Japanese investors promote strategic cooperation deals in Vietnam

Japanese investors promote strategic cooperation deals in Vietnam

Japanese investors continue to place high hopes on the Vietnamese market, stepping up strategic partnerships and new investments.

In mid-August 2024, Mitsui & Co, Ltd. (Mitsui) and Tasco announced the completion of an agreement for Mitsui to become a strategic shareholder of Tasco Auto – a subsidiary of Tasco – and to partner with Tasco Auto in implementing various development plans and strategies in the future. The investment was disbursed in installments, with the first installment completed on July 31, 2024.

In early August 2024, Marubeni Group, through its subsidiary Marubeni Growth Capital Asia Pte. Ltd. (MGCA), acquired additional shares in Asia Materials Joint Stock Company AIG (AIG). This is the next step following MGCA's acquisition of a minority stake in AIG, announced in November 2023.

AEON Entertainment, a subsidiary of Japan's AEON Group, has formed a joint venture with Beta Media to invest in 50 new cinema complexes by 2035, with an investment cost of tens of billions of yen (equivalent to $200 million USD). AEON Entertainment's expansion plan aligns with its strategy of identifying Vietnam as its second key market alongside Japan for increased investment.

Similarly, Sojitz has developed a diversified business spanning retail, wholesale, and distribution to food processing in Vietnam. Sojitz also plans to invest in digital transformation to improve supply chain efficiency and create new business opportunities in Vietnam. To achieve this goal, Sojitz invested in the Vietnamese fintech company Finviet in April 2024 after acquiring full ownership of Dai Tan Viet Joint Stock Company.

Masataka “Sam” Yoshida, Global Director of Cross-Border M&A Services at RECOF Corporation, shared that in many cases, strategic goals such as achieving a dominant position in the Vietnamese market cannot be achieved through a single transaction. After making initial investments, Japanese companies begin to seek further opportunities such as distribution channels after investing in manufacturing, maintenance services after investing in sales, or the Northern market after entering the Southern market.

"We have witnessed a continuous flow of investment from Japanese strategic investors to acquire established Vietnamese companies in sectors such as retail, wholesale distribution, and packaging," said Yoshida.

According to Mr. Yoshida, Japanese companies are becoming more active in areas such as manufacturing, logistics, and distribution. Many Japanese corporations are beginning to prioritize Vietnam as a regional supply hub, instead of China or Thailand. Some companies are also making efforts to penetrate or expand into the Vietnamese market amidst increasing global competition.

A survey published in May 2024 by the Japan Trade Promotion Organization (Jetro) showed that Vietnam had the second highest percentage (24.9%) of Japanese companies planning to expand overseas, after the United States. Regarding large corporations planning overseas expansion, Vietnam ranked second (28.6%), after India (29.5%). Approximately 24.1% of Japanese small and medium-sized enterprises (SMEs) planned to expand into Vietnam.

Mr. Matsumoto Nobuyuki, Chief Representative of Jetro in Ho Chi Minh City, shared that while China topped Jetro's 2020 survey on the percentage of Japanese businesses planning to expand their operations, Covid-19 presented an opportunity for companies to recognize the need to diversify their supply chains, rather than relying too heavily on China. After considering markets in ASEAN, many companies chose Vietnam, making it the second most preferred destination after the United States since the 2021 survey.

In the first eight months of the year, Japanese investors poured $2.5 billion into Vietnam, a 90.4% increase compared to the same period last year. The majority of new investments were in LNG power plant projects, demonstrating strong interest from Japanese investors in infrastructure. Expansion investments also grew, proving the increasing demand for expansion from Japanese investors.

Source: https://baodautu.vn/nha-dau-tu-nhat-ban-day-manh-cac-thuong-vu-hop-tac-chien-luoc-tai-viet-nam-d224973.html