How to Attract Investment from Japan and Companies’ Concerns

Japanese investors highly appreciated Dong Nai’s investment climate. They placed an emphasis on such comparative advantages as human resources, geographical features, and infrastructure but expressed many a concern.

* Japan is ranked as the third biggest investor in terms of total investment projects in Dong Nai

Dong Nai is one of the four regions all over the country to attract the biggest volume of foreign investment.

Now, Dong Nai has more than 13,000 domestic companies and nearly 1,000 foreign companies that are in operation.

Dong Nai has 978 foreign investment projects with a total registered capital of US$19.4 billion that comes from 35 countries and territories.

The hugest investor is China with 306 projects and a total investment capital of over US$4.22 billion, followed by South Korea with 235 projects and a total investment capital of US$3.4 billion, and Japan with 98 projects and a total investment capital of US$1.9 billion.

The rest are the investors from ASEAN, the EU and the U.S.

Up to now, Japan has been the third biggest investor in Dong Nai. Dong Nai has attracted 100 investment projects.

In addition, the Japanese government has made ODA loans to Dong Nai’s major projects to assist the province in promoting the development of the infrastructure and maintaining sustainable development.

Those are the projects: Ho Chi Minh-Long Thanh-Dau Giay Expressway, Nhon Trach Phase-1 Water Supply Plant with a capacity of 100.000 cubic meters per day.

Other projects that are being taken into consideration are Nhon Trach Phase-2 Water Supply Plant, Wastewater Treatment and Drainage System for Bien Hoa City, Housing for Industrial Park Workers, and so on.

A Japanese investor is seeking for information on Dong Nai Center for Applied Biotechnology

“In a difficult context in which Japan is faced up with earthquake and tsunami aftermaths, Japan’s overseas investment declines but Vietnam remains one of the countries to receive Japan’s most investment promotion. As an economic leader in Vietnam, Dong Nai with great advantages has attracted Japanese investors” said Mr. Harumitsu Hida, Consul General of Japan in Ho Chi Minh.

In 2011-2015 period, based on sustainable development orientations Dong Nai’s GDP is expected to rise by 13 to 14 percent per year.

Dong Nai is required to attract more investment capital of different sources and modern technologies, especially investment in high-tech industries, in support industries, and in other sectors such as infrastructure and service constructions.

Meanwhile, the majority of Japanese companies show great potentials in capital and technology.

Japan’s investment projects tend to be implemented quickly and efficiently.

Japanese companies with investment in Vietnam always obey environmental protection rules and set up good community caring policies.

That is the reason why they have gained trust from local authorities.

Chairperson of Dong Nai People’s Committee Dinh Quoc Thai said: “Japanese companies, who are investors in Dong Nai, have made important contributions to the province’s socio-economic development and built both Dong Nai and Vietnam’s trust in production technologies, product quality, management experience, and behavioral culture. We highly appreciate Japanese investors’ great potentials. 100 Japanese investors in Dong Nai is the clearly-seen evidence that other Japanese investors might take a look at and then decide to choose Dong Nai as a destination.”

* Existing concerns:

Currently, there are 50 Japanese investors in 30 industrial parks in the province.

In late 2010, Japanese companies had 91 investment projects with a total investment capital of US$1.1 billion.

Japanese companies have employed more than 41,000 workers and been the hugest tax payer among the countries with investment in Dong Nai.

Japanese investors considered Dong Nai as a destination with a great investment climate and favorable priority conditions, but they expressed several concerns that a necessity to keep dealing with the province’s problems concerning foreign investment attraction is a must.

The conference to promote Japan’s investment in Dong Nai attracts a lot of companies’ attention

In terms of Dong Nai’s investment encouragement policies, a Japanese company said: “The support polishing and plating industry shows weaknesses in attracting investment, especially overseas investment. The industry needs to be clearly classified because it contains high-tech polishing and plating sector. We ask that for the plating and molding support industry local authorities need to check to select manufacturers that meet requirements for environmental pollution to license them.”

“Actually, Japanese investors not only take interest in Vietnam’s law but pay attention to common benefits. We always encourage each other and put forward solutions to environmental protection”, said he.

General Director of Ajinomoto Company and representative for the leadership of Japanese Companies Association Toshiyuki Nakane said: “Most of Vietnam’s power supply is mainly based on hydro power plants. Power outages occurred quite often last year due to insufficient rainfall, which caused a great impact on production activities. For manufacturers, power supply is like their blood. Thus, we expect a steady power supply.”

Also, he said: “A high inflation tends to result in an increase in the number of strikes. We investors hope that the provincial leadership will take effective measures to prevent it. With Cai Mep-Thi Vai in Ba Ria Vung Tau province’s coming into operation and that of Long Thanh International Airport in the future, Dong Nai will be able to attract attention in the area of goods traffic. However, Highway 51 is not good enough for goods traffic. Japan Companies Association has received a lot of questions concerning this problem from Japanese investors and we expect that plans to maintain and upgrade Highway 51 will soon be carried out.”

“Dong Nai is a region that attracts Japanese companies’ special attention. We hope that Dong Nai People’s Committee will take consideration into this problem to bring us a better and better investment climate”, said Mr. Toshiyuki Nakane.

* What are opportunities?

Mr. Keichi Muto, General Director of Toshiba Asia, a company specializing in manufacturing high-performance electric motors that are used in industries said that the reason why Japanese companies decide to invest in Dong Nai is that the province enjoys geographical advantages and is close to Ho Chi Minh city. This helps investors recruit qualified staff and gain an access to local and regional suppliers more easily, produce with affordable labor and energy costs, and transport their products to ports and then to the world market conveniently.

Looking forward to a better investment climate in Dong Nai, he said: “We hope that local infrastructure such as expressway and railway links, sea ports and an international airport will be invested in as planned. To improve Dong Nai’s investment climate, the province should have policies to strengthen power supplies and support industries by collaborating with suppliers. The province is required to enhance the training of human resources by providing laborers with sufficient basic employment knowledge and to reduce the rate of workers leaving jobs. In terms of administrative reform, it is necessary that the province has to upgrade infrastructure and have customs procedures computerized.”

General Director of Lotecco Toshio Kazama said: “There are many industrial parks in Dong Nai, but we only know about Lotecco and Amata. We see that local authorities’ investment attraction is being conducted ineffectively. If there are specific advertising campaigns, investors will find it easier to get information and decide to invest in Dong Nai. "

Reported by Thanh Minh, Translated by Duy Minh