In the first month of the year, three Japanese enterprises, Kyoshin, Katolec Global Logistics and Sews-Component Vietnam II, came to Vietnam with hundreds of million of dollars to build factories.

In the retail sector, Ryohin Keikaku Group recently announced the plan to set up a business in Vietnam, slated for the third quarter. The retailer considers Vietnam a key market in ASEAN with high stable GDP growth rate of 7 percent per annum.

The promising market was also the reason Aeon Vietnam decided to open more shopping malls in the near future, according to Aeon Vietnam’s CEO Nishitohge Yasuo.

Japanese capital has entered Vietnam not only under the mode of FDI (foreign direct investment), but also via M&As. Sojitz, for example, though having 400 subsidiaries and affiliate companies, has been buying into many Vietnam’s companies.

In 2018, Sojitz spent $91 million to acquire 95 percent of shares of the Sai Gon Paper Company, the biggest paper manufacturer in Vietnam.

In the real estate sector, Nishi Nippon Railroad in July 2018 teamed up with Vietnamese partners, Nam Long, TBS Group and Tan Hiep Investment Co Ltd, to establish a joint venture to develop an urban area project in Long An province. The project covers an area of 355 hectares with the capital contribution of VND6.9 trillion in the first phase.

Explaining the Japanese investment expansion in Vietnam, Kitagawa Hironobu from Jetro Hanoi said Japanese businesses have been making a profit in Vietnam and hope revenue will continue increasing this year.

He said Vietnam has many favorable conditions to attract FDI, including a cheap labor force and an increasing number of domestic suppliers. The CPTPP (The Comprehensive and Progressive Agreement for Trans-Pacific Partnership ) is also attracting Japanese investors.

A survey by Jetro released in early March confirmed that Vietnam brings high revenue and profits to enterprises. More than 65 percent of Japanese enterprises in Vietnam make a profit and 69.8 percent will scale up their business here.

Japanese investors who came prior to 2010 also have plans. More than 67 percent of these investors plan to expand their business and are most interested in the service sector.

At present, Japan ranks second among the top foreign investors in Vietnam. However, the position may change in the future as Japanese enterprises seek new opportunities.

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