Many
Japanese firms are considering moving their plants to Vietnam, after
devastating floods have damaged much of Thailand's industrial infrastructure.
The high risk of natural disaster and high
labour cost in Japan itself, and in China, have also urged the businesses to
revise their investment strategies, with relocating their manufacturing plants
being the top priority, Sai Gon Tiep Thi newspaper reported.
Than Thanh Vu, chair of investment consultancy
Sao Khue, said the number of Japanese firms visiting the industrial parks and
building plants in Vietnam has recently risen.
"Many Japanese business delegations have
visited HCM City or contacted the Japan External Trade Organisation to ask for
locations to build their facilities," he said.
"Their top priority when consulting about
a particular location is whether that place will be affected by floods."
According to a recent report by Bloomberg, a
number of Japanese plants in Thailand, including those of Honda, Canon, Nissan,
Hitachi and Toshiba, among others, have had to halt operation due to the
unprecedented floods, Thailand's worst in 70 years.
Japan is Thailand's largest investor, but now
many businesses have declared that they will move to other countries should
infrastructure there Thailand remain unimproved.
Vu, of Sao Khue Co, said that besides the
lower labour cost, another appealing factor of Vietnam to Japanese investors is
presence of cultural similarities between the two countries.
Meanwhile, with an early anticipation of an
investment flow from their country, many Japanese businesses such as Sojitz,
Daiwa House and Kobelco Eco-Solutions have invested a total of $100 million in
the Dong Nai-based Long Duc Industrial Park, expecting to receive around 150
[Japanese] businesses.
Japan's Jesco Holding Inc, which specialises
in engineering and infrastructure construction, last week also announced that
it would join hands with Hoa Binh Construction & Real Estate Corporation to
develop infrastructure for Long Hau 4 Industrial Park in the southern province
of Long An.
Itochu, Sumimoto, and Fujitsu, for their
parts, have also chosen Ba Ria - Vung Tau as their destination for investment,
while some others chosen Da Nang city, Quang Ninh, and Binh Duong provinces.
The Japan International Cooperation Agency is offering
funds to help Vietnamese industrial parks to upgrade infrastructure to meet the
requirements of Japanese investors, especially those operating in the
supporting industries, to build their plants there.
Tran Thi Huong, director of the Ba Ria - Vung
Tau Department of Industry and Trade, said many businesses from Kawasaki city
have recently shown interest in Vietnam's investment promoting policies aimed
at the supporting industries.
Many investment consultancies said that,
although Japanese investors have been increasingly interested in entering
Vietnam, it is unclear whether the country's infrastructure can meet all
requirements for the former to actually open their pockets.
Economic expert Le Dang Doanh said the problem
is whether Vietnam could solve the problems of workforce and infrastructure to
welcome the investment flow from Japan.
Nguyen Thi Xuan Thuy, a specialist in
attracting FDI for the industrial parks from the Vietnam Development Forum,
said the industrial parks should improve both infrastructure and marketing
strategies to attract investors.
Tuoi Tre
Business & Investment Opportunities
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