Mitsubishi is to launch itself into the healthcare, retail, and high-tech agriculture markets in Vietnam in an attempt to cash in on growing local demands, but remain wary of the obstacles to success that lay ahead.
|Mitsubishi enters new sectors to grab bigger slice, Source: AFP |
Tetsu Funayama, president of Mitsubishi Corporation Vietnam, said that in a future development plan, retail and healthcare will be among the key targets of this business. “We plan to invest in developing central hospitals and local facilities under the public-private partnership (PPP) format by co-operating with central agencies and localities to meet demand for high-quality healthcare services,” Funayama said at last week’s Hanoi-based forum on Japanese enterprises eyeing Vietnamese businesses.
Mitsubishi’s plan is expected to benefit from Vietnam’s lucrative healthcare market, with the Vietnamese estimated to spend over $2 billion a year on healthcare abroad. Currently, Vietnam’s healthcare system is mostly publicly-financed, while privates make up only 5 per cent.
However, the Japanese group may have to wait as the Ministry of Health is still working on a circular to guide the development of PPP projects following the government’s Decree No.63/2018/ND-CP governing funding in the PPP format. Mitsubishi will also set up a joint venture with Fast Retailing, holding company of Uniqlo, to open the first Uniqlo store in Ho Chi Minh City in October 2019 before moving on to Hanoi. The corporation will hold 25 per cent in the venture, with its partner owning 75 per cent, in a move aimed to meet the demands of the middle-class.
Mitsubishi attempted to penetrate the Vietnamese retail market at the turn of the century when it partnered with Seiyu and Hanoi Foodstuff Company to open Seiyu supermarket. However, the co-operation failed, raising doubts about potential success of the latest venture. In other new schemes, Mitsubishi plans to expand in airports by joining development of the Long Thanh International Airport project under the PPP format. The firm is also studying the possibilities of investing in food processing, pharmaceuticals, high-tech agriculture, and cashless payment services.
Since opening representative offices in Hanoi and Ho Chi Minh City in 1991, Mitsubishi has gained success in utilising its traditional advantages. It is now investing in two power projects in Vietnam, namely the recently fast-tracked $2.2 million, 1,200 megawatt (MW) Vung Ang 2 and the 1,980 MW Vinh Tan 3.