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BUSINESS IN BRIEF 30/12   2009-12-30 - VietNamNet/VNA

Vietnam’s presence alters pepper market

India’s Financial Times carried an article on Dec. 28, saying that the dynamics of the pepper trade have changed significantly over the last few years as Vietnam entered the global market as a key producer.

The emergence of Vietnam as a leading producer has resulted in buyers shifting to short-term contracts and India transforming itself into a net importer of pepper. This has changed the global pepper trade irreversibly, said economic analyst Rajesh Ravi who wrote the article.

India used to export 40,000- 50,000 tonnes of pepper annually to top up its yearly production of 80,000-100,000 tonnes, according to the analyst.

However, production in India has dropped to 50,000 tonnes, while it remains the largest consumer of pepper in the world, with its annual domestic consumption estimated at 40,000-45,000 tonnes.

Meanwhile, Vietnam leads the global pepper trade, growing between 110,000-125,000 tonnes annually. It also leads in productivity, producing 1,200 kg to 1,300 kg per hectare.

Ravi noted that in the last two years, the Vietnamese Pepper Association (VPA) has held back a lot of its reserves so it can avoid flooding the market, which lowers prices.

The VPA has also invested in building more warehouses to sell in a systemised manner to take more advantage of the market.

The analyst forecasts that the number of contracts for 2010 may be lower than normal as the economic slow down and less available credit has made buyers opt for quicker contracts as they are living from hand to mouth.

Big retailers are not only keeping lower stocks, they are storing for shorter periods. This will lead to a volatile market in 2010 due to a mismatch of buying and selling needs, he wrote.

Danish fund ups in pharma to 30 percent

Vien Dong Pharmaceuticals Co (DVD) has completed the private placement of 3 million shares to its Danish strategic partner, BankInvest’s Private Equity New Markets (PENM) fund, at a price of 80,500 VND (4.40 USD) per share.

With this acquisition, the fund increases its holdings in the pharma to 3.6 million shares, equivalent to over a 30-percent stake and enabling it to elect a member to the company’s board of management.

PENM is a 900 million USD private equity fund established by Danish BankInvest Corp in 2006. PENM’s investment focus is on private, non-listed Vietnamese companies with a proven track record and a strong future development potential.
“BankInvest has confidence in Vietnam ’s economic development,” said fund director Hans Christian Jacobsen.

DVD charter capital currently stands at 119.1 billion VND (6.4 million USD), and it gained a capital surplus of 211 billion VND (11.4 million USD) through this issue.

The capital raised would be used to promote technology transfer, licensing, research and development, as well as to fund construction of the Lili of France joint venture factory and other business extension projects over the next two years, Dung said.

Vietrade helps Vietnamese businesses promote trade in US

The Vietnam Trade Centre in New York (Vietrade New York ) has actively supported Vietnamese enterprises’ efforts to establish their foothold in the US market.

The centre has worked as a bridge between the two countries and provided both Vietnamese and American businesses with valuable information on the market in Vietnam and the US .

With the centre’s help, Vietnamese enterprises have participated in several trade fairs in the US , including a metal fair and a wooden furniture fair in Las Vegas and a foodstuff fair in New York . In addition, the centre has helped Vietnamese entrepreneurs conduct market surveys in many US eastern cities.

In 2009, more than 200 US enterprises have made contacts with the centre. Many of them showed their intentions to seek capable suppliers of Vietnamese goods for the US retail network.

Long-awaiting deal helps ease power shortage

The Vietnam Oil and Gas Group (PetroVietnam) and the Electricity of Vietnam (EVN) Group have finally reached contracts in regards to products from the three gas-fuelled power plants in the south, ending prolonged negotiations.

Under the deals signed in Hanoi on late December 29, the EVN will pay the PVN some 630 million USD annually for over 11.5 billion kWh of electricity generated by the 450MW Nhon Trach 1 and the Ca Mau 1 and 2 with a combined capacity of 1,500 MW.

EVN President Dao Van Hung said for the 25 year term, the two contracts will cost the EVN up to 15.8 billion USD, which, however, will help bring the two giants closer to each other, thus contributing a boost in power generation and supply.

The deal regarding the Ca Mau plants 1 and 2 was initially reached by the two giants in January 2008. However, it took years to make some adjustments for a final agreement due to the lack of a contract regarding the PVN’s responsibility on operation and maintenance as well as disagreements on prices.

South-western economy to be further developed

Deputy Prime Minister Nguyen Sinh Hung has asked south-western provincial authorities and residents to bring the region’s economy equal to the country’s level.

Deputy PM Hung made the statement at a conference to review the Steering Committee for South-western region’s work in 2009 and implement tasks for 2010. The meeting was held in the Mekong delta province of Soc Trang on Dec. 29.

He took the occasion to hail the region’s economic growth that nearly doubled the country’s rate, good settlement of social welfare issues while ensuring defence and security and social order.

The south-west region is a key agricultural area of the country, said the deputy PM, suggesting that advanced technology and promotional campaigns for goods consumption, as well as processing and post-harvest preservation be included in the production development scheme. It needs the involvement of skilled workers, scientific institutes and qualified managers, he added.

Deputy Director of the committee Son Song Son told the conference that despite negative impacts of the global economic crisis, the region’s economic growth is estimated at 10.08 percent this year compared with the entire country’s growth of 5.2 percent.

The region’s annual per-capita income is estimated to be 973 USD this year, a year-on-year rise of 9.33 percent. Its rice output reaches 20.6 million tonnes and fisheries volume is expected to surpass 2.64 million tonnes, Son said.

The region also posts a year-on-year rise of 19.1 percent in industrial production value to more than 73.7 trillion VND but its export value drops 2.35 percent from last year to 5.53 billion VND.

The region’s development was spurred by the completion of a number of key projects. They include the Ca Mau thermo electric plants 1 & 2, the O Mon thermo electric plant 1, Rach Mieu bridge, the newly-upgraded Ho Chi Minh City-Trung Luong section of the National Highway 1A, the first stage of the Can Tho international airport, and school and hospital construction projects sourced from Government bonds.

There only remains 9.43 percent of poor households in the region, Son added.

The committee said it will continue promoting ethnic and religious policies focusing on assistance to housing and land for production to ethnic communities in 2010.

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