Japan Launches Major Industrial Investment Program for Six Sectors in Vietnam

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--The Japanese government has confirmed that it will conduct a major investment program in six key industrial sectors in Vietnam. The sectors that were selected are household electricity, food processing, shipbuilding, agricultural machinery, energy saving, and the automobile and spare parts production industry.

The selected areas fall under Vietnam's industrialization strategy and have been targeted to adapt to competition when the tariff barrier in the ASEAN free trade area is lifted by 2018. The six sectors were chosen from a group of 39, all with long-term growth potential.

A range of support industries serving the six key sectors also will be considered for financial assistance. Vietnam and Japan have created a supervisory system to monitor the program. Each sector will select two or three sub-areas where support is most needed. An action plan then will be designed for each area.

Plans also have been made for the establishment of two industrial zones in the northern and southern areas of the country to attract more Japanese investors.

Nguyen Thi Tue Anh, the head of Vietnam's Central Institute for Economic Management's Business Environment and Competitive Capacity Department, said that the food processing, agricultural machinery and shipbuilding industries have been unproductive and uncompetitive, despite their potential.

In comparison, the household electricity and automobile sectors have seen rapid growth, contributing to exports and attracting many Japanese investors. However, these sectors have focused mainly on the assembly phase due to lack of support in other areas of operation. Meanwhile, the environment and energy industry has displayed huge potential for producing energy saving products, she said.

She added that the expansion of the sectors should be closely linked with rising value, and supervised by the government through industrial policies.

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