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Business Deals

Vietnam investing billions in US equipment and services

Vietjet, PetroVietnam ink deals during premier's first Washington visit

HO CHI MINH CITY -- Vietnamese companies signed an estimated $15 billion in deals on Wednesday, giving Prime Minister Nguyen Xuan Phuc solid achievements at the end of his three-day first official visit to the U.S.

Vietnamese information technology company FPT will help United Parcel Service upgrade operations in the country.

The deals covered aviation, energy, health care, hospitability, technology, and cooperation in investment and trade. This should help reduce the American deficit with Vietnam, which has increased from $7 billion to nearly $32 billion over the last decade.

Vietjet, the Southeast Asian nation's second-largest airline, signed three contracts worth some $4.7 billion. The biggest is a $3.58 billion order for 215 engines and technical support with CFM International. The new engines are expected to shave 15% off fuel consumption, according to Nguyen Thi Phuong Thao, the airline's president and CEO.

Vietjet and GE Capital Aviation Services signed a $1 billion memorandum of understanding on financing Vietjet's purchase and leaseback of 10 aircraft. The carrier also signed a $180 million agreement for auxiliary power units and maintenance with Honeywell. The airline currently operates 45 Airbus A320 and A321 aircraft and will expand its fleet to over 50 this year. Last year, it signed up for 100 Boeing aircraft, with the first due for delivery in 2019.

Phu Cuong Group signed a $2 billion deal for wind turbines and maintenance from GE for an 800-megawatt power project in the Mekong Delta.

Tin Thanh Group has reportedly signed a memorandum of understanding with Roberts Group for trade and investment cooperation worth some $3 billion.

Vietnamese information technology company FPT signed an agreement with United Parcel Service to upgrade logistics and operations in the country.

PetroVietnam, one of the biggest state-owned enterprises, will import $600 million of U.S. power-generating plant hardware.

The Vietnamese government has been moving closer to the private sector in the wake of major losses and scandals at a number of state enterprises. Among top officials recently purged was Dinh La Thang, the party chief in Ho Chi Minh City and a member of the Politburo, who once chaired PetroVietnam.

Before his departure, the prime minister met with Vietnamese business leaders to show solidarity with exporters facing increased U.S. protectionism under President Donald Trump. Vietnamese entrepreneurs will accompany him on a trip to Japan next week.

(Nikkei)

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