US First Solar to build solar module plant in Vietnam

The US-based First Solar Inc will build a new manufacturing plant in Vietnam alongside with another plant in the US to meet strong demand for its thin-film photovoltaic modules, said the company’s website.

Its two new four-line manufacturing plants that will boost the company's annual manufacturing capacity by nearly 500 MW are expected to be completed in 2012.

Each new plant will create approximately 600 jobs and will be designed to accommodate additional production capacity.

Negotiations and site assessments are ongoing in both countries, but the capital investments for the two plants have yet been unveiled.

The new plants will extend First Solar's previously announced capacity additions, including eight lines in Malaysia, four lines in Germany, and two lines in France.

Earlier this year the company also completed an expansion of its Perrysburg, Ohio, manufacturing plant, which serves as First Solar's primary hub for engineering, research and development.

The two new plants, combined with these previously announced expansions, will nearly double production capacity from 1.4 gigawatts (1,400 megawatts) in 2010 to more than 2.7 GW in 2012.

Unlike other major solar companies, First Solar, the largest in the sector with market value of $11.7 billion, produces modules that use cadmium telluride to produce electricity from sunlight rather than polysilicon.

Booming demand for clean electricity systems has sent sales for many of the leading solar companies worldwide soaring this year, with First Solar, Suntech Power Holdings and Yingli Green Energy Holding Co reporting they had sold out of products, Reuters reported.

Earlier this month, China’s Suntech opened its first in the US as part of its plan to raise output capacity this year to 1.8 gigawatts.

One gigawatt is about the size of a nuclear power reactor.

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Private sector plays greater economic role

Customers shop at a PT2000 store in Ha Noi. Hanh Fashion's PT2000 is popular in the domestic clothing industry. — VNS Photo Truong Vi

HCM CITY — The private sector has played an important role in the national economy in recent years, and now contributes 47 per cent of GDP and 54 per cent of jobs.

Most private-sector companies have developed from small businesses.

Over the last 20 years, for example, bakery manufacturers, including Kinh Do, Duc Phat and A Chau, invested in modern technologies and began to dominate local markets with high quality goods.

Although the textile and garment sector exports most of its goods, some private companies like Thai Tuan and Phuoc Thinh produce brocade for women that sells locally.

Hanh Fashion is well-known for office dresses, while Foci, Viet Thy and PT2000 are highly recognised by youth.

In addition, Minh Long pottery company has reached a very high level of production.

In the industrial sector, Truong Hai has grown as a reputable automobile manufacturer, and 30 other private enterprises have provided components for FDI enterprises.

Along with fast growth in quantity and awareness about corporate governance, the market vision of private companies has led to changes in the way foreigners are investing in Viet Nam.

Foreign investors have begun to co-operate or develop franchise production rights for local private enterprises.

Successful companies have proven their professional ability in modern management and have shifted from a family-company model.

All have achieved significant economic effectiveness.

"Local businessmen have suffered stiff challenges because of the global financial crisis, but they have successfully adapted as only a small number of enterprises have closed operations," Pham Chi Lan, senior economic expert, said.

Private enterprises created 4.3 million jobs or 54 per cent of all jobs during the 2000 – 2008 period. The number is four times higher than that of State-owned businesses.

The average yearly income of workers in 2000 is VND8.2 million or 1.4 times higher than GDP per capita, but in 2008 the ratio doubled to reach VND32 million.

Working capacity has also improved. Average yearly turnover for each worker has increased three times, from VND225 million in 2000 to VND710 million in 2008.

Of the 1,000 enterprises that contributed the highest earnings to the State budget, private enterprises and State-owned and FDI companies each contributed 33 per cent.

The rate illustrates the effectiveness of the private sector and its value to the country.

In addition, many ideas to adjust agency policies developed by the private sector have been rec-ognised.

However, at present, the number of large private enterprises is still low because of the lack of capital and qualified human resources.

But in coming years the number will increase as Viet Nam's membership in the World Trade Organisation provides a trade environment for the development of financially healthy, large businesses.

"Private enterprises have always tried their best to survive and develop," Lan added.

She noted that when Viet Nam cut import taxes following AFTA and WTO roadmaps, many foreign investors immediately closed their factories and began importing products.

However, many local enterprises continued to invest in modern technology and expand their production because of a more favourable trade environment. — VNS

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Private firms take lead in efficiency, but profits slump

Photo: Tuoi Tre

Though Vietnamese private firms take lead in investment efficiency, their profits are still much lower than those of state owned and foreign-invested enterprises, said a recent report.

While private businesses take the lead in terms of investment efficiency, their ratio of profit on total assets is still lower than that of SOEs and FIEs, according to the report on private economic sector development released by the Taskforce on the implementation of Enterprise Law and the UNDP on Wednesday.

The ratio of profit on total assets of private businesses is 1.5 percent, while the figures are 5.4 and 10.6 percent for SOEs and FIEs respectively.

To date, 500,000 enterprises have been established in Vietnam. If comparing the investment capital and the GDP of private businesses, SOEs and FIEs, one can see that the private sector has the highest investment efficiency.

In 2001, the ICOR index (Incremental Capital Output Ratio) of the private sector was 2.63, while the figure was 7.42 for SOEs and 6.29 for FIEs. The ICOR of the private sector was still the lowest in 2007: private businesses only needed VND3.74 to make a VND1 of profit, while SOEs needed VND8.28, and FIEs VND4.99.

Besides, the expenses private businesses have to pay to create jobs are also the lowest. In 2008, SOEs needed VND436.5 million worth of stockholder equity to create a job, while private businesses only needed VND224.1 million.

In 2009, the private economic sector provided jobs to 85 percent of laborers, while SOEs and FIEs 11.5 percent and 3.4 percent, respectively, of the total 47.7 million laborers.

The ratio of total turnover on total assets of the private sector is also higher than other economic sectors. In 2008, private businesses could create VND1.8 billion in turnover from VND1 billion. Meanwhile, with the same sum of money, SOEs created VND0.8 billion, and FIEs VND0.89 billion.

Le Duy Binh, Representative of the Taskforce on the implementation of the Enterprise Law, said that a lot of private businesses have reported loss.

Private businesses have to bear high expenses, therefore their profit is low. Private businesses, for example, have to pay high for leasing workshop premises, while SOEs and FIEs can lease land at lower fees, Binh added.

Besides, private businesses usually find it difficult to access bank loans because they do not have assets to mortgage for loans.

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Viet Kieu begin to invest in VN property market

HA NOI — A large number of Viet Kieu (overseas Vietnamese) have started to invest in the Vietnamese real estate market.

Investments had become more diversified and stronger than ever, said Megagroup's Director Nguyen Xuan Chau.

Chau added that the trend had started around 10 years ago and really picked up over the past two years.

In 2010, he said, a series of resorts and ecological tourism projects were announced with a growing number of North American management and consultancy firms co-ordinating the projects.

To capitalise on this, Minh Viet Investment Joint Stock Company recently bought into the franchise of a famous foreign company in order to use its trademark to invest in Viet Nam's real estate market.

According to the com-pany's director Chi Edward, his company will use the trademark to do business in training and brokerage as well as managing and developing the real estate market in Viet Nam.

The company had previously invested in projects in Ha Noi, HCM City and the northern province of Quang Ninh.

As further proof, at the end of 2009, the director of Binh Thien An Joint Stock Company, Viet kieu Trinh Thanh Huy, decided to return from Russia and announced that his company was looking to pour hundreds of millions of dollars into the real estate market in HCM City.

Binh Thien An is currently involved with the Thao Dien Metropolice project in District 2 of HCM City.

In the second and third quarters of this year, many other tourism developments were announced by overseas Vietnamese investors from eastern Europe.

The Vietnamese real estate market was still young. It had a huge potential to attract investment from overseas Vietnamese, Chau said.

Referring to a recent survey, experts said the new trend would create competitiveness in the market which would help develop it further.

The survey was carried out at an international real estate exhibition with the participation of 46 countries.

The results showed that investment interest in the Vietnamese real estate market had grown by 20-30 per cent since 2008.

Another survey conducted by a British company also found that in the next two years, Viet Nam would become one of the top three markets of interest in the world. — VNS

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GE opens wind-turbine plant

Aerial view of GE manufacturing facility in Nomura Industrial Zone in Hai Phong. — VNS Photo

HAI PHONG — In response to growing global demand for clean energy, General Electric officially inaugurated its first manufacturing facility in the northern port city of Hai Phong yesterday.

The factory, which has a total investment of more than US$61 million, will manufacture wind turbine components. Parts will be shipped to GE wind turbine manufacturing factories worldwide.

The plant occupies a 8.4ha in Nomura-Hai Phong Industrial Zone and has a designed capacity of 1,500 products per year. It expected to generate 400 jobs.

Initially, the facility will produce generators for 1.5MW wind turbines.

John Krenicki, GE vice chairman and CEO of GE Energy, said: "Viet Nam is an ideal place for GE to invest and expand our manufacturing capability because it has a skilled work force and a bright future in its energy sector."

"With demand for electricity, fuel, and water continuing to rise around the world we believe that building in Viet Nam is a great investment," he added.

Over the past few years, GE has invested in a number of activities in Viet Nam, ranging from clean energy and health care to aviation.

Tran Tuan Anh, deputy minister of Industry and Trade, said he hoped GE would expand its production base in Hai Phong to include other wind turbine components.

"Wind power is a completely new sector in Viet Nam. Demand is increasing and fossil energy resources are exhausted. Thus, recycled energy development will play an important role in ensuring national energy security," he said.

GE and the Ministry of Industry and Trade signed a strategic partnership agreement on Thursday in Ha Noi.

GE will continue investing in the hi-tech clean energy sector in the country, focusing on the manufacture of gas turbines and development of support industries, the deputy minister said.

GE launched in Viet Nam in 1993, one of the very first American companies to do so after the US lifted its trade embargo.

The company later set up a representative office in HCM City in 2001. In 2003, GE established the 100 per cent foreign-invested GE Viet Nam Co Ltd in Viet Nam.

GE is a global infrastructure, finance and media company, operating in the energy, water, transportation, health, oil and gas, finance and information sectors. It reaped a revenue of $40 billion last year. — VNS

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Landlords fight for new tenants

HCM CITY — Landlords in HCM City will vie with each other during the third quarter in offering better leasing deals including rent and amenities, according to the latest market review published by real estate firm CBRE.

The firm received 28 per cent more enquiries in the third quarter than the second, but more than 43 per cent of these were for spaces 150 sq.m and smaller, the review says.

The company estimates that around 1.2 million square meters of office space will be put in use over the next three years in the city.

Project owners will face a challenge from long-term tenants of large areas who plan to re-rent a part of their space at prices between 15-35 per cent lower than the standard ones, CBRS associate director of research and consulting Rudolf Hever, said at a press conference on Monday.

He also said (2,000-5,000sq.m) grade C buildings in prime locations would continue to be popular because their value and long-term lease would help tenants have greater control over their investment.

There were no new grade A office buildings on offer during the third quarter, but rents for the segement reduced lightly to a monthly average of US$36.7 per sq.m, which Hever said was due to higher demand for grade B and C spaces.

One grade B building and eight new grade C buildings came on line in the third quarter, providing a total of 63,180sq.m. — VNS

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Sacomreal to list 100 million shares in Vietnam, chairman says

Saigon Thuong Tin Real Estate Joint- Stock Co., a unit of the fourth-biggest bank on Vietnam’s main stock market, plans to list 100 million shares on the Hanoi Stock Exchange next month, the unit’s chairman said.

The shares will start trading on Nov. 9, Dang Hong Anh said in a telephone interview Thursday.

Vietnam’s stock market debuts, 75 percent of which rose in the first eight months of the year, have all dropped bar one since September, amid concerns that high interest rates will crimp lending and the currency will fall further. The benchmark VN Index dropped 6.9 percent this year and closed at 458.66 today.

Sacomreal, as the Ho Chi Minh City-based property developer is known, plans to go ahead with the listing as “we still believe in our future because we target a 30 percent increase in profit a year from 2011 to 2015,” company General Manager Thai Van Chuyen said Thursday.

Sacomreal, whose businesses include real-estate, property consulting and office rental, has since 2008 started construction on projects including Sacomreal Hoa Binh Residential Building, Office Building General Limex and Tan Thanh Urban Area in Ho Chi Minh City, it said in a statement on its website.

The company had a pretax profit of VND668 billion ($33.4 million) in the first nine months of the year, exceeding the target of VND650 billion for the whole of 2010, Chuyen said.

Demand for office space in Ho Chi Minh City continues to grow, though rents are expected to come down, especially in buildings with lower occupancy, according to the third-quarter report from CB Richard Ellis Group Inc.

The unit of Saigon Thuong Tin Commercial Joint-Stock Bank is trading from 30,000 dong to 40,000 dong per share in the so- called over-the-counter market, Chuyen said. Companies don’t have to set initial prices for the first trading day on the country’s second-biggest bourse.

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