VN business news (July 11)

[van <van@rock.civil.saitama-u.ac.jp>]

Vietnamese Cash Rice Seen Steady Despite Harvest
Vietnam Targets 2H Industrial Production At 14.1%
Vietnam Statistics Confound Foreign Investors
Heineken Sees Resolution On Vietnam Loan Payback
Mobile Phone Joins Ranks of Vietnam Status Symbols
World Bank unit lends 41 million for Saigon Hilton
Vietnam rubber production up 6.5 percent in first six months
Dong overvalued but little likelihood of devaluation
US Trade and Development Agency director to visit Vietnam next week
Japan's Tsukishima Kikai to build Vietnam sugar refinery
Joint venture tourist complex opened in central Vietnam
Foreign investors must have forex accounts in Vietnam
Vietnam earns US$522 mln from farm, forest products
Vietnam to approve Mekong delta master plan to 2010
Toyota sets up technical training centre in Vietnam

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Vietnamese Cash Rice Seen Steady Despite Harvest

July 11 (Dow Jones) - Vietnamese offers are unchanged around $260/ton for 5% 
broken rice, while 25% broken rice offers are stable at $225-$230/ton.

Quotes for Thai 100%B rice are heard largely unchanged at $340-$345/ton, while 
25% broken rice is priced flat at $265/ton. In Andhra Pradesh,India, 25% broken 
rice remains offered at $245/ton.

There is talk of Vietnamese prices remaining largely firm or slightly lower in 
the face of the summer-autumn harvest, which has started in some areas. The peak 
of the harvest is expected late this month or early next month.Even then, prices 
may not fall much because the summer-autumn crop is expected to be smaller and 
demand is still good.

The U.S. Department of Agriculture forecast Friday that Thailand's rice 
production for the 1997-98 marketing year will total 14.2 million metric tons, 
up from 13.9 million tons in 1996-97.The country's rice exports are forecast to 
reach 5.5 million tons in 1997-98, up from 4.8 million tons in the prior 
marketing year.

Separately, the USDA projected Vietnam's output would total 18 million tons in 
1997-98, equal to production in 1996-97. Vietnam's rice exports are expected to 
total 3.5 million tons in 1997-98,up slightly from the 3.25 million tons 
exported in the prior marketing year.

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Vietnam Targets 2H Industrial Production At 14.1%

Hanoi, July 11 (Dow Jones) -- Vietnam's Ministry of Industry has targeted an 
industrial production growth rate of 14.1% for the second half of 1997 and is 
planing measures to boost access to capital.In the first half of 1997,industrial 
production was up 13.7% on the year.

According to the state-run publication, Dau Tu, the Ministry wants to boost 
production by giving machinery manufacturers no-interest loans for five years.It 
also suggested abolishing capital tax and changing the way company assets are 
revalued.

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Vietnam Statistics Confound Foreign Investors

Hanoi, July 11 (Dow Jones) -- This is the problem that confounds economists,
government officials and foreign investors alike. Getting data is hard here and 
getting accurate data is even more difficult.This lack of concrete information 
means it's tough to make informed decisions about investment, marketing or just 
about anything.

A lack of organized systems for data collection is part of the problem,
observers say and a number of multilateral institutions such as the
International Monetary Fund, World Bank and Asian Development Bank are
working with the Vietnamese to improve data collection.

Monetary data about Central Bank operations is relatively easy to get
while data about the private sector economic growth and the financial
sector is sadly lacking, observers say.

The government's General Statistics Office (GSO) has tried hard to standardize
the release of information and now releases monthly figures, including
inflation, trade deficit and industrial production.

The office is also working on a new edition of its now out-of-date 'stasistical
dictionary' which explains the department's methodology.

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Heineken Sees Resolution On Vietnam Loan Payback

HANOI, July 11 (Dow Jones) -- Dutch brewer Heineken NV (HINKY) said Friday
it is still in talks with the Vietnamese authorities, and the syndicated
banks, about the repayment of part of an outstanding bank loan after
Heineken was unable to buy from the Vietnam's Central Bank the dollars
needed to repay the loan.

Heineken is active in Vietnam through its 42% stake in Asia Pacific Breweries
which has a 25.5% stake in Vietnam Breweries Ltd.It was due on June 24 to make 
the first $5 million payment on a $32 million loan.The loan was taken out by 
Heineken, and syndicated by five foreign banks,to pay for the expansion of its 
brewery in Ho Chi Minh City. Its repayment had to be in dollars as the dong is 
not a convertible currency.

The Vietnamese central bank recently said it would adhere more strictly to 
previously existing regulations that could allow it to refuse to convert dong 
into dollars.
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Mobile Phone Joins Ranks of Vietnam Status Symbols

HANOI, July 11 (Reuter) - The official Vietnam News Agency reported that the 
number of users nationwide stood at 115,000 as of the end of June. In early 
1996, the figure was close to 20,000. By the end of the year it stood at 63,000.

Two national mobile networks, VMS and Vinaphone, accounted for around 100,000 
users, while a Ho Chi Minh City-based service, Call Link,had 15,000 subscribers.

A fourth company, the Saigon Telecommunications stock company,had been licensed 
to join the fray and was expected to begin operations later this year.

Mobile phones have fast acquired the prestige of a status symbol in Vietnam.
Industry estimates say the number of users is expected to approach 150,000
by the end of this year and reach half a million by 2005.

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World Bank lends 41 million for Saigon Hilton of Vietnam's Tourism Sector 

WASHINGTON, July 11 (AFP) - The World Bank's International Finance Corporation
said it had approved a 41 million dollar loan to finance a new international 
standard hotel,located in the central district of Ho Chi Minh City on the west 
bank of the Saigon River.

The loan will cover about half the cost of the Saigon Hilton (i.e.some 81.5 
million dollars) which will have 390 rooms and 30 service apartments.

The IFC's financing consists of a loan of 9.5 million dollars for its own 
account, a subordinated loan of 3.55 million and a syndicated loan of 28 million 
dollars for the account of participants.

The IFC is a member of the World Bank Group and the largest multilateral source 
of equity and loan financing for private sector projects in developing 
countries.

France's Credit Agricole Indosuez was the co-arranger of the financing and the 
lead manager of the loan.

The hotel will be owned by Societe d'Economie Mixte Pointe des Blagueurs,
a joint venture between a Vietnamese state entity and foreign investors.

The foreign investors involved are French hotel company Feal International SA 
and Hilton International Co, which is a unit of Ladbroke Group PLC (U.LAD),
a U.K. hotel and leisure group. The local sponsor is state-owned tourism
and hotel group Saigon Tourist.

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Vietnam rubber production up 6.5 percent in first six months

HANOI, July 11 (AFP) - Vietnam's rubber production increased 6.5 percent
year on year in the first half of 1997 to more than 50,000 tonnes, the
official Vietnam News Agency reported Friday.

Total export earnings from exports of 13,000 tonnes of rubber in the first six 
months were 16.2 million dollars.Increasing rubber output was attributed to 
favourable weather and expansion of rubber cultivation.

Vietnam presently has about 270,000 hectares of rubber trees which can
produce up to 160,000 tonnes of dried latex each year.

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Dong overvalued but little likelihood of devaluation: bankers

HANOI, July 11 (AFP) - The Vietnamese dong is not likely to undergo any major 
depreciation despite being overvalued, foreign analysts said on Friday.

"If the dong was traded internationally, I think it would be under seige.
But as it is not, I think it's pretty safe," said Jean Luc Bernasconi,
economist at the UN Development Programme in Hanoi.

He said Vietnam's currency is not subject to the same speculative forces that 
pressure Thailand to float the baht exchange rate since the Vietnamese dong is 
not traded offshore and its value is a function of trade and inward investment 
only.

Bernasconi pointed out that the absence of hot money, has helped Vietnam's
central bank manage its official exchange rate which has remained stable
at about 11,120 to the dollar for several weeks.

However he pointed out that the success of the managed rate of the dong
belies an underlying instability of the system where there is a shortage
of dollars.

Several Vietnamese banks, including the largest state-owned commercial
bank, Vietcombank, have defaulted on letters of credit in recent months.

At a State Bank of Vietnam press conference last week, it was estimated
that Vietnam has failed to pay about 60 million dollars worth of letters
of credit.

However Vietnam has sufficient foreign exchange reserves, roughly two
billion according to the International Monetary Fund, and its failure
to pay on time was due to unwillingness, not inability.

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US Trade and Development Agency director to visit Vietnam next week

HANOI, July 11 (AFP) - The director of the US Trade and Development Agency
(TDA) will visit Vietnam from July 14-19, the United States Information
Service said on Friday.

Joseph Grandmaison, TDA director will meet with officials of the ministries
of Finance, Industry, Construction and Planning and Investment as well as with 
state-owned telecommunications and power companies.

It is the first visit from an official of the TDA, which is a government
agency aimed at helping countries develop infrastructure and industrial
projects.

Grandmaison's visit comes on the heels of a trip to Vietnam by US Secretary
of State Madeleine Albright in late June, and is aimed at promoting stronger
economic ties.

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Japan's Tsukishima Kikai to build Vietnam sugar refinery

TOKYO, July 10 (Nikkei) - Tsukishima Kikai Co., a leading environmental safety 
plant and chemical plant builder, will set up a sugar refinery in Vietnam 
costing 2.7 billion yen (about $US24 million).

Tsukishima announced Wednesday it had received the order for the plant,
to be built in Lam Son, Thanh Hoa province.

The project will be the first fully Vietnamese-financed, large-scale sugar 
refinery. Vietnam aims to raise its sugar production quota to 1 million tons by
the year 2000.

The plant will process 4,000 tons of sugar cane daily and will have a daily 
production capacity of 200 tons of raw sugar and 200 tons of refined sugar.

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Joint venture tourist complex opened in central Vietnam

Hanoi, July 10 (VNA) - The Bac My An Tourist Complex has been put into
operation in the central coastal province of Da Nang with the complex
including a five-star 206-room hotel, swimming pools, tennis courts,
restaurants, and other facilities.

The complex was built in ten months by a joint venture between the Quang
Nam-Da Nang Tourism Company and the Indochina Beach Hotel Company from
Hong Kong.

The JV has total invested capital of US$35 million, to which the Vietnamese
party contributed 25 percent.

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Foreign investors must have forex accounts in Vietnam

Hanoi, July 10 (VNA) - The State Bank of Vietnam (SBV) in a circular dated June 
28 gave guidance on the management of foreign currencies by foreign-invested 
enterprises and the foreign partners of business co-operation contracts (BCC).

Foreign-invested enterprises must open accounts in foreign currencies at a bank 
in Vietnam authorised to transact business in foreign currencies. Should it be 
necessary to open an overseas bank account,the SBV may consider allowing the 
foreign-invested enterprise to have it in order to receive loans transferred to 
it and to pay debts. However, SBV stipulated each loan contract must be valued 
at US$3 million minimum or equivalent for any other currencies.

Foreign-invested enterprises and foreign partners in BCC must find foreign
currency for their operations and contribute it beforehand to the joint
venture or business co-operation project as stated in the contract approved
by the competent authority. The exchange of Vietnamese and foreign currencies
must be at the rate fixed by SBV for the day.

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Vietnam earns US$522 mln from farm, forest products

Hanoi, July 10 (VNA) - The Ministry of Agriculture and Rural Development of 
Vietnam earned over US$522 million from exports of processed farm and forest 
produce in the last six months, a year-on-year increase of 17.52 percent.

Export turnover in June alone accounted for US$126 million, increasing by 27.28 
percent more than the previous corresponding period.

Twenty-five of the 37 items exported in the first six months posted year-on-year
increases, including rubber, pepper, coffee, beans, pork and beef, rice,
dried bananas, feathers, tea, maize, mushrooms, and pickled cucumbers.

As many as 198,600 tonnes of coffee were sold to 40 foreign countries in the 
first four months of this year.

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Vietnam to approve Mekong delta master plan to 2010

Hanoi, July 10 (VNA) - A master plan to develop the Mekong delta from now to 
2010 has been submitted to the Government for approval.

The project is estimated to cost US$34 billion, with 13 percent of the funds 
coming from the State budget, 41 percent mobilised from private concerns, and 
the remainder from foreign aid and investment.

Under the plan, the Mekong delta will be developed to become Vietnam's biggest 
agricultural and aquatic production area, meeting export and domestic demands 
for food and foodstuffs.

Developing agriculture in parallel with structural diversification will be a 
major task for the delta, decreasing the cultivation rate from 79 percent at 
present to 62 percent by 2010, increasing livestock breeding from 21 percent to 
38 percent, expanding cultivated land acreage from two million ha at present to 
2.9 million ha, including 1.9 million ha of food crops, yielding an output of 18 
million tonnes a year, accounting for 55 percent of the country total food 
output.

The aquatic sector will also be an important economic sector in the region with 
a target of over one million tonnes of aquatic products by 2010.

The delta will boost food and foodstuff processing industries to make up 60 
percent of the regions total industrial output.

>From now until 2010, the delta will strive for year-on-year industrial growth of 
13-14 percent. A 3,000 ha industrial zone is planned to be built in the region 
in the next decade.

The region's export turnover of agro-produce is planned to reach US$8.6 billion, 
marking an increase of about 18-20 percent each year.

The development of infrastructural facilities, including roads, ports, airports, 
irrigation works, and drainage systems in flood-stricken areas, will be another 
important task for the region.

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Toyota sets up technical training centre in Vietnam

TOKYO, July 10 (Nikkei) - The Toyota Motor Vietnam Co. Ltd.(TMV) held a ceremony 
on Wednesday, July 2 in Hanoi commemorating the opening of The Toyota Motor 
Vietnam Training Center in Vietnam. Located in Vinh Phuc province, the new 
center will train between five and six hundred technicians per year and 
contribute to the Vietnamese economy.Establishing the Training Center is one of 
the steps of Toyota's technology transfer process. 

TMV will expand operations in co-operation with other educational organizations
to provide Vietnam's economy with trained labourers with best industrial
working style and high skills for advanced automotive technology.

TMV was established in September 5, 1995 and produces Toyota Hiace and Corolla 
models. 

Outline of Training Center

Address: Phuc Thang commune, Me Linh district, Vinh Phuc province

Floor Area: 417 m2

Number of Rooms: 2

Other Facilities: Car lifts, Engine Simulator, Electrical Simulator

Capacity: 500-600 person training per year

Total Investment: US $400,000

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