Steel mill project licensed

A Taiwanese-Japanese joint venture project to build a US$1.15 billion steel mill in southern Ba Ria-Vung Tau Province was licensed yesterday.

The steel mill will be built on 109 ha in the My Xuan A2 Industrial Zone. Several investors are funding the project, including the China Steel Group from Taiwan, but Sumitomo Metal Industries and the Sumitomo Corporation from Japan are the majority partners.

Once operational in 2013, the steel mill is expected to produce 1.6 million tonnes of steel products annually, including steel plates, hot- and cold-rolled steel, as well as steel coils to service the ship-building industry. It will also supply the mechanical engineering, automobile and electricity/electronics industries and is expected to employ around 1,000 local workers.

The China Steel Sumikin Viet Nam Company is currently the provinces largest steel project, followed by a $1.12 billion project invested in by the Posco Group from the Republic of Korea.

Viet Nam, Saudi Arabia talk food-for-oil deal

Saudi Arabia has agreed to help Viet Nam ensure its energy supplies in a time of high demand. Viet Nam, in turn, will help secure food security in Saudi Arabia.

This was announced at a meeting of experts from both sides in Ha Noi yesterday.

Efforts already made between Viet Nam and Saudi Arabia indicated there was room for more dynamic co-operation in trade and investment between the two countries, said Minister of Industry and Trade Vu Huy Hoang yesterday.

Speaking at a reception for the Saudi Minister of Petroleum and Mineral Resources, Ali Ibrahim Al Naimi, Hoang said this could include co-operation in oil, gas and minerals.

“Saudi Arabia has many experiences in the development of energy and stands ready to become a long-term partner with Viet Nam,” Hoang said.

Hoang asked the Arabian kingdom to recognise that Viet Nam now had a full market economy. He suggested an early start for negotiations on investment and transport co-operation – and pushed for more exchanges of delegations.

He also outlined ideas to help enterprises explore for oil and gas and build refineries.

The Saudi minister said his country also wanted to explore co-operation in developing infrastructure – and in engineering, civil construction and energy.

US firm to manage luxury resorts in Da Nang, Da Lat

The Sai Gon Invest Group has hired a US-based company to manage two five-star resorts it plans in Da Nang and Da Lat, with the two parties signing a tetter of intent in HCM City yesterday.

Once the final agreement is completed at the end of this year, Starwood Hotels Resorts Worldwide Inc will take over the Le Meridien Da Nang Resort Spa and Sheraton Da Lat Resort at the construction stage.

Kinh Bac Urban Development Corporation, a unit of SGI, will invest US$100 million to build the Le Meridien Da Nang Resort Spa on an 8.4-hectare site and another $40 million for the Sheraton Da Lat Resort in downtown Da Lat.

“Construction is planned to begin next year and the two properties will be ready by 2013, when the financial crisis would have blown over,” Dang Thi Hoang Phuong, chief executive officer of SGI, said at the signing ceremony.

“Starwood is interested in the two luxury resorts because Viet Nam is a promising tourism place,” said Matthew Fry, senior vice president of Starwood Asia Pacific Hotels Resort.

Starwood manages 940 hotels in 97 nations around the world, employing 145,000 people. In Viet Nam, it manages Sheraton hotels in Ha Noi and HCM City. The SGI owns 20 industrial and high-tech parks built at a cost of more than $2 billion, and three resorts in Binh Thuan province, Da Lat, and Da Nang.

Ground services firm wins airports award

The International Air Transport Association (IATA) has recognised the outstanding achievements of the Viet Nam Air Navigation Services Corporation, the Civil Aviation Authority of Singapore, Geneva International Airport and Malaysia Airports Holdings Berhad by giving out their prestigious Eagle Awards.

The Eagle Awards honour air navigation service providers (ANSPs) and airports for outstanding performance in customer satisfaction, cost efficiency and continuous improvement. Awards are granted based on the recommendations of the independent Eagle Awards Panel.

“Eagle Awards are highly-valued recognitions of airports and ANSPs. All parts of the aviation value chain must play their part in meeting the intense challenges of this economic crisis,” said Kotaite. He noted that the panel paid special attention not only to good performance, but also to proactive responses to the economic downturn.

“All four winners today have gone beyond the strict and challenging criteria of the Eagle Awards for high service standards and cost efficiency. They have also responded effectively and innovatively to the needs of their airline customers at this time of unprecedented financial turmoil. They put the customer first and delivered value for money. The industry partners are role models for all infrastructure providers,” said Giovanni Bisignani, IATAs director general and CEO.

The Viet Nam Air Navigation Services Corporation (VANSCORP) received the award “Most Improved ANSP”. It was credited for investing in modern technology in line with the ICAO Roadmap for Air Traffic Communication, Navigation and Surveillance.

“VANSCORP has improved greatly in its 15-year history and is characterised by a strong culture of reliability, efficiency and customer orientation. In addition to maintaining strong relationship with its airline customers, VANSCORP also takes an active role in regional initiatives,” said Bisignani.

Air, sea services get zero VAT

The Ministry of Finance is to scrap value added tax from next month on aviation and maritime services.

The new rate will replace the current one of between 5-10 per cent on ticket prices, airport ground services, transport contracts on international route and freight handling.

The Viet Nam Aviation Department said the tax exemption would help to offset additional costs incurred by airlines and passengers during the global economic crisis and higher fuel prices.

Domestic carriers have sustained huge losses since the crisis began that have been only slightly alleviated by the Governments decision to allow airlines to set their own prices.

Vietnam Airlines, the national-flag carrier, has made little profit despite introducing cost-saving measures.

Airlines are hoping to make further cost savings when four new air routes open next month, allowing them to cut flying times and save fuel.

The aviation authority estimates that with the four new routes, carriers could potentially save about 28 flying minutes, equivalent to US$11,200 flying up and down the country.

Tighter controls put on overseas bonds

A new Government decree issued last week puts stricer requirements on the issuance of State and corporate bonds on international capital markets.

Under Decree No 53/2009/ND-CP, bonds can be issued overseas only to raise capital for key national projects with demonstrable effectiveness and capacity to repay borrowed funds.

But the decree also recognises the right of Vietnamese enterprises, in addition to the Government, to directly issue bonds on the international market on the principles of freedom of contract and corporate responsibility for the effective use of borrowed capital.

Nevertheless, corporate bond issues must meet certain lawful requirements under the decree, including approval by the enterprises board of management and by the Government prior to being offered on a foreign capital market. The bonds should also meet the credit rating standards, if any, set by the foreign market.

The total value of the overseas bond issue must also fall within the overall annual cap on commercial loans from overseas lenders, as ratified by the Prime Minister.

If guaranteed by the Government, a corporate bond issue on a foreign market must total at least US$100 million.

The decree also stipulates that a Government bond issue on a foreign market must total at least $500 million, with the Ministry of Finance responsible for any plans to issue bonds overseas.

Recognising that some Government bonds are issued to raise funds for enterprises to borrow, the decree also provides that enterprises seeking to borrow from bond proceeds must apply to the Ministry of Finance and supply full documentation about the project, including repayment plans.

The new decree takes effect on July 30.

Coffee maker starts $40m plant

Coffee producer and cafe chain Trung Nguyen today begins construction for a processing factory in the Central Highland province of Dak Lak.

The US$40 million plant, designed by Spains LQC Architecture, is expected to begin operation in 18 months time when it will roast, grind and package 60,000 tonnes of coffee a year using technology from German company Verfahrenstechnik GmbH.

Trung Nguyen said it had plans to improve coffee quality, give a boost to the Vietnamese coffee brand name in general and its own, and help increase the countrys coffee export, now worth $1.9 billion.

Export of coffee beans now totals 900,000 tonnes but is expected to diminish, giving way to processed products.

The company has been setting up a fund to support sustainable coffee planting, providing VND15 billion ($8.3 million) annually.

Next week, Trung Nguyen and the Ministry of Foreign Affairs will organise a “Viet Nam Coffee Culture Night” in Ha Noi, which will be attended by diplomats and cultural researchers.

PV