Vietnamese, Japanese firms seek to boost sustainable partnership

HCM City (VNA) – Measures to build sustainable partnerships with Japanese producers is the focus of a workshop organised in Ho Chi Minh City on July 27 by the Vietnam Chamber of Commerce and Industry in Ho Chi Minh City (VCCI-HCM) and the Vietnam-Japan Human Resource Cooperation Centre.

The event heard that Japan is stepping up investment and business activities in Vietnam, creating more cooperation opportunities for local enterprises.

However, only a small number of Vietnamese enterprises are able to participate in the supply chain of Japanese enterprises.

According to Vo Tan Thanh, Director of VCCI-HCM, in 2017, Japan again became the largest foreign investor in Vietnam with total investment capital of 9.11 billion USD, accounting for over 25 percent of the total foreign direct investment (FDI) inflow into Vietnam.
 
In the first six months of 2018, Japanese enterprises poured nearly 6.5 billion USD into investment projects in Vietnam, making up nearly 32 percent of the total FDI in the country.

Japan’s investment in Vietnam will continue to increase for the time to come, reflected by the number of Japanese firms interested in and wishing to expand their investment and business in Vietnam each year.

Moreover, the prestige of Japanese enterprises has been confirmed through the many years of the Vietnam-Japan comprehensive strategic partnership, he said.

These factors have created more feasible and effective cooperation opportunities for Vietnamese businesses, Thanh noted.

Tsuyoshi Shimizu, from the Japan International Cooperation Agency, said that there are over 1,600 Japanese enterprises operating in Vietnam, nearly 70 percent of which said that they will expand their business in the next one to two years.

The main reason Japanese businesses want to increase their business in Vietnam comes from the forecast that the Vietnamese economy will grow positively, which will help increase their revenue and promote the growth of enterprises, he stressed.

Japanese firms are interested in fields with high growth potential such as trade, manufacturing of high-added value products, and production of consumer goods, said Shimizu.

Representatives from Japanese enterprises said they give priority to purchasing raw materials and components in Vietnam and using local workers because this is one of the most effective solutions to cutting costs and shortening delivery times, thus improving their competitiveness.

However, they can source only one third of materials in Vietnam.

Experts underlined that Vietnam needs to have more enterprises which are able to produce materials, components and machinery to meet the demand of Japanese partners.

Vietnamese enterprises should invest in producing items such steel, copper, aluminium, plastic materials, processing and shaping machines, punching and casting machines, and electronic components.

Vietnamese firms were also advised to think about long-term strategies and visions if they want to establish cooperation with Japanese peers as the latter are very cautious in setting up partnerships with new suppliers. However, if they have confidence in their partners, Japanese firms are likely to establish long-term collaboration with and create favourable conditions for their partners to develop. –VNA