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Vietnam Business News (July 9)
Vietnam Coffee: 1996-97 Crop Exports Over 300,000 Tons
Vietnam Govt Plans Fund To Boost Export Rice Quality -Report
Vietnam Investment Should Boost Export Funds - World Bank
Vietnam Central Bank Places 150 Bln Dong T-Bills At 11%
Vietnam Government Should Let Go of State-Ownership: World Bank
Vietnam Steel Corporation posts first half losses: report
Vietnam's Ambivalence Results in Few Tourists
Vietnam Prime Minister Orders Survey Of State Assets
Trans - Vietnam Highway Reconstruction Ahead Of Schedule
Vietnam Projects - Various, Infrastructure
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Vietnam/Coffee: 1996-97 Crop Exports Over 300,000 Tons
SINGAPORE (Dow Jones)-- Vietnam's coffee exports rose 94.6% in the first
half of 1997 to 248,000 metric tons from 127,500 tons in the same period
in 1996, Doan Trieu Nhan, Chairman of Vietnam's Coffee and Cocoa Association
(Vicofa) told Dow Jones Wednesday.
Nhan predicted a larger Vietnamese crop in 1997-98 of around 320,000
tons, of which 310,000 tons will be exported.
'It will be big progress in our coffee industry,' Nhan said. 'The weather
is good for the coffee. The plantations surveyed are good and we estimate
production at 320,000 metric tons,' Nhan said.
While trade and industry sources have estimated 1996-97 production at
between 280,000-300,000 tons, Nhan said exports of the 1996-97 crop topped
300,000 tons.
Vietnam's arabica coffee output is seen at 2,000 tons in the crop year
1997-98, against slightly less than 1,000 tons the previous year, Nhan
said.
Vietnam is receiving aid in the form of loans from the French government
to carry out a project boosting arabica production in the north of the
country.
'We are doing all the formalities to borrow the money from the French
government as soon as possible,' Nhan said.
Arabica is a fine variety of coffee produced on higher ground and realizes
higher prices than the more hardy robusta variety.
Currently Vietnam produces around 300,000 tons of robusta and 2,000 tons
of arabica.
Farmers in Sonla province estimate the arabica crop from that region
alone will total more than 1,000 tons in 1997-98, Nhan said.
Following the 1996-97 season, when poor weather hampered the processing
of coffee, the government is working to increase drying capacity and
provide more effective drying grounds, Nhan said.
'We have learnt from the experience of last year's weather, and this
year the situation should be better,' Nhan said.
Exporters of Vietnam's 1996-97 coffee crop were also dogged by quality
problems, most commonly mold, resulting in the rejection of a high percentage
of Vietnamese coffee by the London International Financial Futures and
Options Exchange.
Officials and traders in Indonesia, Asia's foremost coffee producing
country have predicted a 40% drop in Indonesia's coffee production to
270,000 tons in 1997-98.
Vietnam will, for the first time in its ten year history as a coffee
producer, overtake Indonesia as the largest coffee producer in Asia,
traders said.
The huge increase in Vietnam's projected exports for first half 1997-98
from the corresponding period in 1996-97 is attributable to higher world
coffee prices, traders said.
Coffee prices surged in the first half of 1997, touching a twenty-two
year high early in the year.
The 1997-98 crop is expected to arrive on the market around November
if weather conditions continue to be favorable, traders said.
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Vietnam Govt Plans Fund To Boost Export Rice Quality -Report
Hanoi, July 9 (Dow Jones) -- The Vietnamese government is planning to
set up a fund to boost the quality of its rice exports, the Vietnam News
reported Wednesday.
According to the state-run newspaper the government plans 'large-scale
and long-term investment to improve the export quality of rice,' particularly
in the Mekong Delta.
The newspaper also said Deputy Minister for Agriculture and Rural development
Nguyen Thien Luan wants rice exporters to contribute to a fund which
would support them during 'lean times.'
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Vietnam Investment Should Boost Export Funds - World Bank
Hanoi, July 09 (Dow Jones) -- Vietnam should seek foreign investment
which will boost export revenues and deepen 'domestic value added,' the
World Bank's outgoing country representative said Wednesday.
In a briefing to journalists, Bradley Babson said the amount per capita
of foreign investment in Vietnam is large and that the country needs
to focus on the 'quality' of investment it receives.
Instead of, say, just assembling shoes or garments, Vietnam needs to
develop ways to produce the necessary materials domestically, he said.
Babson, who has been in Vietnam for three-and-a-half years, also said
Vietnam should further develop its export processing capabilities, especially
for products such as rice, cashews and rubber.
The Ministry of Planning and Investment 'is beginning to get the message,'
Babson said.
Babson also said, in keeping with the World Bank's general view, that
there is a large economic role for the Vietnamese government to play
but it should emphasize regulation and protecting the public interest.
'The minimalist state is not appropriate,' Babson said. Vietnam needs
a 'competent state that can do things to complement the things the market
can do,' he said.
He added that policy coordination needs to be strengthened and the government
should focus on this and 'let go of making shoes and cement.'
Turning to the question of the World Bank's support of large infrastructure
projects, Babson said the Bank's position is that the proposed North-South
highway should be studied before the Bank can decide whether to support it.
'There has not been a disciplined economic analysis' of what goods would
be transported and how, Babson said.
In its fiscal year ending June 30, 1997, the World Bank disbursed $250
million on projects in Vietnam, up from $35 million in the previous year.
The Bank now has 14 projects under implementation and Babson said in the future
this will likely rise to 20 to 25, excluding other projects
under consideration.
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Vietnam Central Bank Places 150 Bln Dong T-Bills At 11%
Hanoi, July 09 (Dow Jones) -- The State Bank of Vietnam, the country's
central bank, awarded 150 billion dong of 12-month Treasury bills at
a yield of 11.0% Wednesday.
At its July 2 auction, the Vietnamese central bank also awarded 150 billion
dong of Treasury bills, at a slightly higher 11.15% yield.
Successful bidders were:
Incombank:73.2 billion dong
Vietcombank: 60.0 billion dong
Asia Pacific Bank: 5.0 billion dong
Vietnam Insurance Co. (Bao Viet): 4.0 billion dong
National Reinsurance Co.: 3.1 billion dong
Standard Chartered Bank: 2.7 billion dong
Petrolimex Joint-Stock Insurance Co.: 2.0 billion dong
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Vietnam Government Should Let Go of State-Ownership: World Bank
HANOI, July 9 (AFP) - The government of Vietnam should "let go" of the
idea of state ownership of assets and concentrate instead on regulation,
a World Bank official said on Wednesday.
"Vietnam needs to shift away from being an owner of assets and concentrate
on building regulation," said the World Bank chief representative to
Vietnam, Bradley Babson.
Babson argued not for a smaller role of the state in the economy, but
an evolution away from state ownership towards better economic management.
"It is best in terms of long term goals if the government looks at the
functions of regulation to protect the public interest and preserve values
rather than control things through ownership," Babson told a journalists'
luncheon.
Babson, who will end a three and a half term as World Bank representative
to Vietnam at the end of this month, acknowledged there was plenty of
resistance to the idea of divesting state ownership, especially within
the ruling Communist Party.
Last year at the Communist Party Congress, for example, the party pledged
a leading role of the state sector in Vietnam's development strategy.
Babson said Vietnam needed to focus on developing institutions capable
of handling the demands of an increasingly complex economy if current
growth rates hovering around nine percent are to continue.
"Vietnam is struggling with complicated pressures its institutions are
not sophisticated enough to deal with," Babson said.
Policies designed to advantage state owned enterprises over the private
sector were contradictory to sustained long term growth, he added.
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Vietnam Steel Corporation posts first half losses: report
HANOI, July 9 (AFP) - The state-owned Vietnam Steel Corp. (VSC) lost
1.12 million dollars in the first half of 1997 due to weak demand and
high costs. According to a report by the Ministry of Industry, VSC has
stockpiled 190,000 tonnes in the six months, the Lao Dong newspaper said.
Despite Vietnam's efforts to build up its heavy industry sector, the
domestic steel industry has languished in the face of cheap imports and
high input costs.
In early May the government slapped a ban on construction steel imports,
and all imports of steel fell 46.3 percent during the first six months
compared with the same period in 1996.
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Vietnam's Ambivalence Results in Few Tourists
For the first time in five years the number of foreign visitors
to Vietnam has declined, by 7% to 700,000 for the five months ending
May 31 from a year earlier, according to official statistics. The chances
of meeting the government's target of 1.9 million arrivals this year
seem remote. Arrivals from Taiwan, Japan and France, Vietnam's top three
sources of tourists, have dropped by a total of 13%.
There is a reluctance on the part of the government to open its doors too widely
to tourism.Vietnam's National Administration of Tourism has said in official
state media that too many tourists could lead to "environmental problems," and
foreign influences could lead to "social evils," a catch phrase for anything
perceived as threatening social and political stability.
Vietnam's best hope is to develop its beach resorts.Several international
standard beach hotels already have been built and many are under construction,
but most are less than half full. That's partly because steep airfares and visa
hassles make Vietnam less appealing as a relaxing getaway than Thailand or the
Philippines, which are easier and cheaper to get to and offer better beaches and
hotels at better prices.
Travel agents are also trying to get hotels to reduce rates. That's gradually
happening, but hotels are eager to get a benefit back as soon as possible to
recover the high costs of constructing a hotel in Vietnam.
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Vietnam Prime Minister Orders Survey Of State Assets
Hanoi, July 8 (VNA) - Vietnamese Prime Minister Vo Van Kiet has ordered
a review of all state administration fixed assets by a Steering Committee
chaired by the Finance Minister.
The decision provides that the review will include offices outside Vietnam,
as well as social and political organisations financed by the state.
The review will begin within 15 days.
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Trans - Vietnam Highway Reconstruction Ahead Of Schedule
Hanoi, July 8 (VNA) - The trans- Vietnam Highway 1A upgrade is rolling
along ahead of schedule, a Ministry of Construction (MOC) official said.
Thirty of 34 kilometres on the Ho Chi Minh City-Can Tho highway section
have been completed and construction of the project's 41 bridges is moving
quickly, according to a recent MOC report.
Mr Le Huu Chien, bridge projects chief under the Project Management Unit
18 (PMU18), said 12 percent of the work was complete and on schedule.
At the current pace, he said, some of the bridges would be open to public
by the end of 1998 and all bridges would be finished by 2000.
The heavily-bombed 2,400 metre Hien Luong bridge over the Ben Hai river,
which divided the country during the American War, is expected to be
completed by the end of 1998.
Another bomb-devastated bridge, the Ham Rong bridge in the central province
of Thanh Hoa, is set to start construction this month.
In Tien Giang province, construction companies 4,5 and 6 are building
five emergency bridges in flood-prone areas.
The Highway 1A project has funding from the World Bank, the Asian Development
Bank (ADB) and the Overseas Economic Co-operation Fund (OECF) of Japan.
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Vietnam Projects - Various, Infrastructure
Hanoi, July 8 (VNA) - Vietnam's Ministry of Planning and Investment has
issued a list of 23 infrastructure projects for Build-Operate-Transfer
(BOT) foreign investment. Following are these projects:
1. Ho Chi Minh City - Vung Tau Highway
Estimated Capital: US$314 million
Technical Specification: 59km, 28-30 m width, 6 lanes, a 1,100m long
bridge and a 200m long bridge.
Location: Ho Chi Minh City - Vung Tau
2. South Thang Long - Hung Vuong Highway
Estimated Capital: US$100 million
Technical Specification: 6.8km, 60m width, 8 lanes
Location: Hanoi
3. Building the Thu Thiem Bridge
Technical Specifications: 1km, 8 lanes
Capacity: H30 - XB80
Location: Ho Chi Minh City
4. Building the Bai Chay Bridge
Technical Specification: 900m, 23m width, and 4 lanes for vehicles
Capacity: H30 - XB80
Location: Quang Ninh province
5. Building the Can Tho Bridge
Technical Specification: 2km, 18m width, 6 lanes for vehicles
Capacity: H30 - XB80
Location: Can Tho province
6. Electrifying the Gia Lam-Van Dien railway
Technical Specification: 15km
Location Hanoi
7. Building water supply systems for industrial estates, cities and townships
situated both sides of Highway 51.
Capacity: 420,000 cubic metres/day, which is expected to be recorded in the
first phase and increase in the second phase.
Location: Ba Ria - Vung Tau province
8. Building the Da Nang safe water supply plant
Capacity: 20,000 cubic metres/day
Location: Da Nang city
9. Building factories to turn solid waste into fertiliser.
Capacity: treating 400,000 tonnes of waste per day, producing 100,000 tonnes of
fertiliser per year.
Location: Ho Chi Minh City, Hanoi, Hai Phong, Da Nang and Hue.
10. Building a hydro-electric power plant
Capacity: 252MW, three turbines, and 1,164 billion Kwh/year
Location: the southern province of Dong Nai
11. Building the Pleikrong hydro-electric power plant
Estimated Capital: US$236 million
Capacity: 120MW, two turbines, and 523 million Kwh/year
Location: the Central Highlands province of Pleiku
12. Solid waste treatment
Estimated Capital: US$30 million
Capacity: 400,000 tonnes/year
Location: Ho Chi Minh City
13. Solid waste treatment
Estimated Capital: US$30 million
Capacity: 400,000 tonnes/year
Location: Hanoi
14. Solid waste treatment
Estimated Capital: US$15 million
Capacity: 200,000 tonnes/year
Location Haiphong port city
15. Solid waste treatment
Estimated Capital: US$15 million
Capacity: 200,000 tonnes/year
Location: the central coastal city of Da Nang
16. Solid waste treatment
Estimated Capital: US$15 million
Capacity: 200,000 tonnes/year
Location: the central province of Thue Thien - Hue
17. Upgrading the Phu My Thermo-electric Power Station 2 - 1
Estimated Capital: US$160 million
Capacity: 150MW
Location: Ba Ria - Vung Tau
18. Building the Dong Nai Hydro-electric power plant 4
Estimated Capital: US$248 million
Capacity: 200MW
Location: Dong Nai province
19. Building a solid waste treatment plant
Estimated Capital: US$200 million
Capacity: 200,000 tonnes/year
Location: Ho Chi Minh City
20. Building the Ha Long airport
Estimated Capital: US$200 million
Location: Ha Long city of Quang Ninh province
21. Ha Long - Hai Ninh section of Highway 18
Estimated Capital: US$100 million
Location: Quang Ninh province
22. Building an expressway from the Noi Bai International Airport to Cai Lan
port
Estimated Capital: US$450 million
Technical Specification: 150km, Pha Lai bridge
Location: Hanoi and Quang Ninh province
23. Building a safe water supply plant and an urban drainage system
Estimated Capital: US$50 million
Capacity: 100,000 cubic metres of safe water per day
Location: Haiphong port city
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