"“We have lent a huge amount of money to the U.S. Of course we are concerned about the safety of our assets. To be honest, I am definitely a little worried.” "

Chinese premier Wen Jiabao 12th March 2009

""We have a financial system that is run by private shareholders, managed by private institutions, and we'd like to do our best to preserve that system."

Timothy Geithner US Secretary of the Treasury, previously President of the Federal Reserve Bank of New York.1/3/2009

Thursday, September 04, 2008

Massive major new investments in the Vietnamese Socialist Republic

We have posted several times how the Socialist Republic of Vietnam is booming (Saturday, September 29, 2007 Socialist Republic of Vietnam sees manufacturing investment from US and Taiwan soar as economy expands by 8% p.a. for more ). Multinational companies have been investing huge sums in Vietnam's technology industry - which has been boosted after George Bush shoe horned them into membership of the World Trade Organization

The mega Japanese corporations,Sanyo, Matsushita, Sony, Fujitsu, Toshiba, Matsushita and Nidec, are making major new investments in Vietnam.

Canon have put US$100 million into a laser printer factory in Thang Long Industrial Park in Ha Noi,and are ready to build a new factory in costing as much in Bac Ninh Province which will make Vietnam Canon's largest laser printer machines, with a manfacturing production capacity of 700,000 products per month or, 80% of the company's annual output.

This brings their investment in Vietnam up to US300 Mn. which they target for a US$1 billion turnover for 2007/8 . They also claim on their website to employ more than 12,000 people in Vietnam. In July they sponsored the Vietnam Computer Electronics World Expo (VCW Expo) which ran alongside a conference . This involved 400 exhibitors (including Canon, Asus, Gigabyte, Samsung, Intel, Sony, Panasonic, Toshiba, Hitachi, LG, Fujifilm, JVC, Acer, Olympus, Brother, and AOC ) and 260,000 visitors.

Japan's Nidec Corporation President Shigenobu Nagamori said two plants making electronic equipment are now in operation, with a total investment of US$50 million. Over the last decade, Nidec Group invested nearly US$100 million in factories in the Tan Thuan Export Processing Zone.

By 2010, the Nidec Group plans to invest US$1 billion in 10 high technology plants in the Saigon High Tech Park(SHTP) in Ho Chi Minh City . Nidec Vietnam manufactures precision motor fans for computer hard drivesprecision stepping fans and optical pick-ups for computers . Also in the park Intel who have begun construction of a computer chip assembly plant worth US$1 billion which will be operating by end 2009, and contract electronics manufacturer Jabil who are set to invest up to US $100 million in projects at SHTP.

SHTP offers huge incentives to inward investors including ;
• Corporate income tax (CIT) of 0% for the first four years, followed by 9 years at 5 % and 10 years at 10 %

•VAT and import duty exemption for Equipment and machinery imported as fixed assets of projects

• Similar personal income tax (PIT; for both local and foreign workers at projects operating in SHTP.

• Competitive fees for rent and utilities

• Soft incentives include: - Multiple entry visas for expatriates - One-stop investment application service - On-site and electronic customs

Since starting in late 2002, Saigon Hi-Tech Park has granted investment licenses to 25 projects with total committed capital of US$1,366 billion. Key tenants include Intel Corporation (US), Jabil Corporation (US) who manufacture circuit boards for Cisco Systems Inc, Hewlett-Packard Company, IBM, Marconi Communication plc, Network Appliance, NEC Corporation, Nokia Corporation, Quantum Corporation, Royal Philips Electronics and Valeo S.A., Nidec Corporation (Japan), Sonion A/S (Denmark) who make micro acoustic parts for cell phones. and FPT (Vietnam)a homegrown software company.

Foxconn (Hon Hai) has mind blowing plans to invest US$5 billion in plants in the northern provinces of Bac Ninh and Bac Giang designed to make electronic equipment. This project is expected to earn export revenue of US$3.5 billion a year and initially provide jobs for 50,000 people.It also moves the centre of their manufacturing from China.

Foxconn plans to employ approximately 300,000 employees in Vietnam over the course of the next five years and the Bac Ninh mega site (40km north of Hanoi) began production in 2007 of camera modules incorporating expansion of Premier Image (acquired by Hon Hai last yearfor US$928Mn.) to produce digital cameras and will eventually rival in size Hon Hai's current industry mega-site at Longhua in Shenzhen, China. (Sunday, August 12, 2007 Vietnam, Hon Hai and riding tigers )The Bac Giang site will be just as big and also will involve a golf course and residential developments.

Foxconn operating as Hon Hai also has plans for more Chinese plants in Wuhan (central China) and Huaian (430km from Shanghai), whch are also expected to be larger than the Longhua facilities (based on land area).

Whilst most investment is in making kit, the TECO Group, is entering into a joint venture with SaigonTel to invest US$1 billion in building a software center in the new Thu Thiem urban area in Ho Chi Min City which is designed to attract 100 IT companies from Taipei.

Consolidating their position, 130 businesses from Japan and Vietnam are showcasing their IT products at the “Japan Information Technology Festival 2008” which opened in Hanoi yesterday and is claimed to celebrate 35years of Vietnam-Japan diplomatic relations.

If you tire of beige boxes with blinking lights and coloured images there will also be a series of Japanese cultural activities highlighting Japanese cuisine, the tea ceremony, Origami paper folding, kimonos and traditional costumes, and you can also share in the fast growing interest in Vietnamese calligraphy.

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