Japanese firms to get into the zone

illustration photo

“If there is demand, investment authorities would propose competent state agencies set up specific industrial zones (IZs) catered to Japanese firms which can fully satisfy their infrastructure needs,” said Ministry of Planning and Investment (MPI) Foreign Investment Agency head Do Nhat Hoang.

Explaining the idea of forming specialised Japanese firm IZs, Hoang said Japan came fourth among countries and territories investing in Vietnam.

“Unlike most other foreign investors who are keen on practical fields such as property, finance, banking or retail Japanese investors often concentrate on industrial and mechanical manufacturing fields which attract skilled workers, bring high added value and less susceptible to unexpected factors.

“Besides, success in forming specific IZs for firms coming from particular countries or regions would help Vietnam more appealing to international investors,” Hoang added.

According to Japan External Trade Organization (Jetro) Vietnam representative Nishikawa, more Japanese investors had headed Vietnam to source business opportunities this year.

“Like any others, Japanese investors seeking chances abroad often turn to fellow-businesses to source information. Therefore the best way to woo them is to offer best conditions to those already operating in the country,” he said.

“Besides, the MPI should consider the one-stop shop mechanism such as the one currently in place at the North Thang Long-Noi Bai IZ for these proposed Japanese investor IZs,” he said.

He argued despite high land rental rates, North Thang Long-Noi Bai IZ lured scores of investors thanks to its single-window model in administrative procedure settlement.

“If there are specialised IZs for Japanese firms, apart from supportive policies we need good infrastructure, particularly stable power supply,” said a representative from Inoue Vietnam Rubber Company Limited, a Vietnam-Japan joint venture.

“Our company incurred frequent power outages since early 2011. Sometimes power cuts were not earlier informed costing us losses of VND200-300 million ($9,600-$14,500) each time,” said the representative.

Hoang admitted unstable power was one hindrance keeping foreign investors away.

“IZs earmarked for Japanese investors would benefit from competitive service quality and infrastructure conditions, better than those at Haiphong’s Nomura or the North Thang Long-Noi Bai IZs,” Hoang said.