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Japan eyes SE Asia as China costs rise

Update: December, 13/2012 - 10:29

 

Employees of Japanese-invested Yamaha Cover Company at work. Japanese investors are shifting their aims to Southeast Asia markets, especially Viet Nam. — VNA/VNS Photo Quach Lam
HCM CITY (VNS)— Japanese businesses are shifting many investment projects from China to Southeast Asia, particularly to Viet Nam, Akitoshi Mikio, vice chairman of My Lang Consultant Ltd. Co., has said.

He spoke at a seminar yesterday organised by the Investment and Trade Promotion Centre of HCM City.

Input costs have increased sharply in China, and Japanese businesses want to explore new markets because the Chinese market has been unstable and domestic consumption has slowed there.

In Viet Nam, Japanese small – and medium-sized enterprises are investing mostly in the information and technology sector, while larger Japanese companies are interested in the food sector.

Many Japanese brands are already in the market, including Sapporo beer, Nisshin foods, Ajinomoto monosodium glutamate, Acecook noodle and Nippon Ham.

Other sectors, such as textiles and garments, metal processing, plastics, household appliances, electricity and automobile parts, depend on components made by Japanese businesses.

Huynh Minh Tam, director of Orient Sun Logistic Co. said: "To further penetrate the Japanese market, Vietnamese enterprises should consider logistics costs to increase their competitiveness." Logistics costs can account for 20-30 per cent of total goods value.

He said that companies should also familiarise themselves with Japan's strict technical standards as well as food safety and hygiene regulations. Tam also advised Vietnamese exporters to pay more attention to Japan's agricultural and industrial standards.

In recent years, the Japanese Government has conducted a series of promotions to increase exports from foreign businesses.

The programmes are run by the Japan External Trade Organisation (JETRO), Manufactured Imports&Investment Promotion Organization (MIPRO), and Japan's Economic Ministry and Ministry of International Trade and Industry.

However, Pho Nam Phuong, director of HCM City's investment centre, said Vietnamese exporters had to deal with several barriers to the Japanese market.

"They include strict technical and foodstuff safety and hygiene regulations, lack of market information and experience, complicated distribution systems, and costs for trade promotion activities, which are expensive," she noted.

Bilateral trade turnover between the two countries reached US$21.18 billion in 2011, an increase of 26 per cent compared to 2010. Vietnamese exports also saw an increase of 39 per cent to $10.78 billion.

According to the General Department of Customs, in the first nine months of the year, the two-way trade turnover reached $18.3 billion, of which Vietnamese exports were $9.7 billion.

Japan is still a major source of Official Development Assistance (ODA) for Viet Nam. The funds are used mainly for human resources, infrastructure, transportation, electricity, agriculture, education, health and environmental protection.

Last year, three major projects used ODA from Japan, the Nhat Tan bridge construction project, worth more than 24 billion JPY ($299 million); the Nghi Son II thermo-electric plant, worth 29.8 billion JPY ($360 million); and a credit programme on poverty alleviation, worth $3.5 billion JPY ($42.1 million). — VNS

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