High logistics costs hold back Vietnam’s economic development

March 12, 2009, 3:53pm

High logistics costs are responsible for holding back the development of the Vietnamese economy. This is just one of the conclusions of the latest market research report from Transport Intelligence, Vietnam Logistics 2009.

At the same time as Vietnam is seeking to terms with the global economic slowdown, weak infrastructure and high inventory levels are proving to be a significant drag on its economic development.

Logistics costs in the market are estimated to be 20-25 percent of Vietnam’s GDP, a ratio far higher than that in developed economies such as the US and higher even than in other developing economies such as China. These high costs have hindered Vietnam’s efforts to take advantage of its cheap labour resource and develop the national export economy.

The report puts this down to a combination of over-stretched and ageing transport infrastructure, including ports, airports, road and rail; inefficient bureaucracies, customs clearance delays; and the unwillingness of Vietnamese manufacturers to outsource to foreign 3PLs (third party logistics providers).

The report additionally finds that a substantial proportion of Vietnam’s logistics costs can be attributed to high inventory holdings.

However, the report also finds that this situation is gradually changing.

The Vietnamese government has invested billions of dollars in the country’s infrastructure and this investment is slowly beginning to pay dividends.

In addition, the government is encouraging foreign direct investment in projects such as the Cai Mep Container Port near Ho Chi Minh City in the Mekong River delta. An estimated $628m is being invested in the construction of that facility which will have an annual handling capacity of 1.7m TEUs (twenty-foot equivalent units) on completion. The new Long Thanh airport, near Ho Chi Minh City, should also improve supply chain efficiency when it is finally constructed, although this won’t be until 2015.

One of the most obvious logistics-related benefits to Vietnam from increased investment in transport infrastructure has been enhanced road links with its neighbors.

The Kunming-Hekou-Hanoi-Haiphong Corridor has allowed road freight operators such as TNT and Kerry Logistics to connect the country to their regional ground networks, bypassing ports and airports and hence reducing international freight costs by up to 30%.

However, overall, it can be said that the speed of infrastructure development in Vietnam is much slower than that in its neighbour and rival, China. Large inventory holdings and slow moving supply chains will delay the Vietnamese economy’s recovery, post global recession.

Source: Manila Bulletin

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Dung Quat Industrial Zone licenses foreign-funded project

The Dung Quat Industrial Zone’s management board has granted an investment licence to the wholly foreign-invested DOOBON Viet Nam Co Ltd, which has US$28 million for investment.

The company plans to build a 98,300sq.m factory for the production of a range of household goods, such as shampoo, hair conditioner, sunscreen and liquid soap.

This is the 33rd foreign project licensed in the industrial zone, with combined registered capital totalling more than $4 billion.

Source: vnbusiness

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Da Nang calls for investment in hi-tech park

The Da Nang Investment Forum 2009 will take place on March 27 at Furama Resort to introduce and call for investment in a 1,400ha hi-tech park.

According to the Da Nang Investment Promotion Centre (IPC Da Nang), this hi-tech park will be built on 1,400ha of land in Hoa Nhon commune, Hoa Vang district, around 20km from the centre of Da Nang, 10km from Da Nang Airport and 30km from Da Nang Port.

This park will include a hi-tech zone, a research and development area, a technology nursery, a human resource training centre, a non-tariff zone, a service and management zone, accommodations for exports and daily service area.

IPC Da Nang’s Deputy Director Le Canh Duong said the city will apply many incentives related to tariff, land, and administrative formalities to promote investment in this park.

At the forum, the chief representative of the Japan External Trade Organisation (JETRO), Hiroyuki Moribe, will deliver a presentation about Japan’s experience in building hi-tech parks.

Da Nang and the Viet Nam Post and Telecommunications Group (VNPT) will sign an agreement on building telecom facilities for the park. The city will also sign a deal with the Telecom and Computer Integrated Solutions JS Company on manufacturing hi-tech products in the park.

The forum will attract over 200 delegates, including government officials, over 90 of whom are from foreign organisations and groups in the US, Japan, South Korea and Taiwan and foreign investors in Viet Nam.

Source: vnbusiness

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Kume Sekkei opens its subsidiary in Vietnam

Kume Sekkei, one of Japanese largest architecture and construction companies, has chosen Viet Nam to base its subsidiary, named Kume Design Asia.

At a ceremony to open Kume Design Asia in Ho Chi Minh City on March 18th, the General Director of Kume Sekkei Yukio Yamada said that with the opening of Kume Design Asia, Kume Sekkei has officially entered Vietnamese architectural market.

Kume Design Asia will run business in not only Viet Nam but also other countries in its neighborhood, the Middle East and North Africa as well, said the General Director.

According to him, the world economy will escape from the current economic recession in 3-4 years and Kume Design Asia will then have a chance to be a leading designer in Asia.

Founded in 1932 and based in Tokyo, Kume Sekkei has so far designed more than 6,000 projects in Japan and 40 other countries.

Kume Sekkei has marked its presence in Viet Nam with its participation in designing Can Tho university and the Japanese Embassy in Hanoi and it is now realizing a project to erect Nikko Sai Gon.

Source: vnbusiness

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Construction of two hydro-electric power plants kicked off in Gia Lai

Construction of two hydro-electric power plants, Ia Hrung and Chu Prong, has been kicked off in Ia Grang commune, Ia Grai district, Central Highlands province of Gia Lai.

Both plants have been invested by Phan Vu Electricity Construction and Investment Joint Stock Company. Ia Hrung plant has a capacity of 4.5 MW and Chu Prong, 3.7 MW. Both plants will generate 40 million kWh annually.

Total investment for the two plants is put at VND 200 billion. Construction is slated for 16 months.

Source: vnbusinessnews

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Siemens looks to join wind energy projects in Vietnam

Siemens, one of the world’s leading electrical and electronics companies, is looking to participate in wind energy projects in Viet Nam, a company executive said.

Erdal Elver, new president and chief executive officer of Siemens Viet Nam, told reporters in HCMC on Thursday that Siemens had discussed with some partners about the possibility of the company’s participation in developing such projects.


The investors in talks with Siemens over the wind energy generation projects are local and foreign companies, including one from Malaysia, Elver told the Daily after the press conference.

He said Siemens wanted to provide equipment and solutions for the projects, which are now in the stage of study. “There are studies about the possibility to set up wind farms in Vietnam… Vietnam is an excellent country for such wind farms because of its long coastline.”

Elver noted the investment in wind farms was high, but wind energy was environmentally friendly. “In the future, part of energy must be generated from such a source. Many European countries have invested in wind farms.”

Because of much investment, Elver said wind energy projects would need great support of the Government. He stressed the importance of tax incentives and plans to produce a certain percentage of energy from renewable sources.

He gave an example that the governments of Germany and China were supporting and pushing the development of wind farms, and they targeted a certain percentage of energy would be generated by winds.

Elver said it was just a matter of time for Viet Nam to invest in wind farms as it helped protect the environment and create a new source of energy.

In addition to wind energy projects, Siemens is looking for opportunities to provide equipment and solutions for power plants in the pipeline in Vietnam after years of success in this market.

Siemens Viet Nam posted total revenue of 477 million euro in fiscal 2007 and 2008. Elver said the target for 2009 and the years afterward was to grow more than double of Vietnam’s gross domestic product growth and affirm the company’s position as a leading provider of solutions for the country’s major industries including energy, manufacturing and healthcare

Source: SGT

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Largest yet thermo-electricity power plant to be built in Kien Giang Province

Relevant provincial agencies in Kien Giang Province are hurrying to work out a plan for land compensation and the clearing of the site where a thermo-electricity power plant will be constructed in the locality, according to Secretary of the Provincial Party Committee Truong Quoc Tuan.

In a press conference on March 8th, the Party Secretary said that the Kien Luong thermo-electricity power plant will be finished quickly and will be largest such plant in Vietnam to date.

Under the current design plans, the plant will cover an area of nearly 600 ha in Kien Luong District and have a total electrical generating capacity of some 4,400 MW when fully operational.

The project is being invested in by the Tan Tao Group with a total budget of over US $7 billion.

Representatives from Tan Tao said the construction work on the power plant project will be divided into three phases. The first phase will be started in 2009 and finished by 2013, while the second phase will last from 2013 to 2016, with the third phase being completed in 2020.

After the completing of the first phase of construction, the plant will have a generating capacity of some 1,200 MW of electricity.

Source: SGGP

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Japanese businesses target HCM City

A delegation of Japanese businesses met with Ho Chi Minh City authorities on March 9, expressing a desire to increase their investment in the city.

The delegation, headed by the president of the Vietnam-Japan Committee for Economic and Cultural Exchange, Masahiro Iwashita, included the representatives of businesses from eight different fields such as chemistry, energy, infrastructure and transport.

Members of the delegation had nothing but praise for HCM City’s potential for development.

For his part, the Chairman of the Municipal People’s Committee, Le Hoang Quan, said the city wants to learn from Japan’s experience in developing its infrastructure, education, culture, and arts.

He pledged that the city will create the best possible conditions for Japanese businesses to invest successfully in the southern economic hub.

Source: VNN

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Dutch group to build shopping center

Dutch property conglomerate, the EEC Group, on March 10 announced the launch of Promenada @ Canary, a massive new shopping and entertainment complex in the southern province of Binh Duong.

The 82,000sq.m complex, located in front of the Vietnam-Singapore Industrial Park in Thuan An District, some 17km from downtown HCM City, is a joint venture between ECC and Guocoland Vietnam, a real estate developer from Singapore.

ECC Group will contribute 80 percent and Guocoland the remaining 20 percent of the joint venture’s registered capital of US$33 million.

Promenada @ Canary says that it will offer an innovative mix of international and local fashion, foods and beverages, as well as leisure and entertainment services.

The project’s first phase is expected to be completed by the 3rd quarter of 2011 and the second phase, in late 2012.

Construction is scheduled to start in the second half of 2009 and will provide thousands of jobs for local workers. When completed, Promenada @ Canary will employ 3,000 local workers.

Source: VNN

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UK company delays oil projects in Vietnam

Soco International Plc of the UK announced that it will delay its oil exploitation plan at Te Giac Trang (White Rhino) field until mid 2011, one year behind schedule.

The Financial Times on March 10 quoted Ed Story, Soco’s president and CEO, saying his company has also decided to cancel its plan for exploration at Te Giac Den (Black Rhino) field.

Back in June 2008, Soco said that it would drill a new well in this field within the next 6-9 months. However, the company has now confirmed that it will not be undertaken before the first half of next year.

Analysts say Soco’s assets remain attractive to a potential buyer identified as Sinochem of China which bought Soco’s assets in Yemen worth US$465 million last year.

However, Ed Story said talks to sell assets had taken place only "sporadically", and there was "nothing definitive to discuss".

Source: VNN

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Quang Ngai calls for investment in 70 projects

The Quang Ngai Provincial People’s Committee has released a list of 70 prioritized investment projects in the 2009–2010 period.

They include 40 projects in the Dung Quất Economic Zone, 10 projects in provincial industrial parks and 20 others.

Among those conducted in Dung Quất, there are projects to produce 60,000 tons of ethyl tertiary-Butyl Ether (MtBE) per annum, 30,000 tons of formalin (used in wood sticking glue), 30,000 tons of Polystyrene (PS), 350,000 tons of black carbon, 210,000 tons of Styrene Monomer, and 50,000 tons of lubricant.

A 1,200 MW coal-fuelled thermo power plant, the Vạn Tường eco-tourist site and a trade center of the same name will be also built in the zone.

Ten projects located in industrial parks are those on production of food and fast food, food for livestock, food for shrimps, non-standard components, aluminum bars, mechanical products, cables, electrical appliances, and on building residential areas and service quarters for the Tịnh Phong industrial park.

Source: VNN

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Over VND 100 billion to upgrade section of highway 14 in Dak Nong

The upgrading of Highway 14 in Kien Duc town commenced in Dac RLap district, Dak Nong province on February 20.

The highway section is 5.3 kilometre long with a total investment capital of nearly VND 109 billion sourced from the Government’s bonds.

The upgrading work supervised by the Cuban side is scheduled to be completed in the next 18 months.

This is part of the Ho Chi Minh highway construction project.

Source: VNN

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Vietnam’s first oil refinery begins production

Viet Nam officially inaugurated its first oil refinery on Feb. 22, in what is being hailed as an important event in the country's development and energy security.

Prime Minister Nguyen Tan Dung attended the inauguration ceremony and pressed the button to launch the first flow of commercial oil of the Dung Quat oil refinery that is located in the central province of Quang Ngai.

Former National Assembly Chairman Nguyen Van An, Head of the Party Central Committee’s Commission for Inspection Nguyen Van Chi, Head of the Party Central Committee’s Commission for Mass Mobilisation Ha Thi Khiet, and Deputy PM Hoang Trung Hai, Head of the state steering committee for key oil and gas projects, were present at the ceremony among others.

Party General Secretary Nong Duc Manh also sent a basket of flowers to congratulate the event.

Addressing the function, PM Dung praised concerted efforts of officials, experts, engineers, workers, project management board and contractors to overcome a wide range of difficulties and challenges during thousands of days to bring out the Dung Quat oil refinery’s first flow of petroleum – an expectation of the whole country.

This is the first commercial oil flow produced by the nation’s first oil refinery that is equipped with technology, managed and operated by Vietnam itself, he said, adding that “it marks an important start of the oil refinery and petrochemical industry.”

The government leader went on to say that the oil refinery is a milestone and a key national project of great significance in all aspects, from politics, economy, society, national defence and security to the country’s industrialisation and modernisation, for Quang Ngai province and the whole central region.

The Dung Quat oil refinery was defined by the Vietnamese National Assembly as a key national work which needs to use advanced technologies and techniques to produce high-grade products meeting strict requirements for environmental protection.

Accordingly, with the designed capacity of refining 6.5 million tonnes of crude oil a year, the refinery is expected to meet about 30 percent of local demand for petroleum.

The oil refinery construction was undertaken by the Technip contractor group that included Technip (France), Technip (Malaysia), JGC (Japan), and Tecnicas Reunidas (Spain).

During the construction process, started in 2005, the Technip group already recruited more than 100 Vietnamese sub-contractors and suppliers of related equipment and services.

It has generated jobs for tens of thousands of local people in Quang Ngai and at peak periods employed up to 12,000 workers from other localities in Vietnam and more than 30 countries around the world.

The plant is expected to run at its full capacity in this August.

When running in full, the Dung Quat oil refinery is capable of churning out about 150,000 tonnes of petrol, 240,000 tonnes of diesel, and around 23,000 tonnes of LPG a month.

Additionally, it can also be producing over 8,000 tonnes of Propylene, 30,000 tonnes of jet fuel and around 25,000 tonnes of FO.

In total, this year the plant is expected to hit the market with about 2.6 million tonnes of oil products.

To serve the full operation, the Dung Quat refinery has since May, 2008 conducted several test runs, using 1,500 tonnes of LPG, over 50,000 tonnes of diesel, and 160,000 crude oil from the Bach Ho (White Tiger) oilfield.

More than 1,000 people have been trained to operate and manage the refinery.

Also in May, 2008, the one-member Binh Son Refinery and Petrochemical Company was established in order to manage and operate the oil refinery effectively.

The same day, the Quality and Standard Directorate handed over a quality certificate to the first petroleum flow produced by the Dung Quat oil refinery.

Source: vnbusiness

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Depreciation causes subway costs to double

The estimated costs of the Ben Thanh - Suoi Tien subway have doubled to $2.2 billion due to depreciation of Vietnamese dong.

The Ho Chi Minh City People’s Committee has instructed the Urban Railways Management Board (URMB) to discuss the costs with the Japan International Cooperation Agency.

It has also ordered the URMB to report to the ministries of Transport, and Construction about the project’s issues.

The first work on the subway system is set for this year, to be finished in 2013 and open to the public one year later.

The 19.7 kilometer line, of which 2.6 km will be underground, will run through districts 1, 2, 9 and Thu Duc District and part of Di An District, Binh Duong Province.

Source: vnbusiness

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Construction of Chon Thanh – Duc Hoa section of Ho Chi Minh highway built

The construction of the Chon Thanh – Duc Hoa section of the Ho Chi Minh highway started in Tru Van Tho commune, Ben Cat district, Binh Duong province on February 21.

According to the Project Management Unit, the section with 5 kilometres in length including the Kenh Phuoc Hoa bridge has a total investment capital of over VND 70.6 billion from the Government’s bonds.

The construction of the road section supervised by the Cuban side is scheduled to be completed in the next 18 months.

Source: vnbusiness

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PM approves renewable energy, power projects

Prime Minister Nguyen Tan Dung on Feb. 6 gave the nod for a 205 million USD project to develop renewable energy and upgrade networks supplying power to remote areas around the country.

The “Renewable energy development and electric grid upgrade and expansion in remote communes” programme is being funded by the Asian Development Bank.

According to the energy sector, Vietnam has everything required to develop renewable energies from solar, wind, geothermal and, especially, hydro-power sources.

With nine major river systems, it is considered one of 14 top countries in terms of hydropower potential.

But it has failed to make full use of this potential, largely due to the relatively high costs and technology issues.

The country has 500 small hydropower stations with a combined output of 135 MW.

On the same day, Dung also approved a loan agreement for the “Partnership for the poor in agro-forestry development in northern Bac Kan province” project funded by the International Fund for Agriculture Development.

The Minister of Finance will soon sign the agreement.

Earlier, the PM ratified the 600,000 USD “Increasing social auditing capacity of the socio-economic development plan 2006-10” project sponsored by the United Nations Children’s Fund.

Source:VietNamNet/VNA

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Dung Quat Oil Refinery begins operations

On February 9th, the Dung Quat Refinery in the Central Province of Quang Ngai officially began became operational.

The crude oil distillation tower in the CDU atmospheric pressure unit, one of the most important units of the Dung Quat refinery, has started refining around 900,000 tons of crude oil, reaching 60 percent of its total processing capacity. A crew of more than 700 foreign experts and Vietnamese engineers are always on duty to ensure optimal operations of the refinery.

After the 24 hours of operation, the refinery was operating safely, without any problems. Mr Venkateban, a supervisor from the Technip Company excitedly said: “I believe that we will produce the first oil products very soon, in a few days”

The foreign experts and the Vietnamese engineers are slowly and gradually increasing the flow of petroleum into the refinery and distiling the two first commercial products, namely diesel and kerosene fuels. As scheduled, the quality of the two products will be tested in coming days before being entering the supply chain. Nguyen Hoai Giang, Vice Manager of the Project said: “The first commercial products are expected to become available by the end of this week.”

The Dung Quat Refinery also plans to produce several other distiled petroleum products such as A90, A92, A95 petrol and aviation fuel by April, 2009. The refinery will bring all 14 units into operation by the end of June, 2009.

All construction and assemble work have been completed, and after 44 months of constructing the Dung Quat Refinery Plant was finished ahead of the deadline of February 25th, 2009.

The first distil petroleum products will enter the supply chain on February 22nd, 2009.

Source: VietNamNet/TN

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Vietnam may allow private investments in telecom infrastructure

Viet Nam may allow private companies to invest in developing telecommunications infrastructure, Deputy Minister of Information and Communications Le Nam Thang said.

The government will seek final approval for a draft regulation from the National Assembly, which is scheduled to meet in May, Thang said in a telephone interview from Hanoi Thursday.

Vietnam’s private companies may not be interested in the market as the spending may be high with rates of return lower than other service-based businesses, said Nguyen Thanh Ha, a Hanoi-based consultant with Vietbid, a company that advises on investments in telecommunications projects.

Viet Nam has delayed the entry of private companies in developing telecommunications infrastructure on concern security will be compromised and foreign providers will edge out domestic operators, Ha said.

Source: Bloomberg

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Foreign investment in HCM City increases sharply

The foreign direct investment (FDI) in HCM City increased sharply in 2008, with more than 680 newly-licensed and increased capital projects worth nearly US$8.7 billion, up over 3.3 times compared to 2007.

According to the Ho Chi Minh City Committee for Overseas Vietnamese Affairs, 480 enterprises owned by overseas Vietnamese were established in 2008 with a combined investment capital of around VND2,000 billion.

Currently, the total number of valid FDI projects in HCM City is more than 3,140 with a total registered capital of US$25.68 billion.

Source: vnbusinessnews

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Dung Quat EZ aims to lure more investment

The Dung Quat Economic Zone (EZ) in the central province of Quang Ngai is expected to attract between VND4,000-5,000 billion in 2009.

To achieve the goal, the economic zone will focus on developing infrastructure, simplifying administrative procedures and accelerating land acquisition and compensation.

So far, the EZ has 153 projects, including 44 on-going projects, with total registered investment of more than US$10 billion.

In 2008, the EZ’s industrial value reached over VND2,600 billion, contributing more than VND700 billion to the State budget and accounting for 50 percent of Quang Ngai’s total budget collection.

Source: vnbusinessnews

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Central Highlands flex economic muscle, natural resources might

The Central Highlands region is capitalising on its hydro-electric resources and border economic zones to become a dynamic economic hub.

It has five provinces – Gia Lai, Dak-Lak, Kon Tum, Dak Nong, and Lam Dong – that share borders with Laos and Cambodia.

They have managed to effectively tap their economic potential to benefit residents, including millions of ethnic minority people.

Blessed with a network of rivers and streams, the region has enormous hydro-power potential.

It plans to harness its major rivers – Se San, Poco, and Serepok that flow into the Mekong River, and Dong Nai and Song Ba Rivers into the East Sea – to build power plants with investment from both domestic and foreign sources.

Dozens of large hydro-power projects have already received approval from the Government. They are expected to generate 5,000 MW by 2010, accounting for 30 per cent of the country’s total output.

On the Se San River alone, seven power projects with a total capacity of 2,000 MW have either been built or are being built.

Of them, the 720 MW Ia Ly project, 270 MW Sesan 3, 108 MW Se San 3A, and 270 MW SeSan 4 in Gia Lai Province are already operational.

The three others are under construction in Kon Tum Province now.

On the Serepok River in Dak Lak Province, six plants will be built with a total capacity of 750 MW.

On the Ba River, 10 will be built with a capacity of 669 MW.

The region is also focused on developing small and medium-sized plants with domestic investment.

In Gia Lai Province, more than 30 with a total capacity of 200 MW have been built, with 83 others in the pipeline.

Dak Lak Province has identified more than 100 convenient locations for building the small and medium-sized plants.

Border trade

To promote trade, the Gia Lai and Kon Tum authorities have established two border economic zones with Laos and Cambodia.

The Le Thanh border economic zone in Gia Lai has become a trade and economic hub for not only the province but also for the entire region.

There are now plans to build a trading centre at a cost of hundreds of billions of dong and infrastructure like roads, business complexes, and a 600-ha resettlement area.

Kon Tum’s 71,000ha Bo Y border economic zone has become a vital economic triangle between Laos, Cambodia, and Viet Nam.

It has a major trade centre, a large supermarket, and road network.

In just three years since being built, the zone has attracted 52 projects with a total investment of thousands of billions of dong.

Planned projects include a US$1.5 billion international airport, a $1 billion urban centre, an $800 million entertainment and hotel complex, and a $500 million power plant.—

(Source: Viet Nam News)

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It’s all systems go for Vietnam’s first oil refinery

With its glittering bright lights and surrounded by pine forests that whistle in the dark night, Dung Quat Oil Refinery in the central province of Quang Ngai looks like a small but beautiful city.

It is Vietnam’s first oil refinery and has a capacity of 6.5 million tons of crude oil a year initially. It hopes to increase this to 10 million tons in a few years.

SGGP spoke to the deputy director of the Vietnam Petrol and Oil Group (PetroVietnam), Truong Van Tuyen, about how the plant took shape.

Reeling off figures without referring to any notes, he said the factory began its trial run on July 25. Up to now, most technical processes have been tested thoroughly.

Around 52,500 tons of diesel have been processed during the test run and the refinery’s readiness has been estimated at 99 percent.

Tuyen agreed to let the media visit the plant but said “you should come in the evening and also visit Cay Sau hill, which will be used as a vantage point to view the factory.”

Cay Sau hill is not too high but with a seven-kilometer road still under construction, conditions very muddy and difficult. At the top of the hill flies the national flag.

From the top, the refinery looked a picture in the afternoon sunlight. We could see a crude oil tank that can contain 390,000 cubic meters (around 210,000 tons) and the actual refinery with its huge distilling towers where petrol products, LPG, and propylene are produced.

To build this giant refinery, there were sometimes 15,000 people and 500 foreign experts, working.

The engineers and workers who built it would surely do better when they work on future refinery projects, he said.

On November 30 it received its first batch of 80,000 tons of crude oil from Bach Ho (white tiger) oil field for a test run.

Tuyen said 25 days after Tet, the first Vietnamese-made petroleum products will come to the market.

VietNamNet/SGGP

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Over 280b dong to upgrade National Road 20

Viet Nam Road Department yesterday started work on upgrading the National Road 20 linking Lam Dong highland province with HCM City and south-eastern provinces, with a total investment capital of over 280 billion dong under BOT (Building-Operating-Transferring).

The project will have three bidding packages. The road is 18 kilometres long.

The construction time is estimated to be 24 months. Investors are allowed to collect refund fee within eight months from the work being out into operation.

Source: vnbusinessnews

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Government approves proposals for international seaports

Deputy Prime Minister Hoang Trung Hai has recently approved proposals from relevant authorities and investors related to speeding up the rate of building international seaports.

To speed up the building of the $200 million Van Phong International Transit Port in Khanh Hoa province, deputy Prime Minster Hoang Trung Hai approved the Ministry of Transport proposal to authorize Vietnam National Shipping Lines to make direct decisions on related issues in future.

Mr. Hai has also allowed Vietnam National Shipping Lines to calculate the total amount of investment capital needed for the project and then outline schemes to mobilize sufficient funds for it.

Regarding the choice of contractors for tendering, especially those for building the first two wharfs, Mr. Hai has requested the Ministry of Transport to call for prestigious and experienced foreign investors that have enough financial capability to join the project.

When completed, Van Phong will be one of the largest ports in Asia, which can receive container ships of up to 10,000 -12,000 tons.

Mr. Hai has also assigned the Ministry of Industry and Trade to approve the site where the 2,640 MW Van Phong Thermo power plant will be built in Khanh Hoa province.

The project will cost $3.8 billion and is scheduled to be commercially operational by the end of 2014 and be completed 2015.

For the Hai Phong International Gateway Port, Mr. Hai has approved relevant authorities’ proposal that $8 million be used for the upgrading the port’s facilities to make it ready for the task of calling for ODA (Overseas Development Assistance) for the second phase of building.

Located in Cat Hai District, in the north of Hai Phong City, the 472 hectare port is worth over $435 million. It has a total berth length of 3,200 meters for vessels with a capacity of 80,000 DWT. The port’s cargo capacity is 35m tons a year.

Source: Sai Gon GP

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Vietnam completes construction of first dredger

The Ben Kien Shipbuilding Industry Company launched a 2,800 cu.m dredger on January 12, the first vessel of its kind to be built in Vietnam .

At 80m long and 15m wide, the ‘Elbe’, ordered by the Netherlands ’ Bagger Bedriif Deboer Holdings Company, is fitted with state-of-the-art machinery, enabling it to dredge silt-laden riverbeds or the seafloor to a maximum depth of 28m.

The company has previously constructed six container ships for its partners in the Netherlands.

Source: VNA

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BP to supply crude oil for Dung Quat refinery

The oil giant, British Petroleum, is to supply crude oil to Dung Quat, Vietnam ’s first oil refinery, in accordance with a contract signed in Hanoi on Jan 12 by the British company and Vietnam ’s PV Oil and BSR firms.

PV Oil is responsible for negotiating with BP over the purchase of crude oil, which will gradually replace the supply of crude from Vietnam ’s Bach Ho (White Tiger) oil field, whose output is expected to decrease in the future.

Dung Quat refinery, which is to commence operations on Feb 25, is designed to process 3.5 million tonnes of oil during 2009, or 70-75 barrels per day. Its annual capacity is set to increase to 6.5 million tonnes, equivalent to 100-145 barrels per day in subsequent years.

Once fully operational, the refinery will meet 30 percent of domestic demand. Vietnam currently imports 13 million tonnes of petro and oil per year.

Source: VNA

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Hau Giang mulls 11 million EUR sewage treatment system

The Mekong Delta province of Hau Giang has submitted to Government for approval a 11 million EUR project to build a drainage and sewage treatment system in its town of Vi Thanh .

If approved, the project will be launched in the first quarter of this year and completed in January 2012.

Once operational, it will have a capacity of 8,000 cubic metres per day.

Source: VNA

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Piling work begins at new seaport

Piling work started yesterday for the 33.7-ha Sai Gon International Terminals Vietnam Project in Phu My 1 Industrial Park, marking the most important process of the port construction by the China Harbour Engineering Company (CHEC).

“This is the most important phase of the project so we use the 46m concrete piles which have no joints, the longest ones for Vietnam ’s projects in water,” said project director Luo Wen.

CHEC is the general contractor of the port’s three construction packages totally valued at more than 163 million USD.

The container and general cargo port project is expected to begin operation in 2011 when it will house three 730 metre wharves capable of handling ships of up to 60,000 tonnes.

The Sai Gon International Terminals Vietnam (SITV) is a joint project between Hutchison Ports Mekong Investment SARL, an affiliate of the Hong Kong – based Hutchison Port Holdings group and Sai Gon Investment, Construction and Trade Company.

The SITV is in accordance with the Government’s planning of the seaport group in the area of Ho Chi Minh City and Dong Nai and Ba Ria-Vung Tau provinces toward 2020.

Source: VNA

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PetroVietnam develops clean energy project

The Vietnam National Oil and Gas Group (PetroVietnam), in cooperation with China ’s XinAo Group, is considering a 700-million-USD project to produce clean energy in Thanh Hoa province’s Nghi Son district.

The project will include a storage system and port for receiving liquefied natural gas (LNG) and a distribution system with an annual capacity of 3 million tonnes, which will be increased to 6 million tonnes in the future.

The project will also produce dymethyl ether (DME) that will be mixed with liquefied petroleum gas (LPG) to provide lower-cost LPG.

The Chinese partner will contribute 55 percent of the project which will have initial total capital of 30 million USD.

Source: VNA

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Taiwan leads foreign investors in Vietnam

With 1,940 valid investment projects, worth a total of 19.65 billion USD, Taiwan tops the list of 84 countries and territories investing in Vietnam , since the promulgation of the Foreign Investment Law in 1988.

Three quarters of Taiwanese projects are in industry and construction, numbering 1,460 projects valued at 16.2 billion USD, representing 75. The remaining mainly involve in services, agriculture, forestry and fisheries.

Taiwanese have invested in 55 provinces and cities across the country, but a majority concentrate in Dong Nai, HCM City, Binh Duong, Hai Phong, Long An, Ninh Binh, Vinh Phuc, Hai Duong and Ba Ria-Vung Tau.

According to the Foreign Investment Department, Taiwanese investment projects mainly used high technologies and state-of-the-art equipment, especially those involving in motorbike assembly, production of cement, sodium glutamate, synthetic fiber and electronic parts, farming technology, aquatic products farming and processing.

Source: VNA

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Foreign investors called for investing in Van Phong Port

Deputy Prime Minister Hoang Trung Hai has instructed the Ministry of Transport to design a plan to call for foreign investors to invest in the construction of the Van Phong International Entreport.

According to the Government Office, the Ministry of Planning and Investment, Ministry of Finance, the Van Phong Economic Zone Management Board and related agencies will join hands to develop this plan.

The Deputy PM asked the Vietnam Shipping Lines Group, Vinalines, to raise capital and develop this project. He also requested the project developer to choose capable conductors for the project’s bidding contracts.

The groundbreaking ceremony of the Van Phong International Container Entreport, which was scheduled in early 2008, was canceled after the local government of Khanh Hoa province proposed a huge steel project invested by Posco, a South Korean group in this area.

This project was protested by experts and the people for the worry of possible environmental pollution caused by this steel plant.

On October 31, 2008, Prime Minister Nguyen Tan Dung refused this project, which is worth nearly US $10 billion, saying that the project may affect the future development of the Van Phong International Container Entreport and harm the environment.

Source: VNN

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Malaysia’s Janakuasa to build $1.5 bln Vietnam power plant

Vietnam has awarded a US$1.5 billion contract to build a coal-fired power plant to Janakuasa Sdn., a Malaysian power generator, in the Mekong Delta province of Tra Vinh, a government official said Tuesday.

“The plant, part of a group of three plants in the province, is under the government’s master plan to ease the power shortage in the country,” Pham Van Chieu, chief administrator of the provincial People’s Committee, said by phone from the province, about 200 kilometers from Ho Chi Minh City.

The 641-hectare Duyen Hai power complex consists of three coal-fired plants with a total investment of about $5 billion and a combined capacity of 4,400 megawatts, according to the plan posted on the Tra Vinh Department of Planning and Investment website.

Duyen Hai 1 plant will be built by Electricity of Vietnam, the state-owned utility, Chieu said. Janakuasa will construct Duyen Hai 2 and a contract has still to be awarded for Duyen Hai 3, he said.

Construction of Duyen Hai 2 is scheduled to start in 2011 and will be completed by 2015, according to Chieu.

“Electricity generation from these plants will supply the national power grid,” Chieu said. “For Duyen Hai 2, the government, Electricity of Vietnam and Janakuasa will work out the sale price, as there are no details about the price yet.”

Source: Bloomberg

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Can Tho air terminal inaugurated

A plane carrying Prime Minister Nguyen Tan Dung and other Government leaders touched down a runway of the newly-built Can Tho air terminal at 10.30am on January 4, kick-starting a new air route between Hanoi and Can Tho city in the Mekong Delta region.

After three years of construction, the first phase of the terminal has been completed, with a 2,400m-long and 45m-wide runway capable of receiving big aircraft such as Airbus 320 & 321 and Boeing 737. With a total floor area of 2,400sq.m., the terminal can serve 400 passengers per hour and 400,000 passengers per year. Its ground control facilities meet international standards.

At the inauguration ceremony, Prime Minister Nguyen Tan Dung praised the Southern Airports Corporation, Can Tho City and the construction workers for their great efforts to put the terminal into operation. He encouraged investors and contractors to continue with the second phase of the project to ensure that Can Tho International Airport will be completed and operational in 2010 as scheduled.

He asked Can Tho city to fully exploit the airport to develop its economy and serve as a gateway to other regions in the country as well as the world.

Once completed in 2010, the terminal will launch flights to Singapore, Thailand and Cambodia in Southeast Asia and Japan, Hong Kong and Taiwan in Northeast Asia.
Source: VOV

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PM approves cash for new airport

Prime Minister Nguyen Tan Dung has approved loans for a new airport terminal in Ha Noi and a new airport in the southern province of Dong Nai.

He said Ha Noi's Noi Bai Airport would receive 50% of its capital to build the four-storey T2 Terminal from the Viet Nam Development Bank and the remaining capital from commercial banks.

Lend funds

The State Bank of Viet Nam will ask State-owned commercial banks to lend funds to the project and the transport ministry will develop a management framework to ensure full return on the investment.

The T2 Terminal, with a total floor surface of 90,000sq.m, includes an aircraft parking area, a fuelling system, a multi-storey car parking building and an internal system of roads and passing bridges.

The project, worth around US$35 million, is due to be completed on the occasion of Ha Noi's 1,000th anniversary celebration in October 2010.

The PM said the new Long Thanh International Airport in Dong Nai Province would receive 70 per cent of its capital from the State-owned stakeholders and the remaining 30 per cent from strategic foreign partners as well as other stakeholders.

With its possession rate of 11%, the Bank of Investment and Development of Viet Nam is in charge of defining the distribution of each founding stakeholder's contributions. The bank will also help implement the first stage of the project.

The authorities of Dong Nai Province government have been tasked to find land to relocate the displaced population that must move to make way for the airport, and in addition, assess the levels of compensation for residents.

Long Thanh International Airport will span an area of 5,000ha in Dong Nai's Long Thanh District with a total investment of US$8 billion.

The airport is expected to be competitive with other airports in the region.
Source: VNS

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Vietnam Railway tracks ahead

Viet Nam Railway is to build an express railway to cut travel times between Saigon and Hanoi to only 6 hours. Officials hope to realize the project by 2035.

The big dream of Viet Nam railway

Opened October 1936, the North-South Railway has seen various changes over its lifetime. It was damaged extensively by bombs from the two wars brought by France and America. Innumerous railway employees risked their lives to repair the damage.

The moment the country was reunited and regained independence finally meant peace for the railway. Employees have continuously upgraded the railway and trains to reduce travel times between Saigon and Hanoi from 42 hours to 40, 36 and now to 29. However, the dream of rail officials does not stop there.

A railway transport development strategy for 2020 with a vision to 2050, approved by the Prime Minister on November 20, is expected to develop a modern, rapid and sustainable railway transport system. It will have ten stops over 1,630km: Ngoc Hoi, Thanh Hoa, Vinh, Dong Hoi, Hue, Da Nang, Dieu Tri, Nha Trang, Phan Thiet and An Binh. The project will cost $33 billion, of which $23.1 billion will come from the government to build infrastructure and $9.9 billion from Vietnam Railways to purchase land and set up facilities.

The North-South Express Railway will be built alongside the current track and will be open to the public.

$2 billion initial funding

Vietnam-Japan Consulting Joint Venture (VJC) estimates $2 billion will be needed to clear the ground for installing the railway. The express railway will require 4,261 hectares of land, about 70% is agricultural and forests, 20% is rural and 10% urban. The project will require the removal of 10,000 houses and relocation of 7,000 farmers.

VJC reports that if the plan stays on schedule travel times in 2020 will be Hanoi – Vinh (1 hour and 24 minutes) and Saigon – Nha Trang (90 mminutes). By 2030 these will include Hanoi – Da Nang (3 hours) and Hanoi – Saigon (5 hours 30 minutes to 6 hours and 30 minutes).

The train fare is expected to equal that of air fares.
Source: Sai Gon GP

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Oil-field province appealing to foreign investors

The southern oil-field province of Ba Ria-Vung Tau has unveiled a plan of establishing two more industrial parks (IP) to meet an increasing demand from investors, both domestic and international.

The provincial IP Management Board said 40 projects capitalised at over 4,642 million USD were licensed for operation in 12 IPs throughout the province last year.

Of these projects, 21 have involved foreign direct investments with a combined capital of 4.285 million USD and 19 others were domestic investment projects capitalized at some 357 million USD.

The figures represented a two-fold increase over the yearly plan in the number of newly-licensed projects and 15.47 times over 2007 in the volume of investments.

In addition, 30 operational projects have registered to increase their investments by almost 344 million USD.

In short, by the end of 2008, Ba Ria-Vung Tau province boasts 194 valid projects with a total registered capital of almost 11.45 billion USD, including 96 FDI projects capitalised at 8,352 million USD.

Last year saw three new IPs put into operation, expanding the provincial IP territory by more than 3,000 ha, said the management board.

Source: VNA

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Bien Hoa-Vung Tau Expressway Development JSC debuts

The Bien Hoa-Vung Tau Expressway Development Joint Stock Company (BVEC) made its official debut in Ho Chi Minh City on December 23.

Vietnam Urban and Industrial Zone Development Investment Corporation (IDICO), Song Da Construction Corporation and the Bank for Investment and Development of Vietnam (BIDV) are the three founding shareholders of the company.

Of the company's total charter capital of VND 1.75 trillion, IDICO contributes 49%, Song Da Construction Corporation, 30% and BIDV, 10%.

The company is established to carry out the project to expand National Highway No 51 and another project to build the Bien Hoa-Vung Tau Expressway under the BOT (Build-Operate-Transfer) model.

The Bien Hoa-Vung Tau Expressway is 35 metres wide with six lanes. It runs in parallel with the expanded National Highway No 51. Total investment for the project is put at VND 15 trillion.

Source: VNA

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Chinese province wants to promote economic ties with Vietnam

China’s southwestern province of Sichuan wishes to further develop economic, commercial and investment relations with Vietnam, said Huang Xiaoxiang Vice-Governor of Sichuan province at a seminar to explore opportunities for cooperation between Vietnam and China in Hanoi on December 25.

Located in the centre of China’s southwest region, Sichuan will provide a number of favourable trade and commerce opportunities for both foreign and Vietnamese businesses.

Economic relations between Vietnam and Sichuan have been constantly strengthened with two-way trade turnover increasing by 111 percent in 2007 and over 35 percent in the first 10 months of 2008.

Many of Sichuan’s businesses have invested in Vietnam. Over US$476 million was put into a thermal power plant in Hai Phong and another US$230 million into another plant in Uong Bi.

The provincial authorities have drawn up a plan to expand the system of roads and rail transport between Thanh Do town and Kunming, Yunnan province, China, to facilitate cross-border goods exchange with Vietnam.

In addition, conferences are regularly held to introduce Vietnam’s economic achievements and investment policies and encourage the Sichuan business community to invest in the country.

Source: VNA

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PetroVietnam, Can Tho target comprehensive cooperation

The Vietnam National Oil and Gas Group (PetroVietnam) is planning to build fertiliser warehouses and a network of distribution in the Mekong Delta city of Can Tho .

The scheme is part of a comprehensive cooperation deal signed between the group and Can Tho city on Dec. 28.

PetroVietnam will consider the construction of office buildings, finance and insurance centres and residential areas in Can Tho - the second largest city in the Mekong Delta region.

In addition, the group will help Can Tho seek other investors both at home and abroad to engage in the city’s development projects.

PetroVietnam previously inaugurated a liquefied gas depot – the largest of its kind in the region - and a nitrogenous fertiliser storage facility at the city’s Tra Noc 2 industrial zone.

Source: VOV,VNA

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Up to 49% of oil refinery stocks to be sold

The Vietnam National Oil and Gas Group (PetroVietnam) announced, at a press conference on Tuesday, that it will sell up to 49% of its shares in the Dung Quat Oil Refinery to foreign partners.

PetroVietnam said stock sales will be conducted after the construction of the oil refinery is completed and its value is re-defined, based on the principle of giving priority to foreign investors that are ready and willing to supply crude oil to those plants on a long-term basis.

PetroVietnam said next week, PVN and its partner, BP, will sign a contract under which BP will provide combined oil to the Dung Quat Oil Refinery to replace at least 50% of the volume of crude oil supplied by the White Tiger oil field. However, PetroVietnam will define the specific volume of the alternative combined oil based on the prices and quality of this product.

Currently, the price for White Tiger oil field’s crude oil is more expensive than other kinds of crude oil. On the other hand, the crude oil output from this oil field tends to fall, so the use of alternative combined oil is expected to be more economical.

Dung Quat is the country’s first oil refinery, currently being built in the central province of Quang Ngai, and scheduled for completion in February 2009. Besides Dung Quat, PetroVietnam has plans to build two other oil refineries.

One of these two, with an estimated output capacity of 200,000 barrels a day and investment capital of $6 billion, is to be built in the central province of Thanh Hoa, in a joint venture with the Kuwait international oil and gas group and the Idemitsu Kosan group of Japan.

The other, also with a production capacity of 200,000 barrels a day, is scheduled to be built in the southern region, the country’s largest consumer centre. The project is still at the discussion stage with foreign partners, including the Venezuelan National Oil and Gas Group.

Despite being the third-largest producer of crude oil in Southeast Asia, with an average output of 300,000 barrels a day, Vietnam still has to import petroleum due to a lack of oil refineries. According to PetroVietnam, the country will need to buy approximately 26.5 tons of crude oil to supply the three refineries when they are operational.

Once operational, these three oil refineries will help the country to reduce its import and trade deficit.

Source: TTXVN

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Pha Rung Shipyard builds oil tanker

The Pha Rung Shipyard , a subsidiary of the Vietnam Shipbuilding Industry Corporation (Vinashin), handed over a chemical-oil tanker of 6,500 DWT to Fortune Marine of the Republic of Korea on Dec. 30.

The 110m-long and 18.2m-wide tanker is the fifth of the kind that Pha Rung has built for foreign partners.

The oil-chemical tanker with the speed of 13 knots was designed by Asia Ship Design and Consultants Co. , Ltd (ASDEC). It has Korea Register Class for unrestricted zone of operation.

Pha Rung Shipyard is also working on one more chemical-oil tanker of 13,000 DWT in line with its strategy to build specialised ships for both domestic use and export.

Source: VNA

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SCIC, PetroVietnam boost comprehensive cooperation

The State Capital Investment Corp. (SCIC) and the Vietnam Oil and Gas Group (PetroVienam) signed an agreement on comprehensive cooperation in Hanoi on December 30.

Under the agreement, the two sides will jointly own at least 51 percent of investment capital in oil and gas projects.

SCIC will cooperate with PetroVietnam in exploring and exploiting oil and gas abroad. It will be responsible for seeking strategic partners and potential domestic and foreign financial institutions for the implementation of the projects.

The projects that the two sides will jointly implement include the Dung Quat, Nghi Son and Long Son Oil Refinery Plants and the Ca Mau Fertiliser Plant.

Source: VNA

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