Japanese investment in HCM City continues to rise

VGP –Ho Chi Minh City has experienced a spike of 226.1% in foreign direct investment (FDI) in the first two months of the year, primarily attributable to a high influx of Japanese businesses swarming into the city.

March 14, 2014 6:39 PM GMT+7

According to the Ho Chi Minh City’s Department of Planning and Investment,at present, Japanese businesses are keen on investing in Viet Nam, especially the southern key economic zones as established companies are adding capital and new projects are registering capital at an impressively high rate.

In line with this information, a report from Export Processing Zone (EPZ) and Hepza Industrial Park (IP), a series of Japan’s projects spearheaded the expansion into the city in 2013.

For example, Sai Gon Precision Co, LTd in Linh Trung IP, Tosok Co, Ltd, Nidec Tosok, Akiba Co, LTd and Juki Co, Ltd have increased their capital to $129 million, $95 million, $10 million and $12 million, respectively.

Notably, many other hi-tech international companies expanded their investment in Hepza including Roeders Viet Nam from Germany, Marvel Viet Nam Technology from Singapore and Kijima Musen Viet Nam from Japan.

Last year, total investment in Hepza IP peakedat $608 million, up 47% over the previous year. In 2014, investment in Hepza is expected to cap out at $550 million, up 10% compared to the 2013 plan.

According to the latest report by the Japan External Trade Organization (JETRO) on the Japanese businesses’ situation in Asia and the Ocean, 70% out of 435 Japanese businesses currently investing in Viet Nam have plans to expand operations in the country.

Over 50% Japanese businesses listed VietNam’s scale of market, growth capacity and political stability in Viet Nam as advantages.

In 2013, Japanese investment in Viet Nam increased from $2.57 billion to $2.78 billion. The report said that the Republic of Korea took the lead in terms of total new projects and expanded projects in Viet Nam.

However, last year, Japan continued to top in total investment with newly registered capital of US$5.74 billion, followed by Singapore, the RoK, China, Russia, Hong Kong and Taiwan (China).

According to representatives from Hepza, strong FDI inflows in EPZ and IP in HCM City in the early months of the year are primarily attributed to the fact that investors are gearing up for signing of the Trans Pacific Partnership Agreement.

In addition, HCM City’s investment environment has been steadily improving, resulting in a relocation of many FDI projects from other provinces to the city.

To entice increased investment capital in 2014, Hepza said that EPZ and IPs have set aside 408 hectares of land and 67,400 square metres of workshop areas for investors in IPs such as Tan Phu Trung, Dong Nam, An Ha, Hiep Phuc and Tan Thuan EPZ.

In addition, the Viet Nam-Japan Techno Park in Hiep Phuoc IP has been underway to attract investment from Japan’s small and medium-sized enterprises in the field of hi-tech support industry.

Last but not least, it is incumbent to streamline procedures of granting investment licenses, and conduct transparent and publicized administrative formalities, improve infrastructure facilities, and promote investment in green and hi-tech industry. - VOV