[Round-up] More S. Korea Firms Come to Vietnam to Serve Samsung, SBV Cuts USD Deposit Rate

Tuan Minh

16:43 18/12/2015

BizLIVE - Two additional South Korean companies have won licenses to build plants in HCM City to serve a Samsung complex. The Vietnamese central bank has trimmed the interest rate on deposits by individuals to 0% while economists have called for immediate dong devaluation.

[Round-up] More S. Korea Firms Come to Vietnam to Serve Samsung, SBV Cuts USD Deposit Rate

Two additional South Korean companies have won licenses to build plants in HCM City to provide components for a Samsung complex.

Two Samsung Providers Win License for Projects in HCM City
The Saigon Hi-Tech Park (SHTP) in Ho Chi Minh City has granted investment licenses to new projects worth a total of $112 million of two South Korean companies that will provide components for a Samsung complex in the city.
Platel Vina, a project of Intops Vietnam Limited Company, will build a factory to manufacture electronic components, with an investment of $80 million. The project is expected to come into operation at the end of 2016, with a capacity of 6.5 million products per year.
Meanwhile, the heat exchanger manufacturing plant project of Daihan Climate Control Co. Ltd has an investment of $32 million. The plant is scheduled for operation in the second half of 2016, with a capacity of two million products a year. It will focus on producing heat exchangers, components for refrigerators and air conditioners.
Samsung Electronics started construction on the $1.4-billion Samsung CE Ho Chi Minh City Complex (SEHC) in May to produce electronic items such as Smart, LCD and LED TVs.
Dong Nai Beats FDI Target
Vietnam’s southern province of Dong Nai attracted $2.4 billion of foreign direct investment (FDI) in the year to November 20, above the province’s target of $1.5 billion set for this year.
Most of the new projects were financed by Japanese and South Korean investors and were involved in supporting industries, aiming to increase the localization rate for the domestic manufacturers.
Mekong Delta Needs $3.84 Billion for Infras Projects
Vietnam’s Mekong Delta provinces will need more than 86.3 trillion dong ($3.84 billion) in the next five years to develop key projects, according to the Ministry of Transport.
Around 65 trillion dong ($2.8 billion) of the total funding will go to road projects. The rest will be spent on waterway developments and aviation facilities.
Ha Nam Province Lures $3.5 Billion in Investment
The northern province of Ha Nam has so far attracted 533 investment projects with a total capital of over $3.5 billion, including 154 FDI projects worth 1.4 billion, a provincial official said.
In the first 11 months of this year, the province lured 62 projects worth $693 million, including 33 foreign-invested ones.
Vietnam Makes 12th Cut to Gasoline Price
Vietnam’s Ministries of Finance and Industry and Trade have decided to slash the price of RON 92 gasoline, the most popular grade in Vietnam, by 391 dong a liter to 16,405 dong ($0.73) a liter, starting 3pm Friday.
The price of gasoline in Vietnam has been revised up six times and has been cut 12 times, causing the price to fall 1,170 dong ($0.52) a liter.
Prices of other petroleum products have also been reduced.
Gold Medal Taiwan Beer, a brand brewed by Taiwan Tobacco & Liquor Corp., and Sapporo Vietnam Co. Ltd., a fully owned subsidiary of Japan’s Sapporo International Inc., have struck a deal to open a brewery in Vietnam, Focus Taiwan cited a source as saying.
Under the deal, Sapporo Vietnam will be responsible for production of Taiwan Beer in the southern province of Long An, near Ho Chi Minh City, while a Vietnamese company will handle the marketing.
Malaysian apparel producer Prolexus Bhd plans to issue shares to raise up to 62.53 million ringgit ($14.5 million) in order to set up a garment factory in Vietnam and a fabric mill in Malaysia, after Vietnam has concluded a number of FTAs with developed countries.
The construction of the new garment factory is scheduled for commencement in 2016 in Vietnam’s southern province of Tien Giang. It will be completed and be fully commissioned by 2017, with an initial production capacity of about 4.5 million pieces annually.
A number of Vietnamese economists have advocated the local banking authority should devalue the dong now after the Fed raised its benchmark interest rate.
Le Dang Doanh, former director of the Central Institute for Economic Management (CIEM), told BizLIVE that the State Bank of Vietnam (SBV) needs to follow market movements and weaken the USD/VND rate right by the end of this year to buttress exports.
The State Bank of Vietnam (SBV), the country’s central bank, has slashed the interest rate on deposits in U.S. dollar to 0% from 0.25% for individual depositors, effective December 18, while the rate for corporate depositors will remain unchanged at 0%, which has been in place since September 28.
The move aligns with the monetary authority’s orientation to deal with the “dollarization” in the economy and switch from mobilization-lending relations to buying-selling relations.
The recent volatility of the USD/VND has been driven by market sentiment which has been dominated by the continuous decline of the Chinese yuan and speculation on the Fed’s possible hike of interest rates, Nguyen Thi Hong, deputy governor of the State Bank of Vietnam (SBV), told local press on the sidelines of a conference on Dec. 17.
Regarding the Fed’s decision on raising its policy rate by 0.25 percentage point on Dec. 16 (Hanoi time), Ms. Hong said that the news had been factored in the market.