Japanese investors are keeping faith to expand their presence in Vietnam amid global economic distress.
Japan is the largest investing country in Vietnam by registered capital
According to the Foreign Investment Agency, Japan was the largest investing country in Vietnam in the first half of this year with $4.15 billion or 65.1 per cent of total foreign direct investment (FDI) commitment to the country. Japanese investors committed to invest in 126 projects and expanded investment at 38 existing ones.
“The figure affirms Vietnam is a very attractive investment place for Japanese investors,” said Dang Xuan Quang, deputy director of the Foreign Investment Agency.
Following big names such as Panasonic, Canon, Toshiba, Toyota, Mazda, Honda, Suzuki, Sojitz and Sumitomo is Nidec Seimitsu Corporation, a subsidiary of the world’s largest mobile phone vibration motor manufacturer Nidec Group. Nidec Seimitsu has decided to build its first factory in Vietnam as well as the 11th of Nidec Group in this country.
The $40 million project, covering 39 square metres in Ho Chi Minh City’s Saigon Hi-tech Park, will produce vibration motors for mobile phones with the monthly capacity of 45 million units. The construction is implemented from July to December, 2012.
In the future, Vietnam will receive another well-known trademark from Japan JFE Steel, the sixth largest steel-maker in the world. JFE Steel in April announced possibility to acquire a major stake in Guang Lian Steel project invested by Taiwanese E-United Group in Dung Quat Economic Zone, central Quang Ngai province.
Le Van Dung, deputy director of Dung Quat Economic Zone Management Authority, said some JFE Steel suppliers in Japan also expressed to follow the steel-maker to invest in Dung Quat.
Vietnam and Japan already signed an agreement on comprehensive strategic partnership. Japan is the fourth largest export market of Vietnam following the US, EU and ASEAN. General Statistics Office statistics show Vietnam’s estimated export turnover to Japan in the first half this year was $6.4 billion, up 42.3 per cent year-on-year.
Another factor encouraging Japanese investment to Vietnam is the Japanese government’s strong support in helping Vietnam to improve its infrastructure. In total, Japan has provided 1.8361 trillion yen, or approximately $23 billion in official development assistance (ODA) to Vietnam since 1992 when Japan resumed providing ODA to Vietnam.
In Japanese fiscal year 2011, Japan provided 270 billion yen ($3.375 billion) in ODA for 16 projects in Vietnam, including projects which were carried over from the previous year due to the earthquake in Japan, and this marks a record high for Japanese ODA.