Japanese companies paying closer attention to Vietnam

Many Japanese companies are focusing their attention on Vietnam as an indispensable link in their supply chains, Deputy Ambassador of Japan in Vietnam, Shige Watanabe, told the 10th Vietnam – Japan Supporting Industries Exhibition (SIE) and the 14th Vietnam Manufacturing Expo (VME) in Hanoi on August 9 to 11.

The Deputy Ambassador affirmed that this is a result of Vietnam’s industrial development, diligent and skilled workforce, and substantial efforts by the Vietnamese Government agencies to improve the business and investment environment, as highlighted in the Vietnam-Japan Joint Initiative over the past 20 years.

The stable supply of raw materials and components in Vietnam enhances supply chain flexibility, reduces costs, and boosts the capacity of supporting industries, which will contribute to the continued growth of the domestic manufacturing industry.

The Japanese Government, including funding from the Japan External Trade Organization (JETRO), is assisting in the establishment of manufacturing plants for Japanese companies to strengthen supply chains. Vietnam is the country with the highest number of Japanese-funded enterprises. The Japan International Cooperation Agency (JICA) is also providing technical assistance to Vietnamese small and medium-sized enterprises (SMEs).

Japanese companies investing in Vietnam also have high expectations for improving technical capabilities and enhancing quality management at their Vietnamese partner enterprises.

“I hope the SIE will lead to new business cooperation between the two sides, with Japanese companies as buyers and Vietnamese companies as suppliers,” Deputy Ambassador Watanabe said.

Mr. Do Thang Hai, Deputy Minister of Industry and Trade, said supporting industries play a significant role in economic restructuring towards industrialization and modernization, contributing to enhancing workplace productivity, competitive capacity, and value creation, and increasing the contribution of the manufacturing and processing industry to the economic structure.

The SIE is among the most important trade and investment promotion activities, contributing to exploring cooperative potential between Vietnamese and Japanese enterprises in supporting industries. It provides practical opportunities for Vietnamese supporting industry enterprises to learn about new market trends and technological innovations and to directly engage with potential partners from Japan and the world, thus contributing significantly to the strong and sustainable transformation of the supporting industry in Vietnam.

2023 marks a new era, with non-stop changes in the economy, characterized by monetary policies from developed countries and growth pressures following the pandemic, which have stimulated the process of enhancing business operations and optimizing resources for both global and local enterprises.

Alongside challenges arising from the global economic instability, such as flexible exchange rate policies and strict regulation and supervision of the financial system, the trend of shifting production markets from China, Taiwan (China), and Thailand to Vietnam also promises to create investment opportunities and cooperation for companies in the manufacturing, industrial, and supporting industries.

In this context, the SIE and the VME are held to strengthen trade relations between businesses in Vietnamese and Japanese supporting industries and to promote the robust development of these sectors in Vietnam.

Mr. Takeo Nakajima, Chief Representative of the JETRO Hanoi Office, said that since 2004, with the aim of increasing the localization rate for Japanese businesses in Vietnam, JETRO has continually cooperated with the Vietnamese Government to hold the SIE each year, alternately in Hanoi and Ho Chi Minh City.

“This year marks the tenth edition of the exhibition in Hanoi, with 50 participating companies showcasing products in booths, including 22 Japanese companies that have invested in Vietnam and are seeking local suppliers, and 28 Vietnamese companies wishing to supply Japanese businesses,” Mr. Nakajima said. “This year, JETRO is coordinating with relevant Vietnamese agencies to organize networking activities to support Vietnamese suppliers. We hope that these networking activities will create opportunities for interaction between businesses, contributing to the development of Vietnam’s supporting industries and expanding trade between the two countries.”

Mr. Yip Je Choong, Senior Vice President, Commercial – Asia Pacific, Corporate Management at RELX (Singapore), a representative of RX Tradex Vietnam, said Vietnam is gaining a reputation as a top destination for new investment in manufacturing to meet the rapid increase in demand for both export and domestic consumption. “RX believes that exhibitions are one of the most critical platforms for international and domestic buyers and sellers to meet and create new business opportunities, while helping grow Vietnam’s capabilities and competitiveness,” he added.