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SEKISUI CHEMICAL CO., LTD - New Water Infrastructure Sales Company to Be Established in Vietnam

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SEKISUI CHEMICAL CO., LTD. (“Sekisui Chemical”; President: Naofumi Negishi) will establish SEKISUI VIETNAM PIPE SOLUTIONS COMPANY (“SVPS”), a sales company focusing on the water infrastructure industry, in the Socialist Republic of Vietnam in January of next year.

Sekisui Chemical signed a business alliance agreement with Tien Phong Plastic Joint Stock Company (“TifoPlast”; Chairman: Tran Ba Phuc), a plastics manufacturer in Vietnam, in July of last year in order to expand its water infrastructure business in that country.* Later, preparations for OEM production of Sekisui Chemical products including plastic pipes advanced and a full-scale sales system was established.

SVPS will bolster understanding of local market conditions and will seek to acquire orders for water and sewage system projects using OEM products manufactured by TifoPlast and products imported from the Sekisui Chemical Group. SVPS will also work as a base for increasing sales in other Asian countries.

 

1. Background

Vietnam is situated at the center of ASEAN countries and continues to enjoy strong economic growth. As a result of its social stability, abundant labor force, etc, numerous foreign enterprises including Japanese companies are establishing operations in Vietnam.
At the same time, however, infrastructure including water and sewer systems is underdeveloped, and considerable growth in this market is expected. Vietnam’s standards on water and sewer pipes and other infrastructure are complex, and understanding and management of information concerning those standards is essential for expanding business.
Accordingly, Sekisui Chemical decided to establish SVPS as a local sales company in order to promote sales by improving understanding of local conditions, controlling system and acceleration of decision making.

 

2. Business Development

Initially, SVPS will sell OEM products manufactured by TifoPlast such as plastic pipes, water chambers, manholes, and fittings and products imported from the Sekisui Chemical Group. In addition, SVPS will collaborate with TifoPlast to conduct sales in other Asian countries.
SVPS will also partner with local construction companies and deploy the advanced pipe construction and quality control techniques that Sekisui Chemical established in Japan with the aim of receiving orders for water and sewer system projects.

 

3. Specific Measures by Sekisui Chemical in Water Infrastructure Fields in Vietnam

Sekisui Chemical and the Osaka-based Urban Infrastructure Technology Center Foundation proposed and were selected to carry out a trenchless sewer pipeline rehabilitation method promotion project as a private-sector technology promotion project in Vietnam by Japan International Cooperation Agency (JICA). Under the project, Sekisui Chemical will carry out trial implementation of its trenchless sewer pipeline rehabilitation method in Ho Chi Minh City. The trial will increase awareness of Sekisui Chemical’s technologies, and Sekisui Chemical, working in cooperation with the Urban Infrastructure Technology Center Foundation, will seek to acquire orders for comprehensive projects covering all aspects from pipe investigation and assessment to maintenance and management.
Since fiscal year 2012, SEKISUI AQUA SYSTEMS CO., LTD., a subsidiary of Sekisui Chemical, has been undertaking a water environment improvement project using energy-saving organic industrial waste water processing (ESROTAE rotating disc contactor organic waste water processing device) in Vietnam as part of a team made up of industry, academia, and government that includes Sun Engineering Co., Ltd., Osaka Sangyo University, the Osaka Prefectural Government, and the Research Institute of Environment, Agriculture and Fisheries of Osaka Prefecture.

 

4. Business Objectives

Business operations will commence on January 1, 2015. The target of sales is 10 billion yen by fiscal year 2020.

 

5. Overview of the New Company (tentative)

1.

Name:

SEKISUI VIETNAM PIPE SOLUTIONS COMPANY

2.

Date of establishment:

January 1, 2015

3.

Capital:

750,000 USD

4.

Shareholder:

Wholly owned by Sekisui Chemical

5.

Principal business:

Sale of water-infrastructure related products

6.

Headquarters:

Hanoi, Vietnam

7.

Number of employees:

6

Building highways Nhon Trach - Tan Van

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Ministry of Transport (MOT) has proposed to the Prime Minister to consider the investment project highways Nhon Trach - Tan Van.

Nhon Trach - Tan Van Highways starts from the intersection with the highway Ben Luc - Long Thanh (Dong Nai province); endpoints connected to Tan Van - My Phuoc (Binh Duong Province) length 34.28 km. In Phase 1 will focus on connecting route from Nhon Trach city (provincial road 25B) to Thu Duc intersection with length 17.85 km four-lane, highways standards, with total investment is expected 430 million USD. In due of $ 230 million will be invested by Korean ODA loans and $ 210 million is expected to invest in BOT.