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VN Bus. News (May 13-14, 1997)
May 14: Vietnam: Americans study feasibility of local steel investment: 2
US-based giants courted for project
May 14: Asian Cash Rice Flat; Vietnamese Supply Ample, Quota Eyed
May 13: Vietnam Exports 200,000 Tonnes Of Coffee In Four Months
May 13: FDI In Vietnam Up By 30 Pct Annually In 1991-5, ADB Told
May 13: Indonesia's BNI Says Not Buying Bank In Vietnam
May 13: Statistics - Vietnam Capital Invested In Construction
May 13: Statistics - Vietnam Food Production, April 1997
May 13: Statistics - Vietnam Industrial Production Value, April 1997
May 13: Statistics - Vietnam Industrial Products Output, April 1997
May 13: Vietnam-Asean Trade Hits US$1.6 Bln In First Quarter
May 13: Foreign Investment Projects In Vietnam Rising
May 13: More oil for Vietnam
May 13: New advertising rules for Vietnam
Vietnam: Americans study feasibility of local steel
investment: 2 US-based giants courted for project
Achara Ashayagachat, Bangkok Post
Hanoi -- Vietnam Steel Corp (VSC) has approved an American consortium
to carry out a feasibility study for the establishment of Vietnam's
first direct reduced iron steel plant.
An agreement signed Monday between the state steel corporation and
Hanoi-based Craft Corp came after the Vietnamese government approved a
pre-feasibility study, which lasted 18 months, said Greig Craft,
president of the US development and investment firm.
Direct reduced iron (DRI) is the feedstock for electric arc furnaces
and is a high quality substitute for the scrap steel normally used in
such furnaces.
Craft Corp is courting two American giants to form a consortium to
invest in the $300-million steel project, using Midrex technology from
North Carolina.
The Midrex project is of strategic significance for the development of
Vietnam's steel industry since it uses Vietnamese natural resources to
create a source of raw materials replacing scrap steel, said Pham Chi
Cuong, vice-president of VSC.
"The output of the plant can also be exported to create foreign
currency revenues for Vietnam."
Mr Craft said he anticipated that the consortium would receive
investment licences in the first quarter of next year. The plant, with
capacity of 1.2 million tonnes per year, will be located in the
southern province of Baria Vung Tau, near a gas supply location.
"Another DRI project utilising coal will be planned for the north as
well," Mr Craft said.
If approved, it would be the largest US investment in Vietnam since
the country opened to foreign investment more than a decade ago, and
the first US involvement in Vietnam's emerging steel industry.
However, industry sources were sceptical about how the project could
be run profitably if the investor had no subsidy from the government.
"Prices of energy, be it natural gas or electricity, are more
expensive than international rates. Then how can they have a cheaper
cost of production to be competitive in export markets?" asked one
Hanoi-based steel manufacturer.
More than half of the output will have to be exported since only VSC
and its joint venture with Japan's Kyoei are potential buyers, sources
said.
Most of the foreign players in the steel industry have been involved
in downstream activities since the government has not been able to
guarantee upstream investment.
Last year South Korea's Posco, one of the world's major steelmakers,
scrapped its plan to invest in a billet plant in Vietnam because it
would not be economically viable.
Posco has investments totalling US$165 million in a galvanising plant,
a steel pipe mill, and an office/serviced apartment project. But it
delayed its joint venture with Daewoo and VSC in an $800-million
upstream project to produce hot-rolled steel for import substitution.
The main problem was that the government had steered the investment
into central Vietnam where transport links to both markets and raw
materials are scarce.
Kyoei, which is now preparing an $80-million billet mill at Phu My in
Baria Vung Tau, also complained about high electricity costs.
Steel producers are currently losing money and facing huge stockpiles
due to the glut of cheaper imported steel products.
___________________________________
Asian Cash Rice Flat; Vietnamese Supply Ample, Quota Eyed
SINGAPORE (Dow Jones)--Asian physical rice offers are heard generally
steady late Wednesday, with exporters in Thailand still seeking rice
to fulfill old orders amid paddy merchant hoarding, market sources
said.
Thai offers are firm at $265/ton for the 25% broken rice and around
$340/ton for the 100%B rice and parboiled rice.
Exporters are still fulfilling their Iranian buyers' orders, rumored
to be at 200,000-300,000 tons, said a source with a local exporter in
Bangkok.
Market sentiment is buoyed by orders placed by Malaysian buyers,
though exporters aren't in a hurry to cover these orders because
shipment will start in June, lasting through August, he said.
According to him, the Malaysian buyers have contracted about 50,000
tons of Thai rice since April.
In Vietnam, offers for 25% broken rice are heard steady around
$195-$198/ton, while the 5% brokens are still offered at $230/ton.
A source with a provincial exporter in Vietnam said he has signed a
contract this week to supply 10,500 tons of 25% brokens at $195/ton,
FOB, to an African country.
Meanwhile, there are rumors that the Vietnamese government has
increased this year's export quota to 3.5 million tons. Early this
year, it set this year's quota at 2.5 million tons, with the
possibility of increasing it to 3.0 million tons after September.
A trade source in Ho Chi Minh City said the rise is possible but he
hasn't heard of any official increase in quotas.
'With the supply we have, we will have no problem exporting 3.5
million tons, but as far as I know, the official quota is still at 3.0
million tons for this year,' he said.
Vietnam government officials weren't available for comment.
In Pakistan, offers for 25% broken rice are steady around $225/ton,
said a source with a major rice mill in Karachi.
As reported, Pakistan's exports from July 1996 to April 1997 reached
1.571 million tons, up from 1.133 million tons over the same period a
year ago.
-By Joyce Teo 65-421-4825
___________________________________
Vietnam Exports 200,000 Tonnes Of Coffee In Four Months
Hanoi (VNA) - Vietnam exported around 200,000 tonnes of coffee in the
past four months, the General Department of Statistics reports, adding
that the coffee export target for 1997 only requires another 80,000
tonnes.
The country harvested 300,000 tonnes of coffee in the 1996-97 annual
crop, record productivity to date (an increase of 20 per cent over the
previous crop).
The country has already met targets for coffee production by the year
2000.
If 280,000 tonnes of coffee are exported this year, Vietnam will
become the second largest coffee exporter in Asia, after Indonesia,
and the sixth in the world's 70 coffee producing countries.
Vietnamese coffee has long been sold in 36 countries across the world
with 30 per cent of the total exports going to the US, followed by
Germany with 12 per cent.
Though Vietnamese coffee has been given high quality ratings by the
World Coffee Association, the per tonne price on world market is often
US$100-150 lower than coffee produced by other countries in the region
such as India or Indonesia, due to poor processing.
The country has seven coffee sorting and processing lines with a
combined capacity of 10,000 tonnes a year and three coffee bean
processing plants with combined capacity of 20,000 tonnes a year. Many
coffee growing households have to sun dry the beans, which then easily
decay and give mixed results, and consequently low prices.
Vietnam plans to expand acreage under Arabica coffee, now the most
preferred in the world, to 30 per cent of the country's 200,000
hectares by 2005.
___________________________________
FDI In Vietnam Up By 30 Pct Annually In 1991-5, ADB Told
FUKUOKA, Japan (AAP) - Foreign direct investment in Vietnam increased
by 30 per cent annually during 1991-1995, bringing the total amount of
committed investment to $US30 billion, the Asian Development Bank
(ADB) was told today.
Cao Sy Kiem, governor of the State Bank of Vietnam and head of the ADB
Vietnamese delegation, said that cumulative official development
assistance had also reached $US8 billion.
During 1991-95, Vietnam's annual growth in GDP had been 8.2 per cent,
and the rate for 1996 was 9.5 per cent, he said.
Exports increased by 20 per cent annually and inflation fell to 4.5
per cent in 1996.
In addition, the economic situation of the first four months of 1997
had been encouraging - industrial growth had reached 13.8 per cent,
the agriculture growth rate was expected to be 4-5 per cent, due to a
bumper crop, exports had increased by 33.8 per cent, imports were up
by 7.7 per cent and the consumer price index increased by 1.5 per
cent, compared to the same period last year.
The state bank governor also said that the remarkable economic
achievements of Vietnam were partly due to the ADB, which resumed
relations with Vietnam three years ago.
The bank had extended loans for 14 development projects and programs
totalling nearly $US1 billion and had also committed to provide
$US1.5-$1.7 billion over the period 1997-2000.
In addition, Vietnam had opened and broadened its relationships with
160 countries and territories in the world, had joined ASEAN, AFTA,
had applied for APEC membership and had expressed its intention to
join the World Trade Organisation.
___________________________________
Indomesia's BNI Says Not Buying Bank In Vietnam
JAKARTA (AAP) - The management of state-owned bank, Bank Negara
Indonesia (BNI), has denied rumours that it will acquire Indoviena
Bank Ltd., a former sister company of Bank Summa, based in Vietnam.
"The central bank, Bank of Indonesia, did offer us the chance to
acquire several banks, but Indoviena Bank is not included in the
offer," a BNI official told Republika daily here Monday.
The rumours circulating in the capital market linked the issue to the
rise in BNI's share price during last week.
Early in the week, BNI's shares were traded at Rp1,350 and before the
week end it had risen to Rp1,550 ($US: Rp2,400).
There was also speculation that BNI intended to acquire Bank Pasific.
It was also reported that the parties had reached a final accord.
One of BNI's official said that he received many calls from capital
market analysts inquiring about the issue.
"I don't know where they got that story," he added.
___________________________________
Statistics - Vietnam Capital Invested In Construction, April
1997
Hanoi (VNA) - Following are the official April statistics released by
the Vietnam General Statistics Department:
The State's Capital Invested in Basic Construction in the First Four
Months of 1997
Investment Source: Capital Invested in the First Four
Months of 1997 (VND bn) - From the State Budget - % Comparison
with the Yearly Plan Total - % Comparison with the Yearly Plan
>From the State Budget
Total: 3,142.1 - 2,601.8 - 22.1 - 24.7
Invested by:
Central level: 2,149.6 - 1,893.7 - 22.5 - 26.3
Local level: 992.5 - 708.1 - 21.3 - 21.4
Government Agencies:
Ministry of Industry:285.7 - 29.0 - 21.4 - 20.7
Ministry of
Construction: 60.9 - 18.0 - 19.3 - 32.1
Ministry of Agriculture and
Rural Development: 348.1 - 2489.1 - 20.0 - 24.1
Ministry of Aquatic
Products: 49.5 - 49.5 - 20.7 - 21.6
Ministry of Transport and
Communications: 843.1 - 843.1 - 25.6 - 30.0
Department general of Posts and
Telecommunications: 8.2 - 8.2 - 25.7 - 25.7
Ministry of Commerce: 3.9 - 3.9 - 29.0 - 29.0
Ministry of Education and
Training; 107.7 - 107.7 - 30.0 - 30.0
Ministry of Culture and
Information: 21.6 - 25.9 - 13.3 - 18.3
Ministry of Public
Health: 43.7 - 43.7 - 11.0 - 11.0
___________________________________
Statistics - Vietnam Food Production, April 1997
Hanoi (VNA) - Following are the official April statistics released by
the Vietnam General Statistics Department: Food Production in April
1997
Area: 1997 Winter-Spring Rice Crop (1,000 ha) - % Comparison
with the Yearly Plan - % Comparison with 1996 Winter-Spring
Rice Crop
Whole Country: 2,625 - 104.6 - 104.2
Northern Provinces: 1,100 - 99.1 - 98.8
Of which,
The Red River delta: 510 - 100 - 100
Southern Provinces: 1,526 - 109.0 - 108.4
Of which,
The Mekong River delta: 1,238 - 109.8 - 109.4
___________________________________
Statistics - Vietnam Industrial Production Value, April 1997
Hanoi (VNA) - Following are the official April statistics released by
the Vietnam General Statistics Department:
Industry production value in April and in the First Four Months of
1997
Sector/ Management Levels: Value Achieved (VND bn) for
April 1997 - Value Achieved (VND bn) for First Four Months of
1997 - % April 1997 Compared with April 1996 - % First Four
Months of 1997 Compared with First Four Months of 1996
Total: 10,267 - 38,699 - 113.8 - 113.8
By Economic Sectors:
State-run Sector: 5,228 - 19,499 - 110.6 - 111.6
Non-State Sector: 2,491 - 9,305 - 110.2 - 110.6
Foreign-invested Sector: 2,548 - 9,895 - 125.2 - 121.9
By Management Levels:
Central Industry: 3,459 - 13,176 - 109.8 - 110.9
Local Industry: 4,260 - 15,628 - 111.0 - 111.5
Of which:
Hanoi: 219 - 819 - 102.3 - 103.5
Ho Chi Minh City: 1,109 - 4,324 - 108.9 - 112.4
Da Nang City: 54 - 184 - 101.9 - 99.5
VND 1 billion _ US$ 90,000 (official rate)
___________________________________
Statistics - Vietnam Industrial Products Output, April 1997
Hanoi (VNA) - Following are the official April statistics released by
the Vietnam General Statistics Department:
Output of Major Industrial Products in April and First Four Months of
1997
Product (Unit): Output Achieved April 1997 - Output Achieved
First Four Months of 1997 - % April 1997 Compared with April
1996 - % First Four Months of 1997 Compared with First Four
Months of 1996
Coal (1,000 tonnes): 763.8 - 3,531.1 - 105.4 - 108.4
Crude Oil (1,000 tonnes):805 - 3,196 - 129.6 - 122.3
Vegetable Oil (1,000 tonnes): 4.5 - 17.3 - 128.6 - 124.5
Canned Milk (Mil cans): 13.8 - 46.5 - 92.6 - 90.1
Sugar (1,000 tonnes): 67.8 - 305.7 - 93.5 - 99.7
Beer (Mil Litres): 45.5 - 170.5 - 113.8 - 111.5
Cigarettes (Mil Packets):182.5 - 751.5 - 98.4 - 99.6
Yarn (Tonnes): 5,300 - 19,200 - 114.0 - 113.7
Fabrics and Silk
(Mil Metres): 21.5 - 83.1 - 104.4 - 107.9
Knitwears (1,000 Units): 2,407 - 9,029 - 91.5 - 92.3
Ready-made Garments
(1,000 Units): 2,407 - 9,029 - 91.5 - 92.3
Papers (1,000 tonnes): 18.3 - 76.4 - 121.4 -107.3
NaOH (Tonnes): 702 - 2,640 - 117.0 - 85.1
Insecticides (Tonnes): 1,025 - 3,645 - 91.6 - 67.3
Chemical Fertiliser
(1,000 Tonnes): 82.7 - 320.5 - 132.7 -100.5
Tablet Medicines
(Mil Tablets): 1,296 - 4,605.0 - 121.2 -116.2
Soap (Tonnes): 14,075 - 49,969 - 123.8 -117.7
Bicycle Tyres
(1,000 Units): 616 - 2,415 - 88.4 -106.2
Porcelain (Mil Pieces): 19.8 - 61.5 - 186.8 -176.7
Bricks (Mil Pieces): 619 - 2,497 - 107.3 -108.5
Cement (1,000 Tonnes): 652 - 2,325 - 120.7 -122.3
Steel (1,000 Tonnes): 44.7 - 163.2 - 90.7 -108.3
Tin (Tonnes): 150 - 750 - 77.3 -113.0
Tool-making machines
(Tonnes): 87 - 414 - 79.8 - 89.0
Diesel Engines (Tonnes) : 855 - 2,836 - 141.1 -135.0
Electric Motors (Tonnes):3,243 - 13,246 - 145.5 -117.2
Transformers (Tonnes): 4676 - 1,900 - 109.9 - 97.1
Electric fans (1,000 Pieces):26.2 - 70.0 - 77.7 - 60.3
Electricity (Mil kwh): 1,574.6 - 5,932.5 - 115.6 -113.0
___________________________________
Vietnam-Asean Trade Hits US$1.6 Bln In First Quarter
Hanoi (VNA) - Two way trade turnover between Vietnam and other member
countries of the Association of Southest Asian Nations (ASEAN) was
over US$1.6 billion of Vietnam's total trade value of US$3.9 billion
in the first quarter of 1997.
Vietnam grossed nearly US$783 million from exports to regional
countries while spending US$851 million on ASEAN imports.
Trade ties between Vietnam and ASEAN countries have been steadily
progressing since the country's entry into the organisation in July
1995.
The Vietnam-ASEAN trade deficit has gradually declined with Vietnam's
import surplus standing at 131 per cent in 1995, down to 65 per cent
in 1996 and 8.6 per cent in the first quarter of the year.
Singapore is the biggest trade partner for Vietnam among ASEAN
countries, which also groups Brunei, Indonesia, Malaysia, the
Philippines and Thailand. Two way trade value between the two
countries chalked up US$1.3 billion by the end of March this year,
with most of Vietnam's crude oil sold to Singapore.
With bilateral import-export turnover reaching over US$159 million,
Thailand ranked second among ASEAN countries.
Vietnam sold crude oil, coal, rubber, coffee, textiles and garment
products, vegetables, rice and sea produce to neighbouring countries
while importing cars, motorbikes, car and motorbike spare parts,
fertiliser, oil and petroleum, cement and clinker.
Most of Vietnam's exports to ASEAN countries were in the form of raw
material or semi-processing products, causing low value export
turnover.
___________________________________
Foreign Investment Projects In Vietnam Rising
Hanoi (VNA) - The Ministry of Planning and Investment has granted
licences to 94 more foreign investment projects and approved capital
increases for a number of others with combined investment capital of
nearly US$1.2 billion in the first four months of the year.
Of the newly licensed projects, projects for production sectors
accounted for 84 per cent, compared with 56 per cent in 1996.
They included 48 projects in the industrial sector with combined
investment capital of US$400 million. Five projects will make
automobile and motorbike components such as the Ha Bac automobile
glass factory, a US$1.8 million joint venture with Nippon Sheet Glass
Co Ltd of Japan, the Hanoi based US$ 13.7 million Goshi Thang Long
joint venture with Japan and Thailand to produce automobile and
motorbike spare parts.
The three other joint ventures are the Inoue rubber joint venture with
two Japanese companies capitalised at US$32.7 million to make
automobile and motorbike tyres and tubes, the Japanese invested
Yokohama Vietnam US$ 55.1 million tyre joint ventures, and the Taiwan
invested Kenda US$15 million tyre joint venture.
Other industrial projects include a US$4 million joint venture with
Japan to manufacture washing machines accessories; a US$1.5 million
joint venture with Japan to produce medical instruments; and two other
joint ventures to produce airconditioners, one capitalised at US$10
million with the Singapore-based Subsidiary of Carrier USA, and
another capitalised at US$6.3 million with the Singapore subsidiary of
Toshiba Japan.
Agriculture and food processing projects are also on the rise. They
include a fruit juice production joint venture project with Taiwan
costing nearly US$5.7 million in Hai Duong province; a joint venture
with Japan to grow organic vegetables for export in the Central
Highlands province of Lam Dong, costing US$1 million; and a US$8.6
million joint venture with Cuba to raise cattle and process beef in
Ninh Binh province.
Two projects plan to invest in the building of infrastructure
facilities, one in the North Thang Long industrial zone in Hanoi and
the other in the Dinh Vu industrial zone in the port city of Haiphong.
The Hanoi project with the Sumitomo Group of Japan has investment
capital of US$15.3 million. The Haiphong project is capitalised at
US$80 million with most capital drawn from Infras-Asia Development Ltd
of the British Virgin Islands.
MPI Vice Minister Nguyen Nhac said that about 80 more projects with
combined proposed capital of US$2 billion are awaiting approval and
that other projects, each valued at in the billions of dollars, in
natural gas, power and fertiliser, and farm produce processing were
still under negotiation.
___________________________________
More oil for Vietnam
HART'S DAILY PETROLEUM MONITOR
London - The Petronas-led JV, with partners PetroVietnam and IPC of
Canada, has confirmed that the Bunga Kekwa A-4 well will start up in
July this year, at an initial rate of 25,000 b/d of oil.
Output should rise to 50,000 b/d of crude and 250 MMcf/d of gas in
1999. The well lies in the Malaysia/ Vietnam Commercial Arrangement
Area at the southern end of the PM3 concession between the southern
tip of Vietnam and Malaysian coast.
___________________________________
New advertising rules for Vietnam
Scrip, May 13, 1997
The Vietnamese Health Ministry has issued a new regulation on drug
advertising under which companies will not be permitted to advertise
medicines for the treatment of tuberculosis, mental disorders,
sexually transmitted diseases, sleeping disorders, cancer, diabetes or
stimulants, reports the Vietnamese news agency, VNA.
Advertisements for other medicines and cosmetics will be allowed to
run for a maximum of five days in a daily newspaper, on 50 radio
broadcasts for five days, or on 40 television programmes for eight
days. Any promotional workshops must be organised in collaboration
with an approved Vietnamese pharmaceutical agency, such as the
pharmacists' association, the medical association, and hospitals. The
ministry is also banning advertisements of medicines and cosmetics not
registered with the Vietnamese authorities, or whose licences have
expired or been cancelled.