JETRO: Japanese enterprises upbeat about profit opportunities in Viet Nam
VGP – Up to 64.1 percent of Japanese companies in Viet Nam expected profit in 2024, representing a year-on-year increase of 9.8 percent, said Matsumoto Nobuyuki, chief representative of the Japan External Trade Organization (JETRO) in Ho Chi Minh City.
Matsumoto Nobuyuki, chief representative of the Japan External Trade Organization (JETRO) in Ho Chi Minh City
This is the first time in five years that the percentage exceeded 60 percent mark, thanks to rising foreign orders and the expansion of the domestic market, which also shows the recovery of the Vietnamese economy.
Regarding investment from Japan in 2024, the majority of companies targeted strong domestic demand.
In terms of operating profit forecasts, 100 percent of the food and beverage industry responded that they will be profitable, and 83.3 percent of the finance and insurance sectors also responded that they will be profitable. On the other hand, the manufacturing sector has been slow to recover from last year, with few large projects.
One reason for this may be that administrative procedures are inefficient and it takes a considerable amount of time to obtain permits and approvals.
Although there has been no significant change in the number of Japanese companies visiting JETRO, many of them are only gathering general information rather than seeking specific investment advice. This suggests that many companies are considering investing in Viet Nam, but are taking a wait-and-see attitude because it would take more time than necessary to obtain permits and licenses even if they were to invest.
Matsumoto Nobuyuki said that interest in Viet Nam remains high.
If we look at the transfer of means of production from Japan and China to ASEAN countries between 2019 and 2024, there were 176 cases from China, including 90 to Viet Nam, 25 to Thailand, 16 to Indonesia, and 19 to Malaysia. In addition, there were 289 cases from Japan, including 106 to Viet Nam, 67 to Thailand, 43 to Indonesia, and 42 to Malaysia.
Viet Nam is a popular destination compared to other ASEAN countries, but as mentioned above, the number of projects has been declining recently due to the weak yen and problems with permits and approvals.
In order for Viet Nam to attract further investment, it is important to solve the problem of delayed administrative procedures as soon as possible, and we hope that by 2025 these problems will be overcome and investment from Japan in the manufacturing sector will return to pre-pandemic levels./.
