Vindaco dissolves because small vehicle market too small

16:45' 14/06/2007 (GMT+7)

VietNamNet Bridge – Kimikazu Mitsuhashi, Director General of the dissolved automobile joint venture Vindaco, said that automobile manufacturers were facing big difficulties with current policies, poor infrastructure and small market. VAMA’s Vindaco joint venture dissolving Could you please tell me the reasons behind Vindaco’s dissolution? Kimikazu Mitsuhashi, Director General of Vindaco Japan's Daihatsu is well known for its small vehicles. When deciding to make investment in Vietnam several years ago, we hoped to dominate the market with less-than-one-tonne vans and the multipurpose vehicle (MPV) Terios. However, everything did not go the way we expected. The sales of small vehicles decreased sharply from 8,000 units in 2005 to 3,000 in 2006. With such a small market and the fierce competition among manufacturers, we know we cannot continue our business in Vietnam. Why have small vehicles sold slowly, while small vehicles prove to be more convenient compared to bigger vehicles? It is because of many reasons. First, small vehicles are bearing the same taxes as bigger vehicles so the production costs of big and small vehicles are equal, while customers all want lower prices for smaller vehicles. Second, most Vietnamese people consider a car a big asset and a kind of investment; therefore, they are always cautious when making decisions. The most important factor for Vietnamese buyers is reasonable price. The third weak point of small vehicles is that people can just use them to go to work and get around town, but they cannot use them to take their entire families on outings. Daihatsu is affiliated with Toyota. How would you comment about the information that Toyota has put pressure on Daihatsu to withdraw from Vietnam? It is true that Daihatsu and Toyota have many associate companies and cooperation centres, but they keep independent of each other. We do not receive any pressure from the outside; we make our decisions based on the market. Will Daihatsu stay in Vietnam after Vindaco dissolves? You could distribute imported cars, for example. We have not got any plans to stay in Vietnam, but we may consider this in the time to come. I think the market proves to have potential and Daihatsu will return as soon as it can. How will you deal with clients who have bought Vindaco’s cars, I mean post-sales services? I can assure you that all post-sale services will still be provided as previously, when Vindaco was operational. We have 16 authorised workshops nationwide, and our commitments on car maintenance will still be valid. Before dissolving, Daihatsu signed contracts with our workshops, requesting them to fulfill our commitments with clients until November 6. After the date, Daihatsu will assign a third manufacturer who will be responsible for caring for our products in Vietnam. Besides, Daihatsu will provide spare parts through distributors so that Vietnamese clients can get replacement accessories at any time. How will you deal with your staffs and the joint venture’s staffs after the dissolution? Vindaco now employs 117 staffs, including three foreigners. Most of them will still get a salary through the end of July though the joint venture will be dissolved in June. Moreover, we have other kinds of compensation. Regarding the joint venture’s assets, Vindaco’s management board has decided to give back the 6ha land plot in Soc Son district to the Hanoi Department for Natural Resources and the Environment. The movable assets, including the production line, workshop and office will be auctioned. What is your assessment about Vietnam’s automobile industry? With the current policies, which allow the import of used cars, brand new cars, and with such poor infrastructure and a small market, it will be very difficult for Vietnam’s automobile industry to develop, and assemblers are facing a lot of difficulties. (Source: VNE)

Lilama joins hands with Hyundai and Mitsubishi

12:53' 14/06/2007 (GMT+7)

VietNamNet Bridge – Lilama Corporation’s leaders, who are paying working visits to the Republic of Korea (ROK) and Japan, had working sessions with three big groups in the last few days, Hyundai, Mitsubishi and TKK-Toyo Kanetsu KK. Lilama and Hyundai shaking hands In Korea, Lilama’s officials met with Hyundai’s leaders, a big group known for its strength in power plant designing and heavy industry development. Lilama and Hyundai have agreed to the detailed measures aiming to push up the cooperation between the two sides in consulting, designing and managing the implementation of the power source development projects (designed by Hyundai). The two sides have also mentioned the possibility for the cooperation in building the factories specializing in making equipment for power plants (turbines, generators) with Hyundai Heavy Industries. The cooperation with Hyundai Motor has also been thought of. In Japan, Lilama’s delegation met and worked with Mitsubishi’s leaders, a big industry group of the country and its subsidiaries, including Mitsubishi Trading, Mitsubishi Heavy Industries and Mitsubishi Metal One. Lilama’s Director General Pham Hung and Mitsubishi Metal One’s Chairman and CEO Moriji Kanada signed an agreement on establishing a company which makes high-quality preliminarily treated steel and setting up a network for distributing the product in Vietnam. With Mitsubishi Heavy Industries, the two sides have agreed to set up a working team (with three representatives from each side), which will programme and distribute works in power projects that each side will be responsible for. This will serve as the basis for the two sides to sign long term cooperation agreements on implementing power source development projects in Vietnam, which will be carried out under the mode of EPC (engineering, purchasing and construction). Three of Mitsubishi’s experts will come to Vietnam to work at Lilama to implement the said agreements, which, according to Mr Hung from Lilama, were beyond their expectations of success. Lilama and Mitsubishi Heavy Industries have discussed the establishment of a joint venture on building the ships capable to carry 100,000 tonnes. The shipbuilding yard is expected to be located in a place in the southern region of Vietnam. Lilama and One Energy, a member of Mitsubishi Trading, had a working session aiming to speed up the implementation of the agreement signed before on the cooperation for the 1,200 MW Vung Ang 2 thermopower project. A cooperation agreement on manufacturing big-capacity basins and containers for oil refineries and chemical plants has been signed between Lilama and TKK group. The agreement will help speed up Lilama’s execution work at the Dung Quat Oil Refinery. In Japan, Lilama had a working session with Tokyo Mitsubishi - UFJ – ltd, the biggest bank in the country. The Japanese bank will provide long term loans to Lilama’s investment projects, while the bank’s Hanoi branch will provide short term loans for Lilama’s production and business activities. Nguy Hoang Son (from ROK)

Tourism festival to open in Danang

13:25' 14/06/2007 (GMT+7)

A beach in Danang VietNamNet Bridge - Danang – Sea Calling 2007 Festival will be held from June 15-19 with an array of impressive large-scale shows, including an opening ceremony on June 16 with a helicopter giving out colorful smoke and spreading a banner that reads Danang – Sea Calling 2007. According to Nguyen Dang Truong, Vice Director of the Danang Department of Tourism as well as Head of the 2007 festival organization committee, besides traditional games, there will also be modern ones to show a harmonious combination of folksiness and elegance, modernity and tradition. The festival will be held for 20 km along the Danang Beach. The key features will be a programme called Youth Gala with more than 5,000 participants including tourists from the Japanese cruise ship Peace; a beach parade titled Walking with Sea Lovers; a Vietnamese-Korean cultural exchange; a coastal cuisine festival; a beer bathing event; a fish-worshiping ceremony; beach sport games; air-ship flying, and others. To meet tourists’ demands during the festival, since June 1, Vietnam Airlines has increased it’s daily number of its flights between Danang and HCM City to 6, which is 60 % higher than usual. There has also been also a 30% increase in daily flights between Danang and Hanoi. (Source: NLD)

Vietnamese beauty pageant in UK

10:30' 14/06/2007 (GMT+7)

Jennifer Pham, Miss Asia USA 2006 VietNamNet Bridge - From mid July to the beginning of August there will be a Vietnamese beauty pageant, taking place for the first time in UK for young Vietnamese women abroad. Entry into the Global Vietnamese Pageant is restricted to single, childless Vietnamese women aged 18-27 who are over 160 cm tall, have at least a high school education and have never had cosmetic surgery or a sex change. The winner will be awarded GBP3, 000 and a package tour to Viet Nam for the semifinal of the Global Vietnamese Pageant. The first runner-up will receive gifts and GBP2, 000 and the second runner-up will get GBP1, 500 and gifts. The contestants will also vie for the minor titles of Miss Photo and Miss Talent. Candidates can send their forms to Tri Thuc Viet magazine’s office at 23A Grosvenor Park, London, SE5 0NH, or hannangnguyen07@yahoo.com.uk from now until July 1 and contact www.missvnuk.com for further information. The pageant is sponsored by the Tri Thuc Viet magazine with support of the Association of Vietnamese Community and Vietnamese enterprises in UK. (Source: SGGP, missvnuk.com)

Rex hotel gets recognition

10:10' 14/06/2007 (GMT+7)

VietNamNet Bridge - The State President awarded the Labour Hero title to the Rex Hotel managed by the Saigon Tourism Corporation (Saigon Tourist) on June 10. Secretary of Ho Chi Minh City Party Committee Le Thanh Hai (R) attends the award presentation ceremony at Rex Hotel The Secretary of the Ho Chi Minh City Party Committee and Politburo member, Le Thanh Hai was also present at the ceremony, and the hotel in the recent past has hosted many international leaders while successfully organising many large-scale national events. Dropping the old name of the Thanh Hotel in 1990, the Rex has gradually improved its services, particularly since 1997 and is now the first hotel in the south to receive the Labour Hero title. For the occasion, the manager of the Rex Hotel, Ha Truong My, was honoured with a title for his contribution to the development of the company, which was awarded to him by the Prime Minister. The hotel has worked with the Raffles Hotel and Resort’s human resources team to train staff and apply international management technologies and techniques in order to upgrade from a four-star to a five-star hotel. The Rex’s annual turnover growth rate is 16%, and they have set a target of US$500 million by 2010 and US$1 billion by 2015. (Source: SGGP)

Swiss, Vietnamese leaders meet

09:44' 14/06/2007 (GMT+7)

VietNamNet Bridge – A Vietnamese delegation led by Vice State President Truong My Hoa met Switzerland's President of the National Council Christine Egerszegi Obrist and President of the Council of States Peter Bieri, in Bern on June 12. The Swiss leaders told Hoa that their government would continue to aid Vietnam's efforts in building a sustainable economy and fulfilling the Southeast Asian country's Millennium Development Goals through their official development assistance (ODA) programmes. While agreeing with the assessment, Vice President Hoa went on to emphasise the need to ratchet up cooperation between the Vietnamese and Swiss parliaments in order to consolidate long-term ties between the two countries. During the same day, Hoa also met with her Swiss counterpart, Pascal Couchepin, and the Minister of Economic Affairs, Doris Leuthard. The Vietnamese stateswoman said the her country was grateful for the vote of confidence from the Swiss government by providing aid for Vietnam’s socio-economic development. Her counterpart pledged continued assistance in the areas of finance and banking and stated his administration's desire to support Vietnam’s bid for a non-permanent seat on the United Nations Security Council for the 2008-2009 term. Minister Leuthard also relayed the Swiss position of continued support for Vietnam in the areas of poverty reduction, health and education, finance, banking system reforms, tourism development, preservation of historical relics and environmental protection. (Source: VNA)

Real estate market focuses on wealthy

09:27' 14/06/2007 (GMT+7)

A coastal villa owned by the director of a private company looks to the sea (Photo: VNE) VietNamNet Bridge – In the first quarter of 2007, US$406 million was poured into hotel and tourism projects, accounting for one-fifth of the total capital of newly licenced projects, according to the Foreign Investment Department under the Ministry of Planning and Investment (MPI). At the same time, coastal villas are being hunted by investors. The real estate market for the rich is burning. Hanoi, HCM City lack hotels According to the Vietnam National Administration of Tourism (VNAT), Hanoi and HCM City, the two biggest cities in Vietnam, are short of high-grade hotel rooms. Meanwhile, the Hanoi Department of Tourism estimates that around 2 million foreign visitors will come to the city in 2010 and Hanoi will need around 26,000 hotel rooms of three-star standard and upwards, including around 7,000 rooms of four and five stars. The volume of visitors coming to HCM City has risen by seven times, reported the Vina Capital investment fund. And this is the reason urging investors to pump money into hotel projects in big cities. Most recently, Bitexco has introduced a luxurious apartment and office building project, The Manor Officetel, in Hanoi, which has drawn many investors. The special characteristic of this building, according to Bitexco’s Deputy Director Le Phuong My Linh, is apartments there can also be used as offices since the apartments have full services like a luxurious hotel. Staff of Bitexco will help apartment owners deal with mail, photocopying, typing, document checking; people who live in The Manor Officetel don’t need to hire employees. That’s why around 90% of the apartments in the building have been sold though only the building’s foundation has been completed. Korea’s Keangnam is preparing to build a 60-storey building comprising 500 five-star hotel rooms and offices worth US$500 million in Hanoi. The project will be completed in 2010. In HCM City, Vina Capital has spent more than $16.5 million to buy more than 52% of the Omni Saigon Hotel with 249 rooms. Coastal villas take the throne Besides high-class hotels, villas in famous coastal tourist sites are being hunted by investors. Villas or land plots for building villas on Tuan Chau Island in Quang Ninh province, Do Son in Hai Phong city, Nha Trang city in Khanh Hoa province have become ‘hot cakes’. According to investors, such villas can be used as resorts for their families and be leased while their value increases with time. That’s why 324 land plots in the 71ha Phu Quy tourist zone in Nha Trang city have been sold at the price of VND10-16 million ($625-1,000) per sq.m. The Aquaba Resort project in Mui Ne, the southern province of Binh Thuan, has sold 60% of apartments and villas. Many of the four hundred villas of the Flamingo resort near Dai Lai Lake have also been booked. Indochina Land Holdings has announced it will sell some plots of land in its Nam Hai Resort in Hoi An Town for investors to build their own villas. VinaCapital also plans to auction some plots of land on Son Tra peninsula in the central city of Da Nang. 2007 is predicted to be the year of tourism with an increasing number of foreign visitors coming to Vietnam. The VNAT is asking for the Prime Minister’s permission to host the Miss Asian 2008. These are reasons that can make investment in hotels, luxurious apartments and villas boom. (Source: Lao dong)

Only 50% of securities companies’ websites patched: BKIS

08:31' 14/06/2007 (GMT+7)

VietNamNet Bridge – Director of the Bach Khoa Internetwork Security Centre (BKIS) Nguyen Tu Quang has rung the alarm bell over the low level of security of websites run by stock companies. Security holes found on 12 securities companies’ websites What would you say about the security of websites and transaction systems of stock companies and stock market management agencies? Earlier in April we announced a report which said that security holes could be found on 12 out of 22 securities websites which can be targets for hackers. We then gave the warning that if the errors were not fixed immediately, hackers could take control over the websites at any time, causing bad consequences: they can access the websites and change the results of securities transactions, change the securities indexes and insert false information. However, our warnings have been ignored: only a half of the websites we mentioned before have been fixed. We have sent another document to the State Securities Commission (SSC) to repeat the possible damages if the websites are not fixed. In the document, we have identified the names of the websites which have fixed and which have not fixed errors. Could you tell us more about the possible consequences? We call this a systematic error, which means enterprises do not pay appropriate attention to network security, and errors may have occurred in many points of the system. For example, when installing software into a system, enterprises do not ask the producer to guarantee that the code is secure. Enterprises also do not hire independent consultants or verify software before use. The biggest problem of securities companies lies in the websites. Hackers may penetrate the websites and then access other systems, taking advantage of the holes to change information about investors’ accounts or give false information. The most risky problem is that we cannot precisely and quickly determine which companies hackers are attacking, because hackers are wise enough not to bring down the website, they are better keeping the websites to attack through the holes. Currently, securities transactions are carried out in the morning only and through many different levels. However, the transactions will be conducted via networks. How important will be network security then? The more the transaction system is convenient, the more risks may appear. It would be safer if transactions were carried out at fixed hours and through many levels. However, this would inconvenience investors. If the mentioned errors cannot be fixed, it will be very dangerous for transactions once the real-time order matching scheme is applied. Investors will also find it difficult to know which websites are safe, and which are not. How will we punish hackers in case of a network security break-down? We still lack a completed legal framework on this issue. Hackers now are just fined for their hacking activities. As far as I know, the Ministries of Justice and Public Security are trying to amend the laws to heavily discipline hackers. What should securities companies do in this context? They should be aware that it is not costly to make investment in network security. With the equipment securities companies have nowadays, they will not have to buy anything more. I think SSC should recommend securities companies get a certificate of network security. The certificate will show investors which companies to trust. In the long term, I think SSC should require network security from stock companies, considering the conditions the companies must have to be eligible to provide securities services. (*) In Vietnam, when making transactions via networks or phones, investors must commit to accept risks. In case troubles related to networks occur, securities companies do not take any responsibility for clients’ losses. (Source: VNE)

Foreign tourists to spend more in Vietnam

17:09' 13/06/2007 (GMT+7)

Foreign visitors in Hoi An. VietNamNet Bridge – A survey taken by the Research and Markets Organisation based in Ireland reveals that there will be many favourable conditions for Vietnam tourism in the coming years. The survey also says that foreign visitors will spend US$976 per day on average in Vietnam by 2011. According to the survey, the major sources of foreign travellers coming to Vietnam are China, the Republic of Korea, the US and Japan. In the period of 2007-2011, Vietnam will benefit from an increasing number of Russian visitors. The report also points out that Aeroflot of Russia, Korean Airlines and Air France – KLM are well operating foreign airways in Vietnam. (Source: Tuoi Tre Online)

Setting up new banks: green light on

16:41' 13/06/2007 (GMT+7)

VietNamNet Bridge – The regulation on setting up joint stock banks has been promulgated by the State Bank of Vietnam, paving the way for the establishment of more banks after a decade with no new banks. With the aim of creating healthy competition in the market, while only allowing the most capable banks to be established, the central bank has set up strict requirements for candidate banks. In order to get operation licences, banks must follow the strict requirements on chartered capital stipulated by the Prime Minister in different periods. From now until the end of 2008, the required chartered capital is VND1tril ($62.5mil) at minimum. After December 31, 2008, investors must have at least VND3tril to be eligible to set up banks. Investors must make capital contributions to banks with their own money; they are strictly prohibited from making capital contributions with borrowed money. Foreign investors are not allowed to make capital contributions to newly set up banks. They are only allowed to buy stocks of local banks which have been operating for two years at least. The foreign ownership in a local bank must not be higher than 30%. A bank to be set up after the regulation comes into effect will have at least 100 shareholders, including three founding institutional shareholders who have the minimum assets of VND2tril and chartered capital of VND500bil. In case the founding shareholder is a commercial bank, it must have the minimum total assets of VND10tril, chartered capital of VND1tril, and a bad debt ratio of below 2%. Shareholders are not allowed to transfer shares within three years of the day of licencing. Founding shareholders can only transfer shares among themselves within five years of the day of licencing. Every institutional shareholder is allowed to hold 20% of the bank’s chartered capital at maximum. Individual shareholders are allowed to hold 10% of the bank’s chartered capital at maximum. Shareholders must get the Prime Minister’s approval to hold more than the above proportion of shares. The regulation on setting up banks was promulgated on June 7 and will be valid 15 days after the regulation is published in the official gazette. Kieu Huu Dung, Director of the Banks and Non-banks Credit Institutions Department under the State Bank of Vietnam, said that right after the regulation came into effect the central bank would release a notice about receiving the applications for setting up new banks. Twenty five applications for setting up joint stock banks have been sent to the central bank. All of them have the tentative capital sums of VND1tril and higher, and one of the banks has the impressive capital of VND3tril. However, Mr Dung said that the central bank would not consider any applications until the regulation came into effect. State Bank Governor Le Duc Thuy stated at a meeting with the press in March that the central bank would not be soft in licencing new banks. Prior to that, experts warned that many investors would set up banks not for doing business themselves, but for reselling their operation licences. (Source: VietNamNet, VNE)