The industrial path less traveled Japanese investors are looking beyond traditionally strong hubs for investing and expanding in  Representatives of Japanese businesses make queries at an event to introduce investment opportunities in Ba Ria - Yazaki EDS Vietnam (YEV), a Japanese producer of cable harnesses, has finally decided on a location for its expansion plans in In its previous expansions, it had set up plants in This time, however, YEV chose the Co Chien Industrial Park (IP) in YEV plans to invest nearly US$47.4 million in the new facility, which is expected to employ 4,000 workers. YEV general director Sawairi Makoto said the switch was made to grab the opportunity offered by the ongoing development of transport infrastructure between Tra Vinh and “Tra Vinh is accelerating the development of communication infrastructure… which will facilitate goods transport in the future,” he said. Other advantages, according to Makoto, include cheaper land rent and greater availability of workers compared to other provinces with higher concentration of plants like Dong Nai, Binh Duong or those in the vicinity of Hanoi. YEV is not the only Japanese business to move out beyond the traditional economic and industrial hubs the country. Nidec Group, which has plants in Tan Thuan Export Processing Zone and Hi-Tech Zone, both in HCMC, last year broke ground for a $40 million facility in Furukawa Automotive Parts Vietnam, another Japanese company, increased its investment in Giao Long IP to $34 million from $18 million last year. Risk diversion Japanese companies are turning their attention to Southeast Asia, including Japanese investment made up 40 percent of the $13 billion FDI in Sawairi said YEV’s move in He said that while typhoons hurt the operation of YEV’s plants in the northern city of He believed the new plant in Tra Vinh would help better assure customers of supply, since the location is rarely affected by storms or floods. The concerns over floods and high tides are issues that have been raised quite regularly in recent meetings between Japanese business representatives and local governments in many provinces. Huynh Van Nuoi, director of Ben Tre IP Management, said the number of Japanese investors looking to open facilities in the province has increased sharply recently. They are interested not only in the agrarian advantages of the Mekong Delta province, but also in mechanical and spare parts manufacturing for the car and electronic industries, he said. Some of the investors already have facilities in well known industrial locations like HCMC and the adjacent provinces - Binh Duong, Dong Nai and Long An, Nuoi said. Yasuzumi Hirotaka, managing director of the Japan External Trade Organization (JETRO), said that many Japanese investors have started to look beyond the regular destinations for expansion. The Mekong Delta, as well as Binh Phuoc and Lam Dong provinces, are in their sights because of improved transport infrastructure linking these areas with HCMC, he said. “The new The shortage of land, higher rent and shortage of human resources are other factors that discourage investors from expanding business in popular industrial areas, some experts said. Even so, for the investors, the decision is not easy. ‘Not simple’ Sawairi of YEV said his company tested the waters by leasing existing facilities for piloting production in Tra Vinh before deciding to build their own plant there. “It’s not simple to get Japanese investment,” said Nuoi, adding that it took his agency two years to convince Furukawa, which wanted detailed information about all aspects of their investment, including human resources, infrastructure and the province’s commitment of support in overcoming hurdles, Nuoi said. “Even after we responded with complete information… a Furukawa representative would come every two weeks to check if what we said was true.” Furukawa finally opened its production plant in Giao Long IP in 2008. Four years later, Nidec Group took Furukawa’s recommendation to invest in the same IP. However, while the abundance of workforce is a plus, their quality remains a concern. Furukawa and Nidec have had to most of the job training for their workers. “We can’t meet the demand of skilled workforce,” Nuoi said.
Thanh Nien News |
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