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Saturday, June 22, 2024

Japanese investors expand business in Vietnam

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HCMC – Many Japanese enterprises in Vietnam are expanding their businesses by opening more factories, which is regarded as a “Vietnam-plus-1” investment wave, said Hirai Shinji, chief representative of the Japan Trade Promotion Organization (JETRO) in HCMC.

Many enterprises have been adversely impacted due to the Covid-19 pandemic, including those from Japan.

Travel restrictions and pandemic preventive measures have partly obstructed Japanese investors from reaching potential countries such as Vietnam to explore investment and business environment.

However, in recent times, many Japanese firms in Vietnam have been expanding investments, Shinji said.

The JETRO office in HCMC has seen many Japanese businesses, which are running factories in the country, seeking information and consultancy to invest in new projects.

For instance, Vinh Long Province, where Acecook is running an instant noodle factory, is attracting attention from many other Japanese firms in the country. HCMC-based Towa Company has plans to invest in the southern province, while Furukawa, whose factories are based in HCMC and Ben Tre Province, is exploring opportunities there as well.

Some other Japanese businesses active in the Tan Thuan and Linh Trung export processing zones in HCMC are also seeking opportunities for new projects in other localities.

According to Shinji, 15 Japanese enterprises have been supported by the government to diversify their overseas supply chains and all of them are doing business in Vietnam. They are likely to continue expanding their plants or build new ones in the Southeast Asian country.

Vu Trong Tai, general director of Reed Tradex Vietnam, the organizer of METALEX Vietnam 2020, said Vietnam has become an ideal investment destination thanks to its constantly moving economy, flexible investment attraction policies and many free trade deals signed recently.

As per a global economic outlook report launched by Oxford Economics, Vietnam holds the brightest outlook for economic recovery and is the only economy in the ASEAN region to post a positive growth in 2020, he added.

Another survey conducted by JETRO’s global division shows that the ratio of Japanese enterprises planning to expand their businesses in Vietnam in the next one to two years reached 63.9% in 2019, the highest in the ASEAN.

The findings show that Japanese enterprises will increase investments in Vietnam further as the nation has successfully brought the pandemic under control, Shinji said.

Besides this, Vietnam is an attractive market with some 100 million people, while its skilled workforce is highly evaluated.

Ending 2019, Japan was the second largest foreign investor in Vietnam, with a total registered capital of US$59.3 billion, making up 16.7% of the country’s total.

By Hung Le

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