VN Buss. News (Apr. 12, 1997)

[Vu Thanh Ca <vuca@envi.env.civil.saitama-u.ac.jp>]

Music giant Polygram sets up first Vietnamese foreign music venture
Vietnam, U.S. Seen Making Progress On Copyright Pact
Vietnam Tribeco Soft Drink Co Seeks To Partially Privatize 
Vietnam-Trade: Trade ministry targets 2nd quarter deficit of 1.2 bln ...
Vietnam Seeks U.S. Backing On Brady Debt Deal - Treasury 
Vietnam assembly set to pass first value added tax law
Vietnam Foreign Exchange Players Form First Dealers' Club 
Vietnam Airlines 1st Qtr Passenger Load +4% Vs Year-Ago Qtr


Music giant Polygram sets up first Vietnamese foreign music
venture

Hanoi (AFP) - International music giant Polygram has appointed two
local distributers to sell its music in Vietnam, becoming the first
foreign company to offer its music here, a report here said Sunday.

Polygram Far East, the Hong Kong-based music arm of Philips
International, is set to begin selling compact discs and cassettes
through two state owned companies, the English language weekly Vietnam
Investment Review reported.

Polygram director of business development Frankie Chow, who was
contacted by telephone in Ho Chi Minh City, told AFP the group is
teaming up with Saigon Audio and General Culture of District 11, two
companies owned by the Ministry of Culture and Information in Ho Chi
Minh City.

He said Polygram was also providing a substantial sum of money to help
Saigon Audio build a world-standard recording studio, with a view to
eventually setting up a licencing deal to produce Polygram music
locally.

"In the future there is a possibility of production made by them. We
will sign a contract for licensing our label distribution," Chow said.

Demand for international music in Vietnam is still small, but growing
fast thanks to rapidly increasing disposable incomes and greater
exposure to foreign music through satellite television and local
performances by international artists.

In the past two years music fans have been treated to concerts by
British singer Sting, Canadian rocker Bryan Adams and Hong Kong
heart-throb Leon Lai -- all of whom appear on Polygram labels, says
Chow.

All music releases must undergo a thorough vetting by the Ministry of
Culture and Information, the body responsible for preventing the
invasion of undesirable foreign influences.

"We will have to go through a lot of procedures, but it will be fine
as long as there is no 'social evil' in the titles or lyrics", he
said.

Presently the only foreign music available in Vietnam comes on pirated
CDs and cassettes smuggled from China.

Saigon Audio, which has extensive retail outlets nationwide, will
become the first Vietnamese CD factory when it comes on stream later
this year.

By teaming up with the only Vietnamese CD producer, Polygram is also
protecting itself from locally made pirate CDs.

"We will sell at cost and help our local partners. In the first two or
three years, we aren't looking for profits, this is just to establish
a stepping stone," he said.

But whether local consumers will pay a premium for real thing remains
to be seen.

Polygram's labels should go on sale by July and will cost between five
and seven dollars. Imported pirate CDs are available for as little as
two dollars a piece, Chow said.
                 ___________________________________


Vietnam, U.S. Seen Making Progress On Copyright Pact

Hanoi (DJ) -- Vietnam and the U.S. are expected to make significant
progress toward a long-delayed bilateral copyright protection
agreement, perhaps even initialing a pact, when a negotiating team
visits from Washington in the coming week, individuals close to the
situation said Saturday.

'We expect a big move on copyright,' said one individual. Both nations
'appear to be serious about this now,' he added.

A U.S. trade negotiating team led by Joseph Damond of the U.S. Trade
Representative's Office will be in Hanoi from Sunday until Thursday.

The copyright agreement is expected to be the major item on the
agenda.

The U.S. finished presenting a draft of this pact last April, but
despite early U.S. hopes of progress, there has been essentially no
Vietnamese response to it since then.

Vietnam faces the possibility of being put on a U.S. copyright
violation 'watch list' at the end of April unless an agreement in
principle is reached now.

Vietnam has been estimated to have a 99% computer software piracy
rate, among the highest in the world. Pirated compact discs and videos
are readily available in urban areas.

The copyright pact is being negotiated separately from a comprehensive
U.S.-Vietnam trade agreement.

The U.S. finished presenting a draft of the overall trade treaty to
Vietnam in March.

At the upcoming meetings, Vietnam is expected to ask the U.S. team
more questions about it.

Neither side has been willing to predict how long it will take to
conclude the trade agreement. The time it takes Vietnam to respond to
the U.S. proposal is expected to be a key variable.
                 ___________________________________


Vietnam Tribeco Soft Drink Co Seeks To Partially Privatize 

Hanoi (DJ) -- Tribeco, one of Vietnam's most prominent state-owned
soft drink companies, is seeking to become partially privatized, a
company official said Saturday.

Neither the exact timing of the share offering nor the percentage of
the company that will be available to the general public have been
fixed yet, but Tribeco hopes to raise from 60-90 billion dong (around
$5.1-$7.6 million) in the transaction, said the official, who spoke on
condition of anonymity.

Currently, the company has total assets of about 30 billion dong, said
the official, in a telephone interview from Tribeco's Ho Chi Minh City
headquarters.

The Vietnamese government began a program of corporatizing and then
partially privatizing state-owned companies, known locally as
'equitization,' in 1992. So far, only about 10 companies have been
equitized. Tribeco would be among the most high-profile ones to go
through the process.

The company intends to use funds raised through the share sale to
modernize its plant and equipment, the official said.

In 1996, Tribeco had turnover of more than $10.0 million, about 90% of
its 1995 level. The official declined to discuss the company's
profitability.

Tribeco will need the approval of local and national authorities
before it can proceed.

Until now, foreigners haven't been allowed to buy shares in equitized
companies, although a pilot project to do this is under consideration.

Tribeco holds an approximately 10% stake in the joint venture
producing PepsiCo Inc. soft drinks in Vietnam.
                 ___________________________________


Vietnam-Trade : Trade ministry targets 2nd quarter deficit of
1.2 billion dollars:report

Hanoi (AFP) - Vietnam's trade ministry has set a second quarter trade
deficit target of 1.2 billion dollars, a local report said on
Saturday.

A ministry official told the Thanh Nien daily that exports were
targetted at 2.3 billion dollars for the second quarter of 1997,
representing a 28 percent increase over the same period a year ago,
while an import target of 3.5 billion dollars has been set.

According to preliminary estimates from the office of the National
Assembly, the trade deficit during the first quarter fell six percent
from the year earlier level to 945 million dollars.

Vietnam has come under increasing pressure from the World Bank,
International Monetary Fund and Asian Development bank to curb its
growing trade deficit problem which last year exceeded four billion
dollars, or 17 percent of 1996 gross domestic product.

For the second quarter the ministry has set export targets including
2.5 million tonnes of crude oil, Vietnam's largest export earner and
895,000-900,000 tonnes of rice and 30,000 tonnes of coffee.

Limitations on imports will include 1.5 million tonnes of refined
fuel, 100,000 tonnes of cement, 300,000 tonnes of steel, two
commodities in which significant stockpiles have begun to develop.

Motorbikes and motorbike kit imports will be held to 80,000 in the
second quarter.

Imports of autos with fewer than 12 seats will be held to 800 in the
second quarter.
                 ___________________________________


Vietnam Seeks U.S. Backing On Brady Debt Deal - Treasury

Washington (DJ) -- The U.S. is now studying a request by the
Vietnamese government for support of its Brady-style commercial
debt-reduction deal, a Treasury Department official said Friday.

A Treasury spokeswoman said U.S. backing of the debt-reduction effort,
which ostensibly would come in the form of U.S. Treasury securities
issued as collateral against Vietnamese government bonds exchanged for
its commercial debt, was raised by Vietnamese officials earlier this
week in talks with Treasury Secretary Robert Rubin.

The issue came up, she said, during general discussions regarding
'technical assistance.' And the official added, 'The Treasury
Department is reviewing these requests now.'

Details of Vietnam's request regarding the U.S.'s support of the Brady
deal, such as whether non-marketable Treasurys would be issued or not,
weren't immediately available.

Bank of Boston was selected by the State Bank of Vietnam last July to
help it finalize the restructuring of $900 million in foreign
commercial bank debts.

In May 1996, Vietnam reached an agreement in principal with its
commercial creditors - which are mostly Japanese banks - on a Brady
deal that would involve a 50% reduction in the commercial debt.

The commercial debt agreement was touted last year as one of the final
obstacles to Hanoi borrowing again on the international markets. But
Treasury Secretary Robert Rubin told reporters after a meeting Monday
with the head of the Vietnamese central bank that he didn't have the
sense that the government's return to international borrowings was
going to happen just yet.

Rubin also said the bank head turned over a large wish list of
technical assistance items to the secretary, who noted that he
intended to send a Treasury team back to Hanoi shortly to review the
requests.

Australia New Zealand Banking Group Ltd. (ANZ) and Mitsubishi-Bank of
Tokyo led the so-called London Club of commercial creditors in the
negotiations.

Much of the debt was run up in high-risk trade financing deals by
Japanese banks in the 1970s. No payments had been made since 1977.

Vietnam also still has a large unconvertible ruble debt, estimated to
be worth around $10 billion dating back to when it borrowed heavily
from the former Soviet Union.

Talks are expected next week over Russia's entry into the Paris Club
of creditor governments, which could open the way for Vietnam to see
some relief from the former Soviet debt given that it already has a
Paris Club rescheduling in hand.

Rubin signed the U.S.'s share of the official debt agreement with
Hanoi as recently as Monday. While nearly three years after the Paris
Club terms were reached in 1993, Rubin hailed the $145 million,
22-year rescheduling of arrears, interest and principal on certain
debts owed by the former South Vietnamese government as the start of
Vietnam's normalization with international lenders.
                 ___________________________________


Vietnam assembly set to pass first value added tax law 

Hanoi (AFP) - Vietnam's National Assembly is to approve two commercial
laws, including its first law on value added tax, in the coming weeks,
the official Vietnam News daily said Friday.

The draft of Vietnam's first laws on value added tax (VAT) and a
corporate income law was debated by National Assembly deputies on
Thursday and is expected to be passed in the next two weeks, the
English-language newspaper reported.

However, the new laws would not affect foreign investment projects
licenced before January 1, 1999 when they came into effect.

The daily newspaper quoted Vietnamese Finance Minister Nguyen Sinh
Hung as saying the prolonged grace period was necessary as the two
laws were new to both taxpayers and tax officers.

The finance minister added that the VAT law was designed to encourage
international standard book-keeping and accounting as well as to
ensure sufficient tax payment by businesses.

VAT would supercede the turnover tax stipulated in the Foreign
Investment Law that foreign investors in Vietnam currently pay.

Some businesses will be exempt from paying VAT under the new law
includig banking, financial, medical and health insurance services.
                 ___________________________________


Vietnam Foreign Exchange Players Form First Dealers' Club 

Hanoi (AP,DJ) -- In a further sign of market evolution, the Foreign
Exchange Dealers' Club of Vietnam will hold its inaugural meeting next
Friday.

The meeting is believed to be the first time representatives of all
the organizations involved in Vietnam's nascent foreign exchange
market will have gathered together at one time, organizers said
Friday.

Between 75 and 100 individuals are expected to attend, said Nguyen Thi
Ngoc Anh, director of foreign exchange at Bank for Foreign Trade of
Vietnam (Vietcombank), the dominant player in the local market.

Nguyen Hoa Binh, executive director of Vietcombank's operations
center, has been nominated to become president of the club.

The organization will aim to foster the training of dealers and
participate in drafting regulations to govern who can be involved in
the interbank market, Anh said.

The club will be open to both domestic and foreign market participants
and is forming with the encouragement of the State Bank of Vietnam,
the central bank, said Peter McLean, head of treasury at Standard
Chartered Bank.

Officially, it will be a unit of the Vietnam Bankers' Association.

The April 18 inaugural meeting will be in Hanoi.
                 ___________________________________


Vietnam Airlines 1st Qtr Passenger Load +4% Vs Year-Ago Qtr 

Hanoi (AP) -- Vietnam Airlines, the state-owned carrier, transported
711,600 passengers in the first quarter of 1997, up 4% compared with
the year-ago quarter, according to an official media report Friday.

Of the total passenger load, 290,800 were foreigners, up 7% compared
with the first quarter of 1996, The Saigon Times Daily said.

The airline also transported 10,600 metric tons of cargo in the
January-March period, up 14% from the year-earlier period.

In 1996, Vietnam Airlines carried about 2.7 million passengers.