VietNam Business

Sunday, November 21, 2010

Thermal power plant dedicated

TRA VINH — Deputy Prime Minister Truong Vinh Trong attended the ground-breaking ceremony yesterday for Tra Vinh Province's Duyen Hai 1 Thermal Power Plant, which he believed would play an integral role in ensuring the country's power demand for socio-economic development by 2015.

Trong, speaking at the ceremony, affirmed that the plant's construction was encouraging for the development of the southwestern region and for investments in the Cuu Long (Mekong) Delta area.

The Electricity of Viet Nam Group (EVN), which invested US$1.57 billion in the plant, and the contractor, Dongfang Electric Power Corporation (China), were asked to carry out their commitments, ensure rapid construction and engage in only environmentally-sound practices.

The plant offers a total installed capacity of 1,245MW, with an average output power from 7.5 to 8 billion kWh per year, using coal fuel and thermal power technology consistent with Viet Nam's antraxit coal. The plant will also meet all criteria regarding productivity, stability, safety and environmental protection.

According to Trong, by 2010's close, the Government will invest in the construction of Co Chien Bridge, which would link Ben Tre and Tra Vinh provinces, in order to facilitate further development of the region. The bridge is expected to be finished within in three years.

The EVN launched three other projects this year, including Nghi Son Oil Refinery, Song Bung 2 Hydropower Project and Vinh Tan 2 Thermal Power Plant. —VNS

Business forum opens in Moscow

MOSCOW — The fifth Vietnamese Business Forum in Europe opened in Moscow on Saturday, drawing representatives of 500 enterprises from Viet Nam and more than 10 European countries.

Industry and Trade Minister Vu Huy Hoang, addressing the two-day forum, said this was an opportunity for Vietnamese enterprises in Europe to meet, exchange experiences, find opportunities for co-operation and discuss measures to boost investment in these countries and in Viet Nam.

The minister also stated that the forum would help enterprises stay up-to-date on new policies developed in Viet Nam through direct dialogue with representatives from Vietnamese ministries, sectors and agencies.

Deputy Foreign Minister and Chairman of the State Committee on Overseas Vietnamese Nguyen Thanh Son spoke about Party and State‘s policies intended to encourage Overseas Vietnamese and the Vietnamese business community abroad to contribute to economic development in Viet Nam and present the image and products of the country to the world. He reminded the forum attendees that one goal of Vietnamese enterprises abroad was to link Viet Nam with the rest of the world.

Tran Dang Chung, president of the Vietnamese Business Association in Russia, said enterprises needed to boost solidarity and exchange information and experiences to overcome certain challenges, especially those stemming from the global economic crisis.

Forum participants will focus their discussions on four issues: the debt crisis in Europe and the challenges to Vietnamese enterprises; linkage and sharing as the basis for successes in the Vietnamese business community in Europe; Viet Nam's policies to support exports to Europe; and investments in Viet Nam—the Vietnamese business community's responsibility to their home country. — VNS

Delta region's largest port begins operations

HA NOI — The biggest wharf in Cuu Long (Mekong) Delta was inaugurated in southern Can Tho City yesterday, two months earlier than expected.

Terminal No 2 of Cai Cui Seaport, the principal work of the seaport construction project's second phase, is capable of handling 20,000- DWT ships and receiving nearly-30,000-DWT ships.

The project, built in just 14 months, came to fruition through the co-operation of Can Tho City People's Committee and the Viet Nam National Shipping Lines (Vinalines).

The wharf will facilitate Can Tho City's move toward becoming one of the gateways of the Mekong Delta area, a major import and export hub.

It will also help reduce the cost and time of transport and ease the pressure on the overloaded Sai Gon Seaport.

The first phase of construction for the Cai Cui Seaport, a 9-ha wharf capable of accommodating vessels with a freight capacity of 10,000 tonnes and a warehouse and container yard, began in January 2007.

Once the entire project is completed in 2012, Cai Cui will become the largest-ever seaport in the region. When fully operational, it is expected to handle 650,000 tonnes of cargo per year. — VNS

Saturday, November 20, 2010

BP's broken well in Gulf of Mexico is 'dead'

WASHINGTON – US officials have finally declared BP's broken well in the Gulf of Mexico "dead", five months after a deadly oil rig explosion set off one of the costliest and largest environmental disasters ever.

Although the troublesome well may have been killed once and for all, BP still faces a long uphill battle to clean up the Gulf, a litany of lawsuits, billions of dollars in fines and shareholders angered by the firm's instability after its share price more than halved.

Retired admiral Thad Allen, the US pointman for the government's response to the disaster, said the operation to intersect and cement the deepwater well had been successfully completed.

"With this development, which has been confirmed by the Department of the Interior's Bureau of Ocean Energy Management, we can finally announce that the Macondo 252 well is effectively dead," Allen said.

"Additional regulatory steps will be undertaken but we can now state, definitively, that the Macondo well poses no continuing threat to the Gulf of Mexico."

The announcement marked an anti-climactic end to a five-month battle to cap a busted undersea well that gushed nearly five million barrels (210 million gallons) of oil into the Gulf, the largest maritime spill in history.

No oil has leaked into the Gulf in the three months since the well off the Louisiana coast was plugged in a so-called "top kill" operation, but the US administration insisted that it also be sealed from the bottom with a relief well.

A final pressure test of the cement seal was completed at 5:54 am (1054 GMT), officials said.

"Today, we achieved an important milestone in our response to the BP oil spill -- the final termination of the damaged well that sat deep under the Gulf of Mexico," President Barack Obama said in a statement.

Obama said there was now a diminished need for the massive response to the spill, but "we also remain committed to doing everything possible to make sure the Gulf Coast recovers fully from this disaster."

He vowed to "see our communities, our businesses and our fragile ecosystems through this difficult time."

BP pledged to continue "remedying the harm that the spill caused to the Gulf of Mexico, the Gulf Coast environment and to the livelihoods of the people across the region."

The disaster was triggered by an explosion on the Deepwater Horizon rig -- leased by BP and operated by Transocean Energy -- that killed 11 workers on April 20.

The accident broke pipelines between the rig and the ocean floor, spewing massive amounts of oil into Gulf waters, exposing the oil- and wildlife-rich region's vulnerability to deep sea drilling.

For weeks, every effort to plug the well 5,000 feet (1,500 meters) below the surface of the sea fell short as the spreading oil fouled hundreds of miles of shoreline, closed fishing grounds and threatened fragile ecosystems.

The Obama administration also imposed a moratorium on deepwater drilling, setting back another mainstay of the Gulf economy while the cause of the disaster was under investigation.

Eighty-seven days into the crisis, BP finally succeeded in placing a giant cap over the well that stopped the flow of oil.

But the costs were huge, with local livelihoods disrupted and nearly 70 billion dollars wiped off BP's market value.

BP, whose chief executive Tony Hayward was forced to resign, has spent eight billion dollars trying to contain the disaster and has forecast it will eventually cost the energy giant more than 32.2 billion dollars.

"Although the well is now dead, we remain committed to continue aggressive efforts to clean up any additional oil we may see going forward," Allen said.

Multiple investigations into the disaster are still under way and official responsibility has yet to determined. An internal BP investigation laid some of the blame on its contractors.

BP America's CEO Lamar McKay sought to put a positive spin on the lessons his company has learned from the disaster, saying they would be shared to prevent a repeat in the future.

Beer imports rise on luxury tax cut

Beer imports rise on luxury tax cut Beer imports have increased sharply this year even though industry insiders say local production surpassed demand for the popular beverage.

Beer imports have increased sharply this year even though industry insiders say local production surpassed demand for the popular beverage.

At Cat Lai Port, which handles 80 percent of imported goods brought into Ho Chi Minh City and neighboring provinces, beer imports have reached US$282,661 so far this year. The imports, comprising more than 33,800 cases and 40,140 bottles, rose 55.2 percent in terms of value compared to the same period last year.

Customs officials at the port said tax cuts have driven a surge in imports this year. The luxury tax rate on beer products was cut to 45 percent from 75 percent last year. It is set to be lowered further to 30 percent in 2012.

According to the Vietnam Beer, Alcohol and Beverage Association, local beer consumption is around 28 liters per person per year. There are around 350 beer production factories around the country, with more than 35 major plants that have a capacity of more than 15 million liters a year.

A major beer producer who wished to be unnamed said Vietnam’s beer output has already outpaced local demand and many production lines are not running at full capacity.

Industry insiders have also questioned a recent decision by Ministry of Industry and Trade to allow a large volume of Heineken beer imports.

According to the decision, the import of 650,000 cases, equivalent to nearly 5.15 million liters, were meant for market study purposes.

However, industry insiders said the quantity was too big considering Heineken already holds a large market share and has production facilities in Vietnam. They suspect that the imports are meant for sale, given the preference among local customers for imported products.

The complaints have prompted the ministry to revoke the permission granted to Vietnam Brewery Limited, the producer of Heineken beer in Vietnam.

Welcome, don’t restrict foreign retailers: experts

Economic Needs Test could be a counter-productive entry barrier

A Lotte Mart outlet in Ho Chi Minh City’s District 11. Experts said it is better for Vietnam to encourage foreign retailers to come to the local market rather than restrict them.

Vietnam should encourage foreign retailers to come into the country and develop the immature market rather than restrict their entry, local and international experts have said.

They said at a conference in Ho Chi Minh City last week that the Economic Needs Test (ENT) the Vietnamese government is preparing would disadvantage the retailers in developing outlets and also make it more difficult for local officials to monitor the sector.

Any foreign firm wishing to open more than two retail outlets in Vietnam must apply for a license and pass the ENT criteria that the World Trade Organization allows each member state to establish in order to prevent market overkill in the retail sector.

However, ENT was a very difficult provision to create, said Robert Rogowsky, adjunct professor of International Trade at George Mason University’s School of Public Policy in the US. Instead, “it (the government) should try to create something healthy for the market.”

Rogowsky told Thanh Nien Weekly that it would be a problem for the government to devise and apply ENT for a market that is dynamic and fast-changing in different regions like HCMC, Hanoi and other areas.

The professor said it was better to spend time on encouraging foreign retailers to come and work with local producers and farmers rather than to create a formula for the ENT, which was not being used by governments, including that of China, to monitor their retail markets.

Francois Bobrie, economics professor at France-based Unversite de Poitier, said governments considered the ENT a measure to protect their local

retailers but generally did not use it, opting instead to set other requirements like outlet size that retailers had to meet if they wanted to develop their chain. For example, one of the requirements would be that an additional outlet must have a space of over 1,000 square meters to open in a specific area, he said.

It was not clear, however, as to how such stipulations would act as entry barriers to huge foreign firms that typically muscle in on domestic territory and send local firms out of business. It has been seen elsewhere that the entry of the foreign firms itself creates an unlevel playing ground because they have enormous capital and other resources that are impossible for domestic firms to match, local experts said.

Meanwhile, Vietnam has no law on the retail sector and the market has developed based on the Commercial Law and other related regulations, noted Fred Burke, director of law firm Baker & McKenzie Vietnam.

Former minister of Industry and Trade Truong Dinh Tuyen agreed that Vietnam needed a retail law but asserted that in the current situation, the Vietnamese government should apply the ENT.

Tuyen said the absence of ENT criteria was creating pressure on household-run retail establishments and reducing market transparency for foreign investors.

However, it was not easy to formulate the ENT in such a way that it would meet the twin goals of facilitating FDI in the retail sector through clear and transparent regulations, while at the same time preventing a market glut, the former minister said.

An official from the HCMC Industry and Trade Department said local officials lacked regulations as well as guidance to deal with applications from foreign retailers seeking licenses to open more outlets in the country’s most dynamic market.

“This is strange considering several international firms have already established their presence in the city,” said the official, who did not want to be named.

Foreign retailers including Korean Lotte Mart, Malaysian Parkson and German Metro Cash & Carry have open more than two outlets in Vietnam.

In a meeting with the municipal administration last month, members of the Japanese Business Association of HCMC asked for ENT guidelines so they would know what conditions they had to meet to develop their business here.

Representatives of Japanese firms said they were interested in the Vietnamese retail market, which was fully opened to foreign investors early last year, but they were hesitant to implement projects because they were not sure what they needed to do to pass the ENT test.

The Ministry of Industry and Trade said it was preparing ENT provisions that would apply to both local and foreign traders.

The ENT would be based on three criteria: the number of retail establishments, market stability and resident density, the ministry said.

Under one proposal being considered, local governments would establish a council to conduct the test and its outcome would need to be approved by the ministry.

Vietnam posted retail sales of US$65 billion in 2009, according to Tuyen. The nation’s gross domestic product last year was estimated at $80-90 billion.