Taking advantage of Vietnam's booming economy, Hong Kong-listed investment firm GR Vietnam announced that it will enter into a strategic partnership with state-owned Vietnam Southern Food Corp to redevelop Hiep Phuoc Port.

The total investment involved in the project is estimated to reach HK$1.32 billion, in which GR Vietnam will hold a 5 percent stake.

Vietnam Southern Food Corp will own another 5 percent in the project, while the remaining 90 percent stake will remain in the hands of the port's operator - Saigon Port.

GR Vietnam Executive Director Anthony Lam said that the project will be completed in 3 to 4 years. The total capital of the project will increase to $510 million in 3 years, of which GR Vietnam will be responsible to contribute 5 percent or $25.5 million.

Upon completion of the redevelopment, Hiep Phuoc Port - one of the four Saigon ports - will have a berth reaching 300 meters in length and a container-handling capacity of 500,000 TEUs (twenty-foot equivalent units).

GR Vietnam Chairman Howard Wong said the group chose Saigon - Hiep Phuoc Port because of its huge potential.

"It has the highest throughput and productivity per annum," Wong said, "it is where cargos and containers come and go from the Mekong Delta and the industrial parks in the Southern region."

The redeveloped port will handle containers as well as bulk goods. Vietnam Southern Food Corporation - the largest rice exporter in the country - expects export volumes through the new port to reach 5 million tons per annum, of which 3 million tons will consist of food stuff.

The Hiep Phoc project is not the first strategic cooperation between GR Vietnam and Vietnam Southern Food Corporation. Last year in November, GR Vietnam also entered into a partnership with Vietnam Southern Food Corp to tap into the growing convenient store business. Lam expects the first five convenient stores to kick off operations in the coming summer.

With a cash flow of approximately HK$400 million, the group is in good shape to continue to look for more investment opportunities in Vietnam, especially in the supply chain business, Lam said.

"It is very important to grasp the chance to tap into the Vietnam market right now," Lam said, "We believe that with the current pace of development, it would be much harder for us to tap into the country in 10 years."

News of the partnership did little to stimulate the stock performance of GR Vietnam. Dogged by the a 3 percent tumble on the benchmark Hang Seng Index, shares in the investment holding company also fell 3.33 percent yesterday.

The company's stock price closed the trading day at HK$0.29 apiece, slumping HK$0.01.

(HK Edition 04/15/2008 page4)