Japanese Companies Invest in Vietnam

Amid a lengthy investment spree in China, many of Japan Inc's biggest names are making inroads into one of the world's few remaining communist states: Vietnam.

Since last year, Vietnam has seen a spate of big investment projects by prominent Japanese firms such as Yamaha Motor Co and Mabuchi Motor Co, which invested US$48 million and $40 million, respectively. Nippon Sheet Glass Co's $145 million joint-venture factory with a local firm is also under construction, as is work on Canon Inc's new $70 million printer factory. Small and medium-sized Japanese firms are also flocking to Vietnam.

According to some analysts, in 2000, Vietnam ranked eighth among destinations for Japanese investment. However, in 2005, Vietnam was in fourth place, just behind China, India and Thailand. For Japan's small and medium-sized enterprises in particular, Vietnam was the second option, just after China.

In 2005, Japan invested about $400 million in a record high of 97 new FDI (foreign direct investment) projects in Vietnam on an approval basis. In terms of the value of investments made that year, Japan was the third-biggest foreign investor in Vietnam after South Korea and Hong Kong.

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