He told about 20 Japanese business executives from Aichi Province at a meeting in HCMC o­n Tuesday (02 June 2006) that Japanese-invested companies had pledged some USD17.2 billion in around 1,100 projects but had disbursed more than USD5 billion to date.

Taiwan is Vietnam’s biggest foreign investor at the moment with more than 1,940 projects worth USD19.6 billion, followed by Malaysia with over 300 projects capitalized at nearly US$17.8 billion.

Japanese investors will quickly carry out their projects after they receive licenses, Nguyen The Hung, acting director of the Southern Foreign Investment Center (SFIC), told at the meeting, citing their thorough preparations as a key reason.

Many well-performing Japanese companies in Vietnam have increased capital, including Toyota, Honda, Nidec, Yamaha, Canon, Fujitsu, Sojitz, Sanyo and Sumitomo.

Hung said this showed the growing confidence of Japanese companies in the country’s investment environment and that this had helped attract more capital from elsewhere in the world.

Thang of the Foreign Investment Agency told the Daily that Japanese investors were showing increased interest in the service and distribution sectors in Vietnam after years of involvement in the industrial manufacturing, electronics, automobiles and hi-tech sectors.

Japanese firms are approaching the two sectors step by step through partnership with local firms since barriers to them began to be lifted early this year under Vietnam’s commitments to the World Trade Organization (WTO), he said.

Some distribution and service companies from Japan, including Mitsui, Best Denki, Sumitomo and Daiso, have entered the growing local market.

Mitsui & Co., Ltd. received an investment certificate for setting up a wholly-owned trading and distribution company in Vietnam in 2007, becoming the first foreign-owned trader to be licensed then. Mitsui & Co. Vietnam Ltd, a US$30-million subsidiary of the Japanese firm, can engage in export, import and local distribution operations.

Best Denki Corporation, o­ne of Japan’s leading electronics supermarket operators, has entered the local market under a franchising contract with Ben Thanh Marketing Co. The two partners plan to open 10 more electronics supermarkets in major cities after the opening of three.

Daiso, a popular Japanese convenience store operator, has opened a shop o­n the first floor of the FUSO duty-free supermarket in Moc Bai Economic Zone in Tay Ninh province through a franchise deal with HCMC-based Tri Phuc company.

Kyoshiro Ichikawa, senior investment advisor to the Foreign Investment Agency, said that due to the global economic crisis, Japanese investors had reduced investment activity abroad, including in Vietnam, since late last year.

But Japanese investors will expand their operations in Vietnam again when the crisis is over, said the Japanese national.