Mission Description

On July 21-25, 2003, the Deputy Assistant Secretary for Energy, Environment, and Materials, or a designee, will lead an electric power trade mission to Hanoi and Ho Chi Minh City, Vietnam, and Bangkok, Thailand. The mission will include representatives of U.S. electric power companies and equipment manufacturers interested in entering or expanding their presence in Vietnam and Thailand.

Commercial Setting

Vietnam

The adoption of the U.S.-Vietnam Bilateral Trade Agreement is opening doors to new opportunities for U.S. companies interested in Vietnam, including its power generation and transmission sectors. Over the next few years, demand for electric power is expected to grow at a rate of 13 to 15 percent per year. To meet this demand, an investment of US$19-20 billion by 2010 will be needed to develop 37 new power generation projects and about 4,000 km of 500kV transmission lines together with 100,000 km of low medium and low voltage distribution lines. Electricity of Vietnam (EVN, a state-owned monopoly) estimates that Vietnam will build 22 hydroelectric plants, eight gas or oil power plants, and seven coal-fired plants.

At present, the power output generated by non-government sources, such as Independent Power Plants (IPP) and BuildBOperateBTransfer (BOT) stations, accounts for only eight percent of the total national capacity, which the government may allow to increase to about 35-40 percent by 2010. To date, two major foreign BOT power generation projects have been licensed by the government: Phu My 2.2 (US$400 million) and Phu My 3 (US$359 million). Given the increasingly open policy toward BOT power projects, it is believed that there are significant opportunities for American companies to be involved in developing BOT power generation projects in Vietnam.

The World Bank (WB) and other international development agencies will be providing most of the financing for Vietnam's plans. A number of major donor-funded projects that offer opportunities for U.S. companies are either planned or ongoing: the ongoing WB rural energy project (US$190 million); the Southern Vietnam electrification project (US$23 million); the Pleiku-Phu Lam transmission project (US$149 million); the Phu My-Nha Be transmission project (US$120 million); the Pleiku-Danang-Son La transmission project (US$151 million); the Nha Be-Tao Dan transmission project (US$56 million); the Thuong Tin-Quang Ninh 500 kV power transmission project (US$177 million funded by the Asia Development Bank); and the System Efficiency Improvement, Equitization, and Renewable project (US$225 million funded by the WB).

The market in Vietnam for imported power equipment surpassed $1 billion in 2002 and is expected to grow at an annual rate of 10 to 13 percent. Some of the best prospects for U.S. companies include: technical and engineering services; equipment for power generation projects like turbines, capacitors, circuit switches, switchgear, and insulators; electrical protection equipment such as surge arresters, fuse cutouts, circuit breakers, and reclosers; electrical testing and calibration equipment and instruments; and pole line hardware for high-tension transmission lines. Although there is heavy competition in the power equipment market from European and Japanese firms, U.S. companies are well regarded and enjoy a reputation for high-quality products and services. European technical standards for power generation and transmission equipment are prevalent, but U.S. companies that can adapt their equipment can successfully compete in the market.

Thailand

There is currently an excess of generating capacity in Thailand due to the economic downturn resulting from the Asian financial crisis a few years ago. Construction of a number of independent power plants was halted temporarily, which in turn restricted demand for new generation equipment. Demand for power in Thailand is expected to increase in about 2006, and the Electricity Generating Authority of Thailand (EGAT) is planning to renovate some older hydro and thermal power plants to meet this demand.

Many medium-term opportunities exist for U.S. companies, including: repair services and replacement parts for power stations; transmission and distribution equipment; and maintenance equipment. Imports now come primarily from American, Japanese, and European manufacturers. Thailand offers a solid mid-sized market for U.S. manufacturers of electric power equipment, with an open market for imported products.

Thailand is in the process of deregulating its power generation and distribution industry, and given the age of existing equipment, the expected increased demand, and prospects for stronger economic growth, market opportunities for U.S. firms in the medium to long term are expected to be significant. Deregulation will likely stimulate some construction of new generation facilities, with prospects for sales to both government and private-sector producers.

Best prospects for U.S. companies are for: steam and gas turbine generators; boilers; burner retrofits; generator spare parts; equipment for substations and terminal stations; instrumentation and control equipment; power poles and high voltage distribution lines; construction and engineering consulting services; connectors; transformers; switches; and control components.

Mission Goals

The mission will seek to increase exports of U.S. electric power equipment to Vietnam and Thailand. The mission will advance U.S. commercial policy objectives, further specific U.S. equipment exporting business interests, and address market access issues. The mission also will help implement the U.S. National Energy Policy by expanding investment and trade in energy-related goods and services in these countries.

Mission Scenario

The mission will visit Hanoi and Ho Chi Minh City, Vietnam, and Bangkok, Thailand. Briefings and business appointments will be made for members of the business delegation. The mission will facilitate meetings with:

• Senior Vietnamese and Thai government officials,
  
• High-level executives at EVN and the EGAT, and
  
• World Bank officials involved with Vietnam's donor-funded power projects.

Timetable

The mission is scheduled to arrive in Bangkok on July 20, 2003, with activities to be conducted July 21-22; continue to Hanoi on July 22, with activities conducted on July 23-24; and continue to Ho Chi Minh City on July 24, with activities to be conducted on July 25. The precise schedule will depend in part on the availability of government and power industry officials, as well as the specific goals and interests of the mission participants.

Criteria for Company Participation

Eligibility

Eligible companies must demonstrate a capacity to deliver relevant equipment or services to Vietnam and Thailand.

A company is eligible to participate only if the products and/or services that it will promote on the relevant mission are either (a) manufactured or produced in the United States, or (b) if manufactured or produced outside the United States, are marketed under the name of a U.S. firm and have U.S. content representing at least 51 percent of the value of the finished good or service.

Selection Criteria

Companies will be selected on the basis of:

• Consistency of the company's market development goals with the scope and desired outcome of the mission as described.
  
• Past, present, or prospective business in Vietnam and Thailand.
  
• Diversity of company size, type, location, demographics, and traditional under-representation in business.
  
• Timely receipt of signed mission application, participation agreement, and participation fee of $3500 and $500 for each additional representative from the same company.
  
• Whether the company's overall business objectives, including those of any U.S. or overseas affiliates, are fully consistent with the mission's foreign and commercial policy objectives.

  Participation in the mission is expected to be a minimum of 8 and a maximum of 15 companies.

  Mission recruitment will be conducted in an open and public manner, including publication in the Federal Register, posting on the Commerce Department trade missions calendar - www.ita.doc.gov/doctm/tmcal.html - and other Internet websites, press releases to the general and trade media, direct mail and broadcast fax, e-mail, notices by industry trade associations and other multiplier groups, and at industry meetings, symposia, conferences, trade shows, etc.

An applicant's partisan political activities (including political contributions) are entirely irrelevant to the selection process.

Applications

Application deadline: April 15, 2003. Applications received after that date will be considered if time and space permit. Applications may be submitted immediately to Andrew Collier, Office of Energy - Energy, Environment, and Materials, U.S. Department of Commerce, Room H4054, Washington, DC 20230; telephone (202) 482-0680; facsimile (202) 482-0170 or 5361;
e-mail: andrew_collier@ita.doc.gov