN plans to put the first turbine into operation at the end of 2014 and the second turbine at the end of April 2015.

Shinhan to buy up stakes in Vietcombank joint venture

Shinhan Financial Group, the biggest financial firm in the Republic of Korea (RoK), has decided to buy up the stakes of the Bank for Foreign Trade of Vietnam (Vietcombank) in the joint venture Shinhan Vina Bank.

Founded in 1993, Shinhan Vina Bank was originally named First Vina Bank, of which Vietcombank held a 50 percent stake, the Korea First Bank possessed 40 per cent, and the Daewoo Securities Company, 10 per cent.

In 2001, the Shinhan Financial Group bought up the stakes of the two RoK partners and renamed the bank Shinhan Vina Bank, which boasted total assets of nearly 553 billion KRW (about $500 million).

At the same time, the group established a 100 per cent foreign-invested bank in Vietnam with total assets of almost 500 billion KRW.

The Shinhan Financial Group is planning to merge the two subsidiary banks after the business deal with Vietcombank.

Foreign firms’ appetite for rice exports

Foreign firms are gaining rice export advantages over local opponents.

Under Vietnam’s World Trade Organization (WTO) commitments, from 2011 wholly foreign-owned firms will be eligible to handle rice processing and exports in the Vietnamese market.

Industry experts said the move would inspire market expansion and enhance the value of Vietnamese rice. However, some raised concerns that a large portion of Vietnamese commercial rice would be in foreign traders’ hands and the profit margins created by Vietnamese rice would pour into foreign pockets.

Song Hau Food Company director Le Minh Truong said there would be a tough competition between domestic and foreign rice exporters in 2011 and foreign firms held the advantage.

“Foreign players prevail over local peers in export markets, global distribution network and familiarity with world trading practices,” Truong said.

Besides, they could source US dollar loans at reasonable lending rates of 4-5 per cent per year, while local firms have to source loans at high lending rates of 17-20 per cent, Truong said.

VFA’s deputy chairman Pham Van Bay said to survive local rice exporters would have no other alternative than restructuring to enhance competitiveness through innovating technology, shaking hands with farmers to establish stable material areas or expanding output markets.

Bay said that foreign players could not immediately jump into Vietnam and local firms needed to race against time to grow stronger before stepping into competition with foreign players.

The VFA revised rice export guiding prices by six times from January 7 to March 21, 2011. Accordingly, the floor export price of five per cent broken rice effective from March 24 was offered at $490/tonne and 25 per cent broken rice $470/tonne, down $30 and $28 per tonne, respectively, compared to those on January 7, 2011.