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BUSINESS IN BRIEF 15/12   2009-12-15 - VietNamNet/Xinhuanet

ADB funds State-owned giant restructuring

The Asian Development Bank (ADB) has approved a 630 million USD multitranche financing facility for Vietnam for further reforms of major State-owned enterprises (SOEs)

The financial assistance aims to make SOEs more efficient, profitable and transparent in a bid to spur economic growth and open up opportunities for the private sector, said the ADB in a press release available to Vietnam News Agency on Dec. 14.

The assistance titled Vietnam SOE Reform and Corporate Governance Facilitation Programme demonstrates ADB’s support to the Government’s reform agenda through financial and technical assistance.

ADB’s new programme will also provide training and other assistance to Governmental institutions engaged in the SOE reform process, such as the Debt and Asset Trading Corporation.

Under this financial umbrella, ADB will provide 6 million USD from its ordinary capital resources (OCR) to strengthen the balance sheets of selected corporations through debt restructuring. As much as 30 million USD from its Asian Development Fund (ADF) is used to support operational and corporate governance improvement and institutional strengthening.

ADB’s funds make up almost 36 percent of the estimated 1.77 billion USD cost of SOE reforms until 2015. The remainder is expected to come from the Government’s contributions and internal resources of participating corporations and strategic investors.

In the first stage, ADB will provide13 million USD to support the transformation of the Song Da group.

The Ministry of Finance has been assigned to execute the programme that runs from December 2009 to December 2015.

Vietnam to facilitate Russian investment

The Vietnamese Government will facilitate Russian investors’ operations so that they can obtain successes in Vietnam, stated Prime Minister Nguyen Tan Dung.

The Prime Minister made the statement while meeting with Russian leading entrepreneurs in Moscow on Dec. 14 during his current working visit to Russia .

The Vietnamese Government leader highlighted the active deployment of cooperation agreements between Russian groups with Vietnam in oil and gas, mining, electricity and banking, citing the establishment of the Vietnam-Russia investment fund worth 500 million USD to invest in Vietnam and the strategic partnership agreement between the Vietnam National Oil and Gas Group (PetroVietnam) and the Russian gas group Gazprom.

He said the potential for cooperation between the two countries is still great in all field, especially in economy, trade and investment, thus promising practical benefits for both sides.

PM Dung stressed that Vietnam always attached importance to developing traditional friendship and strategic partnership with Russian for long-term benefits of the two people and for peace, stability, cooperation and development in the region and the world.

The same day, PM Dung attended a ceremony to open a subsidiary bank of the Vietnam-Russia Joint Venture Bank (VRB) in Moscow.

Industrial park investment falls in southern zone

Investment in industrial parks and export processing zones in the Southern Key Economic Zone are showing signs of decline, officials said.

Tran Van Lieu, head of the Binh Duong industrial parks management, said this year there has been a 50 percent drop in investment in the southern province’s 28 industrial parks to 500 million USD.

The HCM City Department of Planning and Investment reported a similar situation in the city-based industrial parks and export processing zones, which attracted a mere 16.9 million USD.

Tay Bac Industrial Park in the suburban district of Cu Chi has received no investment.

In Dong Nai province, whose IPs are normally popular investment destinations, the second phase of the Nhon Trach 3 IP, which is under construction, has failed to attract any tenants this year.

Nguyen Thanh Binh, its director, blamed the slowdown on the scrapping of some land – and tax-related incentives for investors developing infrastructure in IPs.

Nguyen Van Thu, deputy director general of Tam Phuoc IP in Dong Nai, said the park, home to 80 percent of local timber processing firms, saw two of them shutting down and some others operate at half capacity due to lack of export orders from major markets like France and the US.

To help companies in distress, IP authorities are allowing them to defer tax and land lease payments and offering soft loans.

Lieu said IPs are attracting less investment because multinationals and other large companies are busy restructuring their businesses and going easy on fresh investments.

Pepper export value grows 11.5 percent

Pepper exports fetched 328 million USD in the first 11 months of the year, an increase of 11.5 percent over the same period last year, according to the Ministry of Agriculture and Rural Development.

Export volume increased by an even more substantial 52 percent during the period to 128,000 tonnes.

Both figures easily surpassed targets set earlier for the year of at least 100 million USD in export value and 100,000 tonnes in volume. These targets were now seen as highly conservative, as they were set during the worst days of the global economic downturn in late 2008.

Last month alone, the nation’s pepper exports totalled 10,000 tonnes, worth 32 million USD.

Pepper prices were also on the rise, noted Nguyen Viet Chien, director of the Statistics and Information Technology Centre of the Ministry of Agriculture and Rural Development.

Vietnam ’s pepper output this year will reach an estimated 130,000 tonnes, 5 percent greater than last year’s total. Global pepper production will reach only 310,600 tonnes, 8,000 tonnes less than in 2008, according to the International Pepper Commission, which attributed the decline to bad weather and disease.

Vietnam ’s leading export markets include the US , Germany , the Netherland, Egypt , India , and Russia . In the first 10 months of this year, the US imported 12,600 tonnes of pepper from Vietnam , worth 36.32 million USD, while Germany imported 12,080 tonnes, worth 33 million USD.

Government wants engineering sector to go internationally

A Government leader has asked the mechanical engineering sector to restructure itself in a strong manner to enable it to partake in the international mechanical engineering chain.

Deputy Prime Minister Hoang Trung Hai described the task as an important one while addressing a symposium discussing the mechanical engineering sector’s capacity of fabricating supporting devices for the energy industry in Hanoi on December 14.

The symposium was co-organised by the Ministry of Industry and Trade and the Alstom group of Switzerland.

The Deputy PM, who is also Chief of the Steering Board for Key Mechanical Engineering Programme, pointed out that a very poor collaboration among mechanical engineering enterprises is a reason behind the underdevelopment of the present sector.

He also underlined the fact that Vietnamese mechanical engineering businesses fall short in researching, manufacturing and designing their own products.

Accordingly, the sector is now capable of meeting only 38 percent of local demands for mechanical equipment and leaves the remaining 62 percent for foreign producers.

The Government leader believed that the symposium is the first step to help bring together the Ministry of Industry and Trade, engineering firms and their associates to re-examine their infrastructure in order to provide optimal service for the Alstom group.

The Deputy PM affirmed that he is willing to speak directly with businesses and their associations to deal with difficulties that may arise to promote the development and international integration of the nation’s mechanical engineering industry.

At the symposium, Alstom Group’s Asian Director Laurent Fortier-Beaulieu said his group is eager to cooperate with Vietnamese mechanical engineering businesses in producing equipment and providing labourers and maintenance services at competitive prices for hydro-electric, wind-generated, and thermo-electric power plants with a capacity of up to 600 MW, a relationship already established in countries including Indonesia, Australia and Malaysia.

Regarding Vietnam as its top priority in the region, Alstom stated his commitment to providing technologies and management experiences for Vietnamese partners that are qualified for establishing a long-term partnership with the group.

Swedish-funded programme helps develop energy sector

The Vietnam-Sweden Rural Energy programme (VSRE) has helped raise Vietnam’s capacity in planning, developing and managing renewable energy sources.

The statement was made by the Ministry of Industry and Trade’s Energy Department Deputy Director Pham Hung in a seminar held in Hanoi on December 14 to sum up what the programme achieved over the period 2003-2009.

In addition, the programme helped improve socio-economic and cultural life of ethnic minority people in the northern mountainous province of Ha Giang and central coastal province of Quang Nam, Hung said.

VSRE was funded by the Swedish government via the Sweden International Development Agency (SIDA) with an amount of over 50 million SEK (over 7 million USD).

Ludovic Lacrosse, VSRE chief advisor, confirmed that the programme built up a framework of technical standards which are essential for designing and managing renewable energy projects in Vietnam.

Based on VSRE studies, the Asian Development Bank (ADB) provided Vietnam with a soft loan of more than 151 million USD to help the country carry out renewable energy projects for rural areas.

According to the Ministry, Sweden has granted up to 600 million SEK and provided preferential loans worth 500 million SEK for Vietnam ’s electricity industry since the two countries set up diplomatic ties 40 years ago.

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BUSINESS IN BRIEF 14/12   2009-12-14

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