Business

Nearly 47 percent of Japanese firms in Vietnam plan expansion

Despite a raft of difficulties plaguing 2020, nearly 47 percent of Japanese businesses investing in Vietnam said they will expand operations in the next one or two years, the Japan External Trade Organisation (JETRO) said on February 8.
Nearly 47 percent of Japanese firms in Vietnam plan expansion ảnh 1The Japanese-invested Foster Electric Co. Ltd in the Vietnam-Singapore Industrial Park in Bac Ninh province (Photo: VNA)
HCM City (VNA) - Despite a raft of difficultiesplaguing 2020, nearly 47 percent of Japanese businesses investing in Vietnamsaid they will expand operations in the next one or two years, the JapanExternal Trade Organisation (JETRO) said on February 8.

Unveiling the results of a survey of Japaneseenterprises investing abroad in financial year 2020, from April 2020 to March2021, JETRO noted that among the more than 900 in Vietnam that took part in thesurvey, over 400 expressed an intention of expanding functions such as normaland high added-value goods production, logistics, and research.

In particular, the rate of Japanese businessesplanning to boost sales and normal goods manufacturing in Vietnam is highcompared to the level in other countries and regions.

About 16.4 percent of respondents also said theywill step up investment in equipment and other new investments in the timeahead.

Japanese firms have not only paid recent attentionto manufacturing and processing but also digital transformation, trade, andhi-tech agriculture, the survey found.

Hirai Shiji, Chief Representative of JETRO in HCMCity, said their expansion plans are fuelled by the higher revenue possibilitiesand Vietnam’s rising economic growth potential in the years to come.

Japanese enterprises are also considering there-establishment of certain supply chains affected by COVID-19, for example bychanging purchasing units or production bases.

Up to 18.8 percent of respondents said that if theywere to change suppliers, they would select those in Vietnam - the highest ratein the 20 Asian and Oceanic countries included in the survey. There were also 18.1percent that said they would choose Vietnam if they changed production bases, puttingthe country in second position after Thailand (20 percent).

Japanese businesses said Vietnam is highly regardedthanks to its growth potential, political and social stability, and lowerlabour costs compared to other countries in the region.

Also pointing out the obstacles facing Japanesefirms, the survey recommended that to attract new investors and encourageexisting businesses to expand, Vietnam should develop supporting industries andimprove its domestic supply capacity.

The JETRO report showed that in financial year2020, due to COVID-19, 52.8 percent of Japanese enterprises in Vietnam posted fallingprofits against 2019, while 29.4 percent recorded stable profits and 17.8percent posted an increase.

They expressed optimism about the prospects for Vietnam’seconomic recovery this year thanks to its effective control of COVID-19./.
VNA
#Japanese businesses #Japanese investors #JETRO #supply chains #Japanese investment in Vietnam #economic recovery #supporting industries #digital transformation #updated Vietnam news #Vietnamplus #Vietnam News Agency Japan Vietnam
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