Vietnam Overseas

Dreams of buying a home with a bank loan is still beyond reach for the majority of the population due to income requirements.  Bank loans to buy a home in installments come with interest rates of between 1.11 and 1.15 per cent per month with a payment maturity period of 10 years.  Few people can obtain a 1.11 per cent interest rate due to the stringent requirements. 

A representative of the Sai Gon Thuong Tin Joint Stock Bank (Sacombank) branch in the Go Vap District, said the bank grants an interest rate of 1.11 per cent and a maturity period of 15 years to people who want to borrow a sum equivalent to 70 per cent of the house’s value.  Borrowers are also required to have an average income of between VND20 and 30 million per month since only with that income can they pay both the principal and the month interest. 

Nguyen Ngoc Tinh, a worker from a HCMC-based garment company, said that he wanted to borrow VND200 million at a monthly interest rate of 1.1 per cent to buy an apartment.  However, his monthly salary is only VND4 million per month, far short of the required VND20 million. — VNS (Posted July 23, 2007)

Viet Nam has never had so many paper and pulp production projects.  Foreign and domestic investments in the paper industry have increased dramatically due to higher demand and paper prices on both the overseas and domestic markets, experts said. Compared with 2001, the world price of pulp has increased by nearly 70 per cent.  According to the Ministry of Industry, new foreign-invested paper projects including those under feasibility study have a combined production capacity of about one million tonnes of pulp and nearly 600,000 tonnes of paper per year. 

The licensed projects include two of Hong Kong’s LEE&Man Paper Manufacturing Ltd, with capacities of 350,000 tonnes of paper and 150,000 tonnes of pulp per year in Hau Giang Province, and Vina Kraft of Thailand’s Siam Cement Group, which is capable of manufacturing 220,000 tonnes of paper per year in Binh Duong Province.  The Japan-based Sojitz Corporation is making a feasibility study to build a 600,000-tonne pulp production factory in the Tay Nguyen (Central Highlands) region. 

There are also many new domestically-invested paper projects such as Viet Nam Paper Import and Export Corporation (Vinapimex), Vinh Phu Paper Company, Phu Giang Packing Company and Binh An Paper Company. These new projects have capacities averaging between 50,000 and 250,000 tonnes of paper or pulp.  Viet Nam has continued to attract foreign investors because it has plentiful material resources, industry experts said. 

Meanwhile, environmental experts expressed their concern about the boom in the number of new paper projects in the country, which, according to them, may cause severe pollution, particularly of natural water resources.  The Ministry of Natural Resources and Environment has acknowledged that paper production is one of the industries that causes the most serious environmental damage. 

The ministry says that most Vietnamese paper factories are equipped with substandard production technology and machinery, leading to more serious pollution than those in developed countries.  The Cau River in the North is a typical example. It is filled with waste water pumped from nearby paper factories including the Hoang Van Thu Paper Factory. This company’s pulp production line was required to stop operation. 

Many developed countries have closed or have plans to close their paper companies and move them to other countries in order to better protect their own environment.  But Viet Nam wants to develop its paper and pulp industry to meet the market’s demands and to effectively use available material resources created through the government’s five-million hectare afforestation programme. 

To prevent the local environment from being destroyed by paper and pulp production activities, the government needs to have regulations to protect water resources.  The environment ministry is drafting new regulations to strictly control the treatment of waste water resources near paper factories. 

The new policies also cover the use of paper production technology and equipment.  Other experts still insist that the government should not encourage the development of the paper industry, which can come at the expense of the quality of life for locals. — VNS (Posted July 23, 2007)

Foreign companies are lining up as Viet Nam opens its post and telecommunications industry, which is expected to be one of the most lucrative sectors in the country.  Last June, Prime Minister Nguyen Tan Dung issued a new directive easing the way for more foreign investment.  The Ministry of Post and Telematics is required to come up with a plan to open up the domestic post and telecommunications market for foreign companies in line with Viet Nam’s World Trade Organisation commitments. 

Under WTO rules, foreign companies that provide mobile and other services without their own network infrastructure should be allowed to set up joint ventures with domestic telecommunications suppliers. Foreign capital investments in these projects have to be less than 51 per cent.  Foreigners wishing to supply services that require network infrastructure facilities in Viet Nam can set up a joint venture with their capital contributions accounting for less than 49 per cent of the joint venture’s capital. 

In the postal service field, foreign companies will be allowed to enter into a joint venture with a Vietnamese post partner and their capital contributions to these projects must be less than 51 per cent.  Deputy Minister Nguyen Duc Lai said that the telecommunications ministry is drafting a decree with specific regulations for foreign investors. 

The new decree includes measures aimed at removing impediments to investment activities in the posts and telecommunications field. The draft may be submitted to the government by year’s end.  Pham Hong Hai, director of the Telecommunications Department, predicted that foreign investors will be most interested in partnerships involving mobile services and renting of network infrastructures. 

Tom Sipple, managing director of Yahoo! Southeast Asia, said that Viet Nam now has over 15 million people online, constituting 18 per cent of the population. Forecasts show the number of users will double to 30 million by 2010 with a 35 per cent Internet user target.  The growth rate means foreign companies can reach more customers and domestic businesses, and Yahoo! does not want to miss that opportunity, said Sipple. The company plans to launch more services in Viet Nam to capitalise on the growing market. 

Lim Chuan Poh, chief executive international officer of Singapore Telecommunications Limited Company-Singtel, said the company sees Viet Nam as a very interesting prospect.  Singtel plans to focus investment on the Asia Pacific region, including Viet Nam, where there is huge potential in subscriber growth and low penetration of current customers, Lim said. — VNS (Posted July 23, 2007 by Thien Ly)

Forty eight foreign-invested projects capitalised at nearly $40 billion are poised to come to Viet Nam, according to the MPI’s Foreign Investment Agency. 

A large part of this huge source of capital will be poured into hi-tech, thermo-power, real estate and steel projects. Taiwan’s Foxconn Group will invest $5 billion to build electronic technology parks in several provinces across the country. Pacific Land Ltd. of the UK plans to invest $1 billion into the Sai Dong A Hi-tech Park in Ha Noi.  Real estate and tourism projects account for over $16 billion, equivalent to 40.2 per cent of the total amount of foreign capital that would come to Viet Nam.  Switzerland’s Trustee Suisse will join with Viet Nam’s Vinaconex to build the so-called Asian pearl complex and a residential area on Phu Quoc Island, Kien Giang province, with $2.7 billion. Kumho Asiana of the Republic of Korea plans to invest $2.5 billion in the Giang Vo cultural-trade centre and the My Dinh exhibition centre in Ha Noi. 

Foreign investors also are interested in thermo-power plants with six projects totalling $8.5 billion. Japan’s Sumitomo wants to build a 2,640 MW plant in the central province of Khanh Hoa, with investment of $3.8 billion. Meanwhile, a joint venture between the US-based AES and the Viet Nam National Coal and Mineral Industries Group will spend $1.463 billion on a 1,200 MW plant in the northern coastal province of Quang Ninh.  Notably, Chinese investors have expressed interest in building five big works in the fields of thermo-power and real estate. The local An Phu Corp. and China’s Chieu Thuong Corp. and Khai Phat Bank will build the An Phu Hung new urban zone in HCM City with $1 billion capital. 

In addition, Chinese investors will pump $650 million in a thermo-power plant in HCM City, a luxury trading zone and the Ha Long-Mong Cai highway, worth $400 million each. — VNS (by Le Hung Vong and Posted August 20, 2007)