Foreign firms rule the roost

Coralis Vietnam Co. Ltd, developed by Luxembourg companies Coralis SA and LOHR Industrie, became the latest high-profile enterprise to close January on a triumphant note, announcing the approval of a $114.6 million licence by the Ministry of Planning and Investment (MPI).
The licence paves the way for construction of a 65-storey complex on Hanoi’s Lieu Giai street, overshadowing the five-star Daewoo Hotel and the adjacent Australian Embassy.
With $53 million in legal capital, Coralis Vietnam aims to attract high-end tenants, both foreign and Vietnamese, with premium office and apartment space and a high level of service. Germany’s B&O Hightex was selected as the contractor, with construction of what will be the tallest skyscraper in Vietnam expected to take three years. Bangkok Bank Public Company Limited is tipped to finance 50 per cent of the total construction cost.
Earlier in the month, the MPI gave the nod to a prominent construction project called the Pousung Vietnam Industrial Enterprise. The $190 million licence will enable the project’s developer, Taiwanese sportswear giant Pou Yuen Industrial, to start work on the $480 million complex that will manufacture shoes, clothes and electronic parts in the southern province of Dong Nai.
Pou Yuen, a subcontractor for sports brands like Nike, Adidas, Reebok, Puma and Lacoste, revealed that subsequent to the first phase of construction, which is expected to cost $190 million, it would invest $200 million and $90 million for the second and third stages in order to complete the project. The complex is expected produce around 36 million pairs of shoes and 91.2 million items of clothing annually for export, generating some 80,000 jobs. Pou Yuen said that although it would import materials for producing sportwear in the first phase, it would


set up a chain of satellite factories in the second phase to provide domestically manufactured materials for production.
Pou Yuen Industrial has had much success in Vietnam, with two large-scale sports shoe factories up and running in Dong Nai and Ho Chi Minh City. The Pousung Vietnam Industrial Enterprise is scheduled to commence operations 18 months after construction begins.
The first big deal of the month went to Yamaha Motors Vietnam, which plans to invest over $47.6 million in manufacturing parts in Thang Long Industrial Park in Hanoi’s Dong Anh district. The move has increased Yamaha’s total capital in Vietnam to $127.8 million, a move expected to fuel the motorbike manufacturer’s drive to overtake market leader Honda. The company stated that the additional investment capital would be used to concentrate on developing domestically produced motorbikes.
A source from the MPI said Honda Vietnam was also planning to increase its registered capital by $58 million. The supplemented investment, however, is aimed at manufacturing automobiles in Vietnam, not motorbikes. Meanwhile, Hung Yen-based GMN Joint Venture, an assembler backed by Honda, is preparing to increase its capital by $25 million.
"Appraisal procedures have been finalised for the two plans," said a source from the MPI.
The source also revealed that another major deal would be announced in February, as soon as "some technical procedures" are taken care of. Developed as a business cooperation contract with $656 million in capital, the project aims at building an 800 MHz mobile phone network in Vietnam.
The MPI predicts that Vietnam will attract $4.2-4.5 billion in FDI this year, including capital that will go to existing projects, and that the country will disburse $3.1 billion in FDI in a bid to reach its target of 8.5 per cent economic growth in 2005.