VietNamNet Bridge – Experts have predicted a new wave of Japanese investment in Vietnam which would become realistic in the near future. Japanese need to rebuild their lives and resume their business activities, and they are considering building up new factories in foreign countries instead of reviving the factories in Japan from the scratch.
Unicharm, the Japanese company which specializes in making healthcare products last week announced that it has purchased nearly all the stakes of Vietnamese Diana Company. Unicharm is leading the diaper and toilet papers in Asia, holding 25 percent of the market share.
However, its market share in Vietnam remains modest. Therefore, Unicharm has been planning to penetrate the Vietnamese market. Meanwhile, Diana is now owning two well known brands – Diana for sanitary napkins and Bobby for paper diapers.
In an announcement released late last week, Diana said that the fact that Unicharm holds the controlling stakes will help Diana improve technology, develop products and boost exports through the network of Unicharm.
The representative of Diana declined to reveal the investment value, but said that Unicharm holds 34.2 million shares, or 95 percent of stakes of Diana. Meanwhile, Japanese Nikkei newspaper on August 25, reported that Unicharm has paid 128 million dollars, or nearly 2700 billion dong, to swallow Diana.
In the telecom sector, NTT, which was once the consultancy partner on 3G network for VinaPhone, has also taken the first official step after many years of eyeing the Vietnamese market by injecting 370 billion dong in VMG, a content service provider. It has also announced the plan to invest in the payment service companies and data centers.
Meanwhile, the list of the Japanese businesses which have invested in Vietnam through merger and acquisition has been regularly updated. These include Mizuho bank in the banking sector, Daio Paper in the paper production, Kirin in food and drink, SoftBank and NecSoft in information technology.
According to the Foreign Investment Agency, to date, 1572 Japanese investors have set up their projects in Vietnam with the total registered capital of 22 billion dollars. Japan now ranks the fourth in terms of foreign investment capital in Vietnam. In the first eight months of 2011 alone, 136 Japanese invested projects were registered; both newly invested and expanded projects, totaling 844 million dollars.
A lot of existing Japanese investors have announced their plans to expand business in Vietnam, including Yamaha which has decided to increase the investment capital by 26 million dollars to double the capacity of the factory in Hanoi.
Kyocera plans to invest 367 million dollars to build an electronic accessories and telecom equipments in Vietnam. JFE Steel plans to team up with a domestic partner to set up a joint venture.
Meanwhile, three Japanese groups Sojitz, Daiwa House and Kobelco Eco-Solutions have invested in the Long Duc Industrial Zone in Dong Nai. The investors have announced the ambitious plan to attract 100-150 investors to the industrial zone which has been scheduled to become operational from 2012. The zone is expected to become the locality that gathers Japanese enterprises.
Dr Vo Tri Thanh, Deputy Director of the Central Institute for Economic Management (CIEM), said that Japan has expressed its willingness to set up the industrial zones, specifically reserved for Japanese enterprises in a plan to concentrate investments.
Thanh went on to say that if the Vietnam-Japan Joint Initiative can be stepped up, the Japanese capital flow to Vietnam will become effective. The heightening of the partnership relation between Vietnam and Japan would be an important step in the plan to attract the foreign direct investment flow from Japan in the time to come.
Le Dang Doanh, a well known economist in Vietnam, also believes that the Japanese investment would increase significantly, because many Japanese enterprises which were damaged in the catastrophes have to relocate their factories. Meanwhile, many enterprises want to seek industrial partners, while Vietnam proves to be a good destination.