Vietnam hopes to attract more small and medium-sized enterprises from Japan to invest in the country, especially after Japan has set a strategy for overseas investment due to the aftermath of natural disasters and economic recession.
Vietnam hopes to attract more small and medium-sized enterprises from Japan to invest in the country, especially after Japan has set a strategy for overseas investment due to the aftermath of natural disasters and economic recession.
 |
| Seminar on attracting Japanese firms into local industrial parks |
This was highlighted by Director Do Nhat Hoang of the Foreign Investment Agency at a seminar on attracting Japanese firms into local industrial parks held by the Ministry of Planning and Investment on Feb. 28.
There are currently 283 industrial parks in 58 provinces and cities nationwide, Hoang informed, but up to 35% of the space remains unoccupied.
“We want to get connected to the overseas investment strategy of Japan to fill up these industrial parks,” he said.
Minister Hideo Suzuki at the Japanese embassy in Vietnam said his government had made new development strategy, including promoting outbound investment, especially to Asian countries. To deploy such a strategy, Japan has developed a supporting program for enterprises investing abroad to overcome the current economic stagnation in Japan.
Hideo Ohkubo, chairman of the global promotion committee for small and medium enterprises of the Tokyo Business Association, said the aging situation in Japan has narrowed down the domestic market. Besides, Japan is coping with stagnant exporting industries due to continuous appreciation of the yen, the sharp decline in international competitiveness of Japan against the rise of other Asian countries and the consequences of the earthquake and tsunami last year.
However, whether Japanese firms will choose to invest in Vietnam in response to their government’s strategy remains a question.
Ohkubo estimated up to 97.3% of the 220,000 small and medium enterprises in the manufacturing industry do their businesses at home. Most of the Japanese investors overseas are large groups and corporations, while small and medium firms haven’t got used to investing abroad, he noted.
Japanese businesses considered Vietnam a more attractive destination for production expansion than India and Thailand, and the third appealing destination in terms of consumption market after India and Indonesia.
“Still, most Japanese small and medium-sized enterprises are hesitant to invest in Vietnam,” said Ohkubo.
Yoshifumi Tsujio, an expert at the Japan International Cooperation Agency (JICA), said Japanese firms will make investment decisions more easily when Vietnamese industrial parks have completed infrastructure. Besides, Japanese enterprises seek sufficient services, local staff that comprehends Japanese language and culture and Japanese employees ready to reside in industrial parks.
Ohkubo informed India, Indonesia and Thailand have developed industrial zones that satisfy the working and living demands of Japanese investors. Even the lately open Myanmar has accepted Japan’s consultancy to build Japanese-style industrial parks to lure investors from the foreign country.
He recommended Vietnam to turn industrial parks to small cities to attract FDI capital of Japanese small and medium enterprises.
Japan is the fourth biggest foreign investor in Vietnam with over 1,600 projects worth US$23.6 billion, according to the Ministry of Planning and Investment.
(Source: SGT)
