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Over 200 foreign enterprises seek investment opportunities in Vietnam
Hai Yen 22:42, 2023/08/09
Recognizing Vietnam as an essential link in their supply chains, many Japanese companies are turning to Vietnam.

Over 200 renowned brands representing more than 20 top technology countries, including Japan, South Korea, China and Thailand, are participating in the 10th Vietnam-Japan Supporting Industries Exhibition (SIE) and the 14th Vietnam Manufacturing Expo (VME) 2023, which opened today [August 9].

 The delegates at the opening ceremony. Photos: Khac Kien/The Hanoi Times

The joint initiative of the Japan External Trade Organization (JETRO) in Hanoi and the Vietnam Trade Promotion Agency (VIETRADE), to be held from August 9 to 11 at the Hanoi I.C.E. Exhibition Center, aims to strengthen networking among enterprises in the Vietnam-Japan supporting industry and propel the advancement of manufacturing and industrial spare parts production in Vietnam.

"Within the events, 22 Japanese firms operating in Vietnam are looking for local suppliers, while 28 Vietnamese companies hope to offer their products and services to their Japanese peers," said JETRO's Chief Representative in Hanoi Takeo Nakajima.

Nakajima stressed that a prevailing challenge for Japanese companies is to find quality local suppliers, and the expo will serve as a platform to identify top-tier partners.

He cited a recent JETRO survey according to which the localization rate of Japanese companies in Vietnam  rose from 28% a decade ago to 37% in 2022.

 A part of the exhibition. 

"Despite this growth, it is still not commensurate with the pace of economic development of both countries," he said.

Over the past decade, Japan's trade volume with Vietnam has almost doubled. This strong expansion is evident when considering Japan's global trade, which grew by 25% over the same period. In 2022, Japan's direct investment in Vietnam increased by a remarkable 12% year-on-year to a total of US$4.6 billion.

Japan is currently one of Vietnam's most important economic partners, ranking third in value and second in number of projects.

Do Thang Hai, Deputy Minister of Industry and Trade, emphasized the key role of supporting industry in the country's economic restructuring towards industrialization and modernization.

He highlighted its potential to improve labor productivity, competitiveness, and value-added, while helping to increase the share of manufacturing and processing industries in the economy.

"As evidence of our recognition of the importance of the supporting industry, the Government of Vietnam is proactively executing the Supporting Industry Development Program from 2016 to 2025. This program aims to bolster local supporting industry enterprises by adopting international standards and quality management systems," Hai said.

He further explained that this strategy aims to enhance production and product reliability, gradually integrate into the global production and supply chain, and increase the localization rate in critical manufacturing sectors such as automobiles, textiles, footwear and electronics.

Hai expressed his belief that the ongoing exhibition would provide Vietnamese enterprises with tangible opportunities to familiarize themselves with emerging market trends and technological innovations, and to engage in direct interactions with potential partners from both Japan and the international arena.

"The strengthened cooperation will increase the overall bilateral trade volume and attract more Japanese investment efforts to Vietnam," he affirmed.

 Deputy Minister of Industry and Trade Do Thang Hai (fourth from left) and JETRO's representatives at the exhibition. 

Echoing Deputy Minister Hai's sentiments, Shige Watanabe, Minister of the Embassy of Japan in Vietnam, agreed that many Japanese companies are turning to Vietnam as an indispensable link in their supply chains.

"This is a result of Vietnam's industrial development, hardworking and skilled workforce, and substantial efforts by Vietnamese government agencies to improve the investment and business environment, as highlighted in the Vietnam-Japan Join Initiative over the past 20 years," Shige said.

Going forward, Shige suggested that a stable supply of raw materials and components in Vietnam could significantly increase the flexibility of the supply chain, reduce costs, and increase the capacity of supporting industries. This, in turn, would stimulate the growth of the local manufacturing sector.

"There is an unwavering commitment from the Japanese government and businesses to support Vietnam's ancillary industries. The Japanese government, together with institutions such as JETRO, is actively fostering the progress of Vietnam's supporting industries and facilitating the establishment of production facilities by Japanese enterprises to fortify the Vietnamese link in the supply chain. Vietnam continues to be a major recipient of Japanese investment. JICA [Japan International Cooperation Agency] provides technical assistance to Japanese companies operating in the country. At the same time, these Japanese companies expect to transfer technology and bolster quality management at their Vietnamese partners," Shige said.

Currently, Vietnam is home to approximately 2,000 companies involved in the production of spare parts and components. Of these, about 300 are integrated into multinational supply chains and contribute to the employment of more than 600,000 people. The number of enterprises operating in the support industry sector accounts for nearly 4.5% of the total number of enterprises in the processing and manufacturing sector.
TAG: Vietnam news Hanoi news JETRO Hanoi japanese companies vietnam supporting industries vietnam
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