The Vietnam Textile and Garment Group (Vinatex) announced its plan to jointly build a polyester plant with the Vietnam Oil and Gas Corporation (PetroVietnam) in the Dinh Vu Industrial Zone in the port city of Hai Phong in northern Vietnam.

Approximately $200 million will be invested. The production capacity of this new plant will be 500 tons per day, and it is scheduled to start operation in 2011. It will be capable of providing about 40 % of materials for domestic sewing thread production in Vietnam after starting operation.

Both companies have reached a comprehensive agreement in business cooperation and the establishment of a joint venture to assist each other in supplying products and services and jointly searching for potential partners in the fields of mutual concern.

Additionally, besides building a plant, they will jointly invest in building urban areas' infrastructure, office buildings, textile and apparel development projects, and manufacturing equipment and material for the textile and apparel industry.

According to VINATEX, it will need $80 million to build the polyester plant this time, and to raise part of the funds, it plans to sell $50 million of dollar-denominated bonds overseas. This is its first time to sell bonds overseas, which are scheduled to be sold at the end of this year or at the beginning of 2009 and mature in either five or seven years. Deutsche Bank AG may help arrange the sale of the bonds. Being a state-owned company, VINATEX needs to get approval from the Ministry of Finance to sell the debt overseas.

VINATEX's sales rose 16% in 2007 from the previous year to 21 trillion dong (about $1.3 billion) and pretax profit rose 53 % to 550 billion dong.

VINATEX is to complete its privatization during 2008. After privatization, it will become a business group which will be active mainly in the textile area and various other fields (financial dealing, industrial parks, real estate and retailing).