VN Business News 29/07/97

[Dam Son <son@u.washington.edu>]

Vietnam Rice Crop Seen Unaffected By Rising Mekong Waters 
C&W, France Telecom, NTT sign Vietnam contracts worth 860 mln usd 
Vietnam Maritime Bank Talking To Possible Foreign Buyers 
Vietnam In Deal With Cable & Wireless PLC, France Telecom 
Vietnam Brady Bond Talks Down To Final Details 
Vietnam, Japan sign us$750 mln tourist complex agreement 
Major construction projects slated for central Vietnam 
First Israeli company licensed to operate in Hanoi 
Vietnam'S Hai phong issues 10 foreign investment licenses 
Vietnam to develop nationwide vocational training network 
Vietnam Vietcombank Paying Off Letters Of Credit - Report 
Asian Cash Rice Steady; Fears Of Flooding In Vietnam 
Foreign joint ventures lead industrial and export growth in Vietnam 
U.K. Standard Chartered Hoping For HCMC Full License 
Cushman & Wakefield invades Vietnam 
Myanmar Leader Meets with Vietnamese Trade Minister 
Authorities Call for Freezing Hotel Construction in Hanoi 
Foreign Banks Capturing Vietnam's Credit Market 

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Vietnam Rice Crop Seen Unaffected By Rising Mekong Waters 

SINGAPORE (Dow Jones)--Rising water levels in Vietnam's Mekong River
Delta, which have raised concerns about early floods just as the
summer-autumn rice harvest gets underway, are likely to leave the rice
crop unscathed, according to meteorologists.

While flooding in the region is an annual occurrence, there are no
serious weather threats to the rice harvest at present, they say. The
Mekong River Delta is the largest rice-producing area in Vietnam. Its
surplus rice is exported.

The water in the Mekong River Delta will likely continue to rise over
the next 10 days, said a senior official at the Southern Hydro
Meteorological Center in Ho Chi Minh City. But it remains to be seen
if the water levels will climb beyond that, the official said.

'Conditions look good for harvesting,' said Ariane Mamberj, a
meteorologist specializing in commodities at Weather Services Corp. in
the U.S. 'It will be dry in the south (of Vietnam) in the next few
days as most of the rains will remain in the north and central
regions.'

Mamberj added that over the next 6 to 10 days, conditions there will
be partly cloudy with temperatures close to normal. 'The outlook is
for isolated to wildly scattered showers,' she said.

Last week, reports said heavy rains in the north of the country could
mean annual floods will come to the Red River in the North and the
Mekong River several weeks earlier than usual.

'It's raining almost every day,' said a trade source with a major rice
exporter in Ho Chi Minh City. Should there be serious floods, the
quantity and quality of the unharvested crop may be affected, he said.

A trade source with a provincial rice exporter in Ho Chi Minh City
said he's unsure if export rice prices will retreat, even with the
arrival of significant amounts of newly harvested rice to market.

'We're afraid of floods. The water level is going up every day,' he
said. 'Maybe there will be some damage to the crop.'

Another trader based in Ho Chi Minh City appeared unconcerned: 'The
floods may come in about two weeks' time but it's normal every year.'

-By Joyce Teo +65-421-4825

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C&W, France Telecom, NTT sign Vietnam contracts worth 860 mln usd 

Hanoi (AFX) - Cable and Wireless PLC, Nippon Telegraph and Telephone
Corp and France Telecom signed separate installation contracts worth
860 mln usd with Vietnamese authorities, a Posts and
Telecommunications spokesman said.

France Telecom signed a 15-year, 460 mln usd deal to install more than
500,000 fixed telephone lines in Ho Chi Minh City, he said.

NTT signed a 15-year contract worth nearly 200 mln usd for the
installation of about 220,000 fixed lines in Hanoi.

C&W also entered into a 15-year, 200 mln usd agreement to install
250,000 land lines in Hanoi.

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Vietnam Maritime Bank Talking To Possible Foreign Buyers 

Hanoi (AP-Dow Jones)--The Vietnam Maritime Bank said Tuesday it is in
talks with several potential foreign buyers after receiving permission
a week ago from Vietnam State Bank for a partial sell-off of its
shares.

An official confirmed to Dow Jones that it is now allowed to sell up
to 30% of its shares valued at some 80 billion dong (US$1=11,127 dong)
so as to raise its total registered capital to 250 billion dong.

If the partial sell-off goes through, Vietnam Maritime Bank would
become the largest joint stock bank in the North of Vietnam, the
Saigon Times Daily reported.

According to the paper, the bank's foreign partners in Thailand,
Taiwan and the U.K. wish to buy the shares.

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Vietnam In Deal With Cable & Wireless PLC, France Telecom 

Hanoi (Dow Jones)-- Vietnam Post & Telecommunications Corp. reached
agreements with the Cable & Wireless PLC (CWP) and France Telecom.

Cable & Wireless Monday signed a 15-year $900 million business
cooperation contract for the installation and operation of a telephone
network in Hanoi, a VNPT official confirmed Tuesday.

He also confirmed a news report that France Telecom has signed a
similar contract to invest $500 million to develop 540,000 lines in Ho
Chi Minh City.

The newspaper also said VNPT is about to sign a deal with Telstra
Corp. (A.TLS) for the installation of lines in Hanoi, but spokesman
Philip Jones said only that the company is still in negotiations.

Takesi Nomitsu, general manager of Japan's NTT International Corp.,
told Dow Jones Newswires that on July 22 NTT had signed an agreement
to install 240,000 phone lines in Hanoi at a cost of about $200
million.

The bids for the contracts to add phone lines in Hanoi and Ho Chi Minh
City were made by the foreign companies some time ago. The plan to
beef up the two cities' phone system is part of the Vietnamese
government's aim of rapidly expanding penetration in Vietnam.

The government would like to have 5%-6% phone penetration by 2000, up
from the current rate of 1.29%.

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Vietnam Brady Bond Talks Down To Final Details 

Hanoi (AP-Dow Jones)--Talks on the issue of Vietnam's first Brady
Bonds are in their final stages but the parties involved are divided
over when the first bonds will actually be issued.

Sources in the State Bank of Vietnam said they hope to issue the bonds
in August while a source outside the country said he expects the
agreement to be finalized in September.

'We are reaching the last step,' a source in the State Bank of Vietnam
said.

The issue will be in keeping with the term sheet for the restructuring
of Vietnam's London club comercial debt finalized in January. The
details are being ironed out by an advisory committee representing
Vietnam's commercial bank creditors, co-chaired by Bank of
Tokyo-Mitsubishi and Australia & New Zealand Banking Group Ltd.

ANZ Bank of Tokyo-Mitsubishi and Vietnam's central bank are conferring
by fax and telephone on the final points of the agreement, and will be
talking again next week, sources close to the talks say.

Still to be signed is the exchange agreement on redenomination of
non-dollar debt into dollars, the formal signing of the fiscal agent
agreement, which includes the hiring of Citibank for the job, and the
collateral pledge agreement under which the Federal Reserve of New
York will be the collateral agent. The collateral used will be
30-year, zero-coupon U.S. Treasurys.

'There are not a lot of problems ahead but a lot of documentation to
get through. The whole process takes a lot of time,' the source
outside of Vietnam said. 'We are aiming for the early part of
September, realistically.'

The bond issue would go toward paying off part of the principle and
arrears on Vietnam's $900 million commercial debt.

Th debt was built up before 1985 when the country borrowed from
abroad, through the state-owned Vietcombank, to buy capital goods such
as equipment and machinery.

Under the January deal, Vietnam achieved about 50% forgiveness on the
debt.

The parties had hoped to issue the bonds in the first half of this
year but preparations took somewhat longer than expected.

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Vietnam, Japan sign us$750 mln tourist complex agreement 

Hanoi, July 28 (VNA) - Lang Co township in central Thua Thien-Hue
province will be the site for a new US$750 million tourist complex,
following an agreement signed in Hue.

The complex will be completed over the next decade and host up to one
million tourists a year.

The agreement in principle to establish the Lang Co Tourist Complex
Development Joint-Venture was signed between the Director of the Giang
Huong Tourist Company (Thua Thien-Hue Province), Nguyen Huu Dong, and
the Director General of the Fujiken Group (Japan), Yoshio Sakamoto.

The 50 year joint venture will develop a 700-ha area in Lang Co
Village in Loc Hai commune of Thua Thien-Hue provinces Phu Loc
district.

The site is located on a fine beach at the foot of the northern
section of Hai Van Pass, between Hue and Da Nang.

The scale and investment in the project has exceeded initial plans,
Viet Nam News daily quoted Dong as saying.

He added that the two sides, who have spent hundreds of thousands of
dollars on field investigations, have signed an agreement after more
than one year of negotiations.

If things go on schedule smoothly, Lang Co Tourist Complex will become
the largest tourist site in Vietnam, Sakamoto from Fujiken group said
at the signing ceremony.

Construction will be carried out over three stages, with the first
expected to start in early 1998.

Director of the Thua Thien-Hue Tourism Service, Vo Phi Hung, said the
project has the support of the authorities, and submitted its plans to
Prime Minister Vo Van Kiet for approval, which is expected in the
coming few months.

The province has focussed on developing tourism, Hung said, adding
that tourism is the second most important economic sector in Thua
Thien-Hue.

(VNA)

28-07 1547

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Major construction projects slated for central Vietnam 

Hanoi, July 28 (VNA) - Several major construction projects will be
developed in Da Nang, building up the central region's primary city.

The biggest project, worth VND 988.5 billion (US$90 million), will
develop a new urban area on 163.3 ha along the Han River.

Three new residential quarters with more than 3,000 apartments, a
cultural and political centre, and other cultural and entertainment
facilities will be included in the estate.

A 4.6 km road linking the Nguyen Van Troi bridge to the Nai Hien ward,
and some high-grade hotels and trade centres, will also be built in
the new urban area.

Other projects include the Thac Gian-Vinh Trung residential quarters
(under construction since last year) and the expansion of Highway 14.

To promote the nearby Ba Na tourism area, the municipal Peoples
Committee has decided to build a new road to the top of Ba Na mountain
and are drafting a feasibility study for the road.

The city also plans to spend up to VND 50 billion (US$4.5 million) to
build a bridge downstream of the Han River.

A foreign-invested project will build a new tourism complex, including
three hotels with 1,000 rooms and an 18-hole golf course, at Bac My An
fishing village near Da Nang.

(VNA)

28-07 1615

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First Israeli company licensed to operate in Hanoi 

Hanoi, July 28 (VNA) - An investment licence has been granted to
Israel's Alum Dan Asia Co., Ltd. for operation in Hanois Sai Dong B
Industrial and Export Processing Zone.

Alum Dan Asia Co. Ltd, the first Israeli company operating in Vietnam,
plans to invest US$1.2 million in a 20-year project to produce and
install aluminium partitions, ceiling boards and frames. Design
capacity is estimated at 10,000 sq. M a year, with 80 percent being
exported.

This project is the seventh licensed to operate in Sai Dong B Zone,
one of Hanoi's five Industrial and Export Processing Zones, covering a
total area of 785 ha and having a combined capital of around US$270
million for infrastructure construction.

Infrastructure construction has been completed on an area of 50 ha in
Noi Bai-Soc Song Zone. Meanwhile, preparations relating to level
ground clearance, land transfer and planning are accelerated at the
Sai Dong A, Dai Tu, and North Thang Long, all covering 588 ha.

The Managing Board of Hanoi's Industrial and Export Processing Zones
plans to have all the land to be leased in the Dai Tu Zone, half of
the area in the Northern Thang Long Zone and two thirds in the Noi
Bai-Soc Son Zone by the year 2000.

(VNA)

28-07 1619

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Vietnam'S Hai phong issues 10 foreign investment licenses 

Hanoi, July 28 (VNA) - The port city of Hai Phong licensed ten more
foreign-invested projects with a combined capital of US$189 million in
the first six months of this year.

The biggest of the newly-licensed projects is the US$80 million
construction of the Dinh Vu industrial zone.

Hai Phong has attracted 66 projects with a total registered capital of
over US$1.2 billion since the promulgation of the Foreign Investment
Law in late 1987.

The city is ranked fifth in the country in terms of investment capital
and the number of projects and first in terms of disbursed capital
reaching 55 percent of registered capital, compared to the country's
average of 36 percent.

(VNA)

28-07 1622

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Vietnam to develop nationwide vocational training network 

Hanoi, July 28 (VNA) - As many as 1.3 million workers will be provided
with vocational training each year until the turn of the century,
doubling the current figure and accounting for around 25 percent of
those annually joining the workforce, the Ministry of Education and
Training said.

The sector is striving to set up personnel training centres in all
districts and precincts throughout the country.

Last year, only 500,000 people attended job training schools and
centres throughout the country.

Since its establishment, the education and training sector has
achieved considerable gains in supplying skilled workers to society,
using a network of 244 intermediate vocational schools, 174 vocational
schools and 400 job training centres.

However, a labour survey in 1995 indicated that trained workers made
up only 10 percent of the total labour force in Vietnam, far from
requirements of the country's national industrialisation and
modernisation drive. It further showed that 21 out of 61 provinces and
cities do not yet have a locally-run job training school, while nine
others do not have any kind of vocational training school.

Foreseeing high demand for skilled workers in the country's
newly-established industrial and export-processing zones, the sector
plans to set up between 10 and 15 job training schools in key economic
zones, provide universal vocational training to all labourers and
insert general technical education into curricula of secondary
schools. More attention will also be paid to vocational training in
fee-paying independent schools and at traditional handicraft villages.

(VNA)

28-07 1628

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Vietnam Vietcombank Paying Off Letters Of Credit - Report 

Hanoi (AP-Dow Jones)-- Vietnam's Bank for Foreign Trade of Vietnam
(Vietcombank) has established deferred payment plans for all its
overdue letters of credit, the Vietnam News reported Monday.

The paper quoted a bank official saying that creditors have the option
of giving one-year payment extensions with interest rates fixed
according to the Singapore Inter-Bank Offer rate plus 1%, which
amounts to 7.5%.

Another bank source told Dow Jones that creditors who are unhappy with
these terms can ask to be repaid immediately. He did not say how many
letters of credit are overdue.

Letters of credit are a major source of controversy in Vietnam as
several banks here have issued them to financially unsound companies
that later defaulted on their obligations.

In an interview with the Vietnam News, Vo Phung Thao, acting director
of the Ho Chi Minh City branch of Vietcombank, said that so far this
year the bank has raised a total of 24,500 billion dong in deposits,
up 20% over the first half of 1996.

He said the bank's total payments for imports were up to $1.4 billion,
and payments for exports rose to $1 billion in the first half of 1997.

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Asian Cash Rice Steady; Fears Of Flooding In Vietnam 

SINGAPORE (Dow Jones)--Rice offers in the Asian physical export
markets are holding steady late Monday, even as domestic Thai prices
for fragrant rice, parboiled rice and broken rice continue to climb,
traders said.

A significant reduction in Thailand's corn production has led to
higher local consumption of broken rice, said a trader in Bangkok.

Local fragrant rice prices are higher because some in the trade are
hoarding the rice to sell later. 'The rains came late so the harvest
may start late, maybe in December,' he said. 'So some people keep the
rice on hand for local demand.'

Offers of Thai 100%B rice are largely steady around $330-$335/ton
while the 100% broken rice is offered unchanged around $210/ton,
according to the Bangkok trader.

In Vietnam, offers are also steady, at $220-$225/ton for the 25%
broken rice and around $255/ton for the 5% broken rice.

Harvest of Vietnam's summer-autumn crop has started, but some in the
trade are now concerned heavy rains may give rise to flooding in the
Mekong river delta.

As reported, the state trading corp. of Pakistan will ship out 8,000
tons of IRRI-6 rice to Mauritius by the end of the month. [60758]

-By Joyce Teo +65-421-4825

  _________________________________________________________________


Foreign joint ventures lead industrial and export growth in Vietnam 

Hanoi (dpa) - Vietnam has posted solid industrial growth and export
sales in the first half of the year led by joint venture firms while
some domestic firms have languished, according to an official report
Monday.

Figures compiled from the General Department of Statistics have put
industrial growth at 13.8 per cent over the first seven months of the
year.

Total export value for the same period is recorded at 4.8 billion
dollars, an increase of 25.2 per cent over last year's figures,
according to the official Vietnam News.

Foreign joint ventures posted an industrial growth rate of 23.2 per
cent and an export growth rate of 14 per cent during this period.

Industrial growth was a solid 16 per cent in southern Ho Chi Minh
City, the country's main commercial centre but there was a downturn of
8.9 per cent in Hanoi.

The downturn was attributed to the poor performance of state-owned
electronics firms which now face fierce competition from
foreign-invested operations.

The report said five firms owned by Hanoi authorities were operating
at one-fourth their capacity while those owned by central government
ministries were only operating at half of their capacity.

Overall, Vietnam registered a trade deficit of 1.77 billion dollars
during the first seven months but the statistics department said 45.7
percent of this amount was capital goods needed by foreign firms.

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U.K. Standard Chartered Hoping For HCMC Full License 

Hanoi, July 28 (Dow Jones) -- U.K. bank Standard Chartered PLC (U.STA)
is hoping for a full banking license for its representative office in
Ho Chi Minh City but hasn't yet been invited to apply for one, the
group's executive director said Monday.

Speaking at the a press conference in Hanoi, David Moir said Standard
Chartered has been in Vietnam long enough to meet the government's
three-year requirement but hasn't yet been given the green light to
file an application to the banking authorities.

'These things take time,' Moir said. 'When they invite us, we'd be
happy to apply.'

In Hanoi, Standard Chartered has a full banking license and its
activities swung to a profit in the bank's second year of operations
in Vietnam.

A number of foreign banks would like to open full offices in Ho Chi
Minh City but the Vietnamese government restricts the number of
licenses it issues.

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Cushman & Wakefield invades Vietnam 

San Francisco Business Times
07/28/1997
By Kristen Bole

Real estate giant Cushman & Wakefield is hoping to lure American
business back to former enemy territory: Vietnam.

The company has signed on as the North American marketing agent for an
8,000-acre project just south of Ho Chi Minh City that aims to create
a new city for 1 million residents and the financial hub of the future
for Southeast Asia.

The goal, said C&W senior director Mark Terzian Jr., is to help
Fortune 500 companies and U.S. developers get in on the ground floor
of a region that investors here have pretty much ignored, despite a
market of 74 million people and 9 percent economic growth.

In fact, while one of Asia's largest development projects, Saigon
South is almost unknown on this continent. That is true even in the
Bay Area, despite $42 million in trade with Vietnam and a host of
local design and environmental firms that have worked on the project.
Meanwhile, other Asian companies have already leased 2 million square
feet of industrial space, the first commercial space to be developed
at Saigon South. That is precisely what led the Taiwan developer
Central Trading & Development Group to hire Cushman & Wakefield.

"We have a challenge," Terzian said. "A lot of people aren't aware of
it and don't understand it."

This is the first time an Asian project such as this has been marketed
in the United States. That marketing, and the project's innovative
approach in a sea of bad developments, is one of several signs of
Vietnam's efforts to join the modern world, with an emphasis on
technology and investment perks, like full foreign ownership in Saigon
South.

Moving the city center from its old-style government base to a
high-rise hub is another symbol of that change, according to San
Francisco designer Kathrin Moore, an associate partner at Skidmore,
Owings & Merrill.

"The country has to provide contemporary living conditions for people
involved in developing Vietnam into a modern society," Moore said.
"Saigon South will be a prerequisite for that."

Moore's design team won two international awards for Saigon South,
which Terzian said aims to be more of a Singapore North than a
Shanghai South.

The 8,000-acre, 1 million-resident project includes central highrises,
upscale residential space and access to transportation. Nine years in
the making, the project broke ground in 1992, and has completed its
infrastructure, including roads, a 375 megawatt power plant and an
international school.

While threaded with canals, Saigon is fiercely bucking Bangkok's
trend, aiming to create a new model in Southeast Asia that will be
livable when it is finished in five years.

There are still plenty of obstacles to moving into Vietnam, including
some still-sticky legal issues in investments. But Terzian said this
project also has one big advantage: It's actually in progress.

"There are a lot of projects on the books out there," Terzian said.
"If they'll ever be built, who knows? This one is happening."

  _________________________________________________________________


Myanmar Leader Meets with Vietnamese Trade Minister 

YANGON (July 28) XINHUA - Chairman of the Myanmar State Law and Order
Restoration Council Senior General Than Shwe met today with visiting
Vietnamese Trade Minister Le Van Triet, state-run Radio Myanmar
reported tonight.

Le, who leads a Vietnamese trade delegation, arrived here last
Thursday at the invitation of his Myanmar counterpart Lieutenant
General Tun Kyi.

During the visit, the delegation has held talks with Myanmar officials
from seven ministries, the Chamber of Commerce and Industry and local
enterprises.

The two sides discussed the development of bilateral trade and export
of similar products between the two countries and agreed to strengthen
their cooperation in finding markets for the products.

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Authorities Call for Freezing Hotel Construction in Hanoi 

HANOI (July 28) XINHUA - Tourism authorities in Vietnam have
recommended freezing hotel construction projects in Hanoi until 2003,
the English-language newspaper Vietnam News reported today.

Hotel construction in this capital city has far outpaced the needs by
foreign tourists, and the growth of the tourism sector could continue
to be slow in coming years, the authorities said.

Now having 321 hotels with 6,520 rooms, Hanoi is likely to see 10 more
hotels opening in this year.

However, the existing hotels had an occupancy rate of 30-60 percent in
the last six months and the business turnover was down by 20 percent
in the first half of the year compared with the same period last year.

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Foreign Banks Capturing Vietnam's Credit Market 

HANOI (July 28) XINHUA - Foreign banks could capture Vietnam's entire
credit market as they expand their activities rapidly in the country,
said a newspaper report here today.

While foreign banks expanded rapidly in the first half of the year,
domestic banks recorded a proportional loss in their share of the
market, the English-language daily "Vietnam News" reported.

Vietnam's state bank branches have so far increased their capital by
11.8 percent and the country's stock banks by 0.6 percent, the State
Bank of Ho Chi Min city was quoted as saying.

Meanwhile, foreign banks' share on the Vietnamese market has risen by
29.6 percent.

State enterprises' loan share has reduced by 40 percent with stock
banks, but rose by 106 percent with foreign banks, because the
domestic banks are extremely cautious in granting loans.

The local banking sector is losing competitiveness as flaws in
implementing state regulations have led to risky arrangements that
bring up overdue credit to over 20 percent of outstanding debt.

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