SCG (Thailand) Pours Capital into Vietnam Petrochemical Sector

With the acquisition of 25% shares from Qatar Petroleum at Long Son Petrochemical Refinery Complex project, SCG Group (Thailand) continues to strengthen its position as a major investor in Viet Nam petrochemical sector.

Previously, Vina SCG Chemicals (VSCG), a wholly-owned subsidiary of SCG in Vietnam, has signed contract to acquire shares of QPI Vietnam Limited (QPIV), a subsidiary of Qatar Petroleum to receive all 25% shares in Long Son Petrochemical Co., Ltd – the investor of Long Son petrochemical complex, according to a press release posted on SCG’s website.

This 36.1 million USD deal (approximately 1.100 million Thai bath), which raised SCG’s direct and indirect shares in Long Son Petrochemical Co., Ltd from 46% to 71%. Meanwhile, the remaining 29% of the joint venture to develop this project is held by PetroVietnam (PVN).

This project is a major oil and gas project, the first petrochemical complex in Vietnam with production capacity of up to 1.6 million tons of olefins per year, total investment estimated at 5.4 billion USD, applying modern and advanced technologies and techniques, operating safely and meeting the requirements of environmental protection, ensuring high quality petrochemical products such as PP, PE…

The project will create about 15,000 – 20,000 jobs during construction and more than 1,000 jobs when go into commercial operations.

Moreover, the project is estimated to contribute to Ba Ria – Vung Tau and the national budget 115 million USD per year (about 2.5 trillion VND per year) during 30 years since its inception.

The successful negotiation and signing of documents and transfer of funds among partners are important milestone in the project implementation, ensuring that the project is put into operation by 2021.

The Siam Cement Group (SCG) is a leading corporation in the ASEAN region with many efforts to establish competitiveness in the global market. SCG has entered the Vietnam market since 1992.

SCG has also invested heavily in Vietnam in such core business lines as: construction materials, petrochemicals and packaging. In addition to direct capital inflows, in recent years, SCG has also expanded its investment in Vietnam through mergers and acquisitions (M&A).

SCG’s companies in Vietnam are mainly operating in the fields of cement – construction materials, chemicals and packaging. By the end of 2016, total assets of SCG in Vietnam are about 943 million USD.

ANT Consulting is here to assist you from the outset; providing corporate intelligence, risk advisory, management consulting services that assist market entrance, and ensure efficient business start-up operation.  Our services are as following:

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• Market Entry

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We strive to save your cost by guiding you towards economical solutions that comply with local legislation and procedures. We support you through early logistic solutions and carry you through as your business grows.  We aim to bridge the gap between international best practices and local cultures and assist foreign companies and organizations entering Vietnam market to overcome commercial and regulatory issues.

We could be reached at email: ant@antconsult.vn or tel: +848 3520 2779 .  To learn more about us, please visit www.antconsult.vn

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Great Opportunity in Vietnam – Japan Aviation Cooperation

Not only contributing to the trade connection between the two countries, the aviation industry also opens up opportunities for investment cooperation for investors in Vietnam and Japan.

All Nippon Airways (ANA) has appointed Mr Koji Shibata, Senior Vice President, Asia – Pacific Strategic Director to be a member of the Board of Directors at Vietnam Airlines Corporation. (Vietnam Airlines). It showed the respect and high appreciation of the cooperation opportunities of the leading Japanese aviation corporation. Mr Koji Shibata also represented the capital and exercised the rights and obligations of ANA with 107,668,938 shares, equivalent to 8,771% charter capital of Vietnam Airlines.

Ealier, on July 1st 2016, ANA has transferred to Vietnam Airlines the amount of 109 million USD to complete the company’s largest offshore investment transaction, and officially became a strategic shareholder of Vietnam Airlines.

According to Mr Pham Ngoc Minh, Chairman of Vietnam Airlines, ANA is truly a strategic partner, capable of cooperating, supporting and accompanying Vietnam Airlines in the process of developing and expanding the market, upgrading quality, service and corporate governance.

Currently, Vietnam Airlines flight routes are connecting to 20 domestic destinations, 29 international destinations with high frequencies and concentrating to connect through gateway airports in Ho Chi Minh City and Hanoi, participating in exploiting large customer flows in the region, directly competing with major transit centers such as Hongkong, Bangkok, Singapore, Kuala Lumpur and the Greater Mekong Subregion. In addition, Vietnam Airlines is operating 66 flights a week to Japan, while ANA has not cooperated with any airline for the same flight route.

As known, in addition to passenger transport, another aviation sector which is attracting the attention of Japanese investors is the air traffic management.

According to the Civil Aviation Authority of Vietnam, the Japanese party is proposing the establishment and operation of a special purpose company (SPC) to collect, analyze and provide information for air traffic management for relating companies. The SPC will be a joint venture with 51% Vietnamese capital and 49% Japanese capital. This model is being considered by the Vietnamese authorities, considering for implementation.

In addition, the investment in the Long Thanh International Airport project (Phase I), worth 3.53 billion USD project is still open to international investors, including Japanese companies, those who pursue this project from the first days.

According to the Civil Aviation Authority of Vietnam, based on the current agreements, the two countries’ airlines are allowed to operate without restrictions between destinations in Vietnam and Japan (except Haneda Airport in Tokyo). Currently, three Japanese aviation corporations that are ANA, Japan Airlines and Vanilla Air are operating five routes from Tokyo (Narita and Haneda) to two destinations in Vietnam (Hanoi and Ho Chi Minh City), with a total frequency of 42 flights/way/week.

Meanwhile, Vietnam Airlines is the only Vietnamese airline that operate the Vietnam – Japan flights, but with great frequency. As of the end of January 2017, Vietnam Airlines is operating 10 flights from three destinations in Vietnam: Ho Chi Minh City, Hanoi and Da Nang to 4 destinations in Japan: Tokyo (Haneda/Narita), Nagoya, Fukuoka and Osaka, with a total frequency of up to 66 flights/way/week. Furthermore, Vietjet Air and Jetstar Pacific have been licensed by the Civil Aviation Authority of Vietnam to operate flights from Hanoi/Da Nang to Osaka in 2017.

To sum up, in 2016, the total air transport between the two countries reached nearly 2 million passengers, increased by 18.6% over the same period in 2015, with an coefficient of average seat use of 80%, of which Vietnam Airlines has transported 1.28 million passengers, accounting for 66% market share, with coefficient of average seat use of over 82.2%.

ANT Consulting is here to assist you from the outset; providing corporate intelligence, risk advisory, management consulting services that assist market entrance, and ensure efficient business start-up operation.  Our services are as following:

• Advisory
• Market Entry
• Tax Advice
• Legal Advice

We strive to save your cost by guiding you towards economical solutions that comply with local legislation and procedures. We support you through early logistic solutions and carry you through as your business grows.  We aim to bridge the gap between international best practices and local cultures and assist foreign companies and organizations entering Vietnam market to overcome commercial and regulatory issues.

We could be reached at email: ant@antconsult.vn or tel: +848 3520 2779 .  To learn more about us, please visit www.antconsult.vn

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The France, Taiwan Phone Companies Invest in Vietnam to Take Advantage of TPP?

The information that Vietnam has finished the TPP negotiation pushing many phone manufacturing companies like Archos (France), Compal (Taiwan) to promote their market expansion plan and investment in through setting up business in Vietnam.

The Archos phone company (France) and their distributor – Petrosetco (Vietnam) are recently launching 7 product lines in Vietnam market.

Mr. Frederic Balay – Senior Vice President and CEO in charge of North American of Archos has opined that Vietnam is large market which phone demand is constantly increasing every year. Along with that, while Vietnam is an official member of the TPP, the market will be extended to billions of people and 40% of global GDP, attractive offers on tariffs for intra-origin goods.

Mr. Frederic Balay also said that these product lines are designed by a team of engineers in France and factories in China of Archos are undertaking production. But he revealed that the company is making long-term plans in Vietnam market.

At the end of September, a major phone producer – Compal (Taiwan) also confirmed their decision to return to Vinh Phuc to continue investing in the plan to produce smart phone which was left unfinished at the end of 2007.

Mr. Vincent Lee, Deputy General Director of Compal factory in Vietnam said that in two recent months, Compal has urgently repaired factory system; installed equipment, machinery; worked with a number of localities inside and outside of the province for employment and preparing to welcome the world’s top customers to visit exploring opportunities for investment and cooperation in smart phone manufacturer in Vinh Phuc.

Vinh Phuc leader suggested that Compal should shorten the negotiation with partners, and soon to announce the list of products to be produced, as the basis from now until the end of 2015.  The province can adjust the investment certificate has signed and complete the procedures, mechanisms and policies to support the project in accordance with the law of Vietnam.

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