The 2016 Kyushu-Vietnam Economic Exchange Mission
Administration Group, Planning and Coordination Division
Mayor's Office, Omura City
(Formerly Industrial Exchange Unit Chief, International Affairs Division
Kyushu Bureau of Economy, Trade and Industry)
Kyushu Economy International (KEI) sent an economic exchange mission to Ho Chi Minh City over February 21-26. The mission comprised 46 members and was led by KEI Chair Yutaka Aso.
With markets in Japan expected to shrink as the population declines, Kyushu companies will need to cast their eyes offshore if they are going to survive and grow. A questionnaire survey of Kyushu firms undertaken by Kyushu Economy International (KEI)*1 in 2013 found that Vietnam was the overseas destination in which companies were most interested for the purposes of direct investment, direct trade, business tie-ups and technical cooperation, and also as a base for information gathering. (For indirect investment, Vietnam came just behind first-placed Thailand.)
With Vietnam at the forefront of Kyushu companies' minds, KEI sent an economic exchange mission to Ho Chi Minh City over February 21-26. The mission comprised 46 members and was led by KEI Chair Yutaka Aso. The 2016 mission was KEI's fifth to Vietnam, the last being in August 2013, with Kyushu companies surveyed beforehand in order to tailor the program to their exact areas of interest. Because companies indicated a strong interest in round-table talks and get-togethers with local Japanese affiliates and tours of these firms, KEI created a program comprising (1) round-table talks and get-togethers with experts and local Japanese affiliates; (2) tours of local Japanese affiliates; (3) a briefing at the JETRO Ho Chi Minh Office; and (4) the first Kyushu-wide business talks in the area of food and food processing. The results of that program were as follows.
Tour of Aeon Mall Tan Phu Celadon
This is the first Aeon Mall to be set up in Vietnam, opening on January 11, 2014 in the Tan Phu district, nine kilometers west of central Ho Chi Minh. The catchment area (within 15 minutes by motorbike) has a high residential density of 1.5 million people. Vietnam's first suburban shopping mall and also the biggest local commercial facility, Aeon Mall comprises three floors above ground and one below, with a gross retail gross floor area of about 50,000m² and parking for 4,000 motorbikes and 500 cars. The anchor tenant is Aeon General Merchandise Store, and there are also around 120 specialist shops.
After being briefed in a conference room on Aeon's business operations in Vietnam, we toured the mall.
Study meeting on the Vietnam market and investment environment (JETRO Ho Chi Minh Office)
A briefing from JETRO Ho Chi Minh Office Managing Director Hirotaka Yasuzumi and Project Director Fumihiro Okubo on Vietnam's political and economic situation was followed by a question and answer session. While Vietnam offers low personnel costs, a stable political situation, and an expanding market, little progress has been made with reforming state-owned enterprises and bank debt issues pose a risk, we were told.
Tour of Ho Chi Minh Subway Line No. 1 Line construction site
A joint venture between Shimizu Corporation and Maeda Corporation has landed the contract for Vietnam's first subway construction project. The CP1B construction site comprises 1.74 kilometers of the Ho Chi Minh Subway Line No. 1, including the Opera House station and Ba Son station. The joint venture is also building the Opera House and Ba Son station buildings. The contract is for around 23.2 billion yen, covering a contract period of 54 months, and uses Japanese ODA (yen loans).
After receiving a panel-based explanation at the construction site, we observed the construction work from openings above ground.
Tour of Vie-Pan Techno Park
This is an industrial park exclusively for Japanese small and medium enterprises, developed within Hiep Phuoc Industrial Park, the largest industrial park in Vietnam. It is located 15 kilometers from the center of Ho Chi Minh, one kilometer from the Saigon Premier Container Terminal, and 21 kilometers from the Tan Son Nhat International Airport. It also offers management functions such as personnel, accounting and logistics.
After a conference room briefing and a Q&A session on Ho Chi Minh industrial parks and the Vie-Pan Techno Park, we moved to the SPCT for a tour.
Courtesy call on the Japanese Consul-General in Ho Chi Minh
Mission representatives including KEI Chair Yutaka Aso, Kyushu Bureau of Economy, Trade and Industry Director-General Yoshio Kishimoto, Kyushu-Vietnam Friendship Association President Miyoko Yazu, Kita-Kyushu-Vietnam Association President Shunji Yamada, and Aeon Kyushu President Yuji Shibata exchanged views with Consul-General Satoshi Nakajima.
Tour of local human resource development institution (ESUHAI)
Established in 2006 by Mr. Le Long Son, ESUHAI operates: (1) an education and training program for local human resources; (2) a local technical intern program; (3) a program providing introductions for highly-skilled local engineers; (4) a domestic personnel introduction program; and (5) a comprehensive support program for Japanese businesses establishing operations in Vietnam. ESUHAI has 150 employees and 16 Japanese staff, with 1,200 students enrolled in the technical training course and 60 in the engineering course. Three thousand students have graduated from ESUHAI to date.
After a conference room briefing on ESUHAI, we observed technical training and advanced engineering classes and talked with students.
Tour of a Japanese company (Ajinomoto Vietnam's Long Thanh plant)
Ajinomoto Vietnam Co., Ltd. was established in 1991 and began producing Ajinomoto seasoning in 1992. The operation has pursued diversification, beginning to sell Aji-ngon (a seasoning extract for the Vietnamese market which is the Vietnamese equivalent of Japan's dashi stock and traditionally made from pork thigh bones and meat) in 2000, and a type of mayonnaise in 2005. Ajinomoto Vietnam has around 1,700 people on its payroll. The construction of the new Long Thanh plant doubled the company's Aji-ngon production capacity, further enhancing the parent company's offshore food operations.
After eating a lunch prepared from Ajinomoto products at the staff cafeteria, we were briefed on the Vietnam operation in a conference room, and then toured the plant.
Round table with experts and Japanese affiliates (Hotel Nikko Saigon)
Mission participants were divided among five tables-food and services; exports, imports and trade; logistics and warehousing; HRD and personnel introductions; and hotels and tourism-for round table discussions with experts and representatives from local Japanese affiliates introduced by the JETRO Ho Chi Minh Office.
Get-together with local Japanese affiliates and assistance institutions, etc.
Representatives from the Japanese Consulate-General in Ho Chi Minh, the Japanese Chamber of Commerce and Industry in Ho Chi Minh, the JETRO Ho Chi Minh Office, and Japanese affiliates in Ho Chi Minh were invited to this event, mingling with mission members.
Nhat Tan Bridge tour
A joint venture between IHI Infrastructure Systems Company and Sumitomo Mitsui Construction Company began work on the bridge in October 2009, completing in December 2014. The bridge was an ODA project funded by yen loans from the Japanese government. The Nhat Tan Bridge crosses the Red River in central Vietnam, taking a new highway into congested Hanoi. Featuring an unusual design even by international standards, Nhat Tan Bridge comprises a six-span cable-stayed bridge 1.5 kilometers long along with a 1.58 kilometer approach bridge, boasting a total length of 3.08 kilometers. Where it formerly took around one hour to travel from Noi Bai International Airport to downtown Hanoi, completion of the bridge has reduced this to 30 minutes.
An IHI representative boarded a bus with us at Noi Bai International Airport, explaining what we were looking at as we travelled into Hanoi.
Kyushu-Vietnam Economic Exchange: Round Table (Hanoi Daewoo Hotel)
Mission participants were spread among four tables to engage in round table discussions with the presidents and vice-presidents of the various sections of the Japanese Chamber of Commerce and Industry in Vietnam and representatives from Japanese companies. We discussed general topics such as business, lifestyle and culture in Vietnam.
Kyushu-Vietnam Economic Exchange: Case Report Meeting (Hanoi Daewoo Hotel)
Reports were given to representatives from the Vietnamese Ministry of Agriculture and Rural Development and the Ministry of Foreign Affairs as well as mission members, etc., on initiatives in Vietnam by Kyushu companies, etc. Presentations titles and speakers were as follows.
• "Efforts to transform Kyushu's agriculture, forestry and fisheries industries into growth industries"
Mr. Kawahara, Director, Office for Innovation and Support of Agriculture, Forestry and Fisheries, Kyushu Bureau of Economy, Trade and Industry
• "Trends among Vietnam's farmers and Saga University's agricultural assistance project in An Giang Province"
Associate Professor Kazunari Tsuji, Faculty of Agriculture, Saga University
• "Formation of K-RIP's Vietnam environment project"
Satoshi Tsuruta, Chair, Kyushu Recycle and Environmental Plaza (K-RIP)
• "Introduction to clinker roads: Creating environmental cities of the future using clinker ash"
Shinichi Umeki, Senior Vice President, Environment and Greening Conservation Consultant Co., Ltd.
Courtesy call on Japanese Ambassador to Vietnam
Mission representatives including KEI Chair Yutaka Aso, Kyushu Bureau of Economy, Trade and Industry Director-General Yoshio Kishimoto, Kyushu-Vietnam Friendship Association President Miyoko Yazu, K-RIP Deputy Chair Sakai, and Aeon Kyushu President Yuji Shibata made a courtesy call on the Acting Japanese Ambassador to Vietnam Jun Yanagi and exchanged views.
Courtesy call on Deputy Minister of Planning and Investment Nguyen Van Trung
Mission representatives went with Acting Japanese Ambassador Jun Yanagi to pay a courtesy call on Deputy Minister of Planning and Investment Nguyen Van Trung. Deputy Minister Trung noted that Vietnam was keen to study Japan's management and technology, etc.
Courtesy call on H.E. Mr. Truong Tan Sang
Mission representatives paid a courtesy call on His Excellency Truong Tan Sang, President of the Socialist Republic of Vietnam. The President noted that he wants to send more Vietnamese missions to Japan to Kyushu as well to promote investment in the Vietnamese economy.
Kyushu-Vietnam Economic Exchange: Reception (Hanoi Daewoo Hotel)
Foreign Investment Agency Director-General Do Nhat Hoang and other Vietnamese government representatives from the Ministry of Planning and Investment, Ministry of Foreign Affairs, Ministry of Agriculture and Rural Development, and Ministry of Natural Resources and Environment interacted with representatives from the Japanese Embassy, JETRO Hanoi, the JICA Vietnam Office, the Japanese Chamber of Commerce and Industry in Vietnam, and local Japanese affiliates.
Tour of Japanese affiliate (Takagi Vietnam)
Takagi Vietnam is the first overseas production base of the Takagi Group, the headquarters of which is in Kita-Kyushu City. The factory was established in November 2008 in Thang Long Industrial Park II in the outskirts of Hanoi, and launched production in December 2009. It has a total site area of around 24,000 square meters and a floor area of 3,000 square meters. Takagi Vietnam molds plastic components, assembles water-sprinkling products, and processes mold components, as well as developing and testing central water purification systems.
After a conference room briefing on the Vietnamese operation, we toured the factory.
Kyushu food business talks (Lotte Legend Hotel Saigon)
Business talks in the food products area were coordinated by local consultant VIT Japan Co., Ltd.
VIT Japan CEO Takahide Inotani came to Fukuoka before the mission to discuss the talks in detail with the scheduled participants. A total of 12 Kyushu companies took part in the event-six representing themselves, and six represented by the Liaison Council for the Promotion of Kyushu Agriculture as a Growth Industry and KEI, with the Liaison Council and KEI bringing along sample products from the three companies each was representing. Forty-four Vietnamese companies took part in a total of 160 business talks, which were so busy that participants barely had time to take a break.
The day before and after the event, VIT Japan took participants to visit restaurants and importers to engage in marketing and gather information.
With two companies immediately receiving offers from local companies following the talks, prospects appear bright.
Because of the priority on content, the mission schedule was packed right up until the last afternoon, and some mission members may have found it rather exhausting. However, the organizers were delighted with questionnaire responses, in which many participants noted that they had gained a real understanding of the local situation and were glad that they had participated. I would like to take this opportunity to express deep gratitude to everyone involved in realizing the mission.
*1 Kyushu Economy International (KEI): An umbrella organization for international economic exchange in Kyushu, KEI brings together local economic associations, local public bodies, and private companies to work on industrial exchange, tourism exchange and personnel exchange between Kyushu and the world with the aim of stimulating Kyushu's economy and promoting its independent development. The Secretariat is jointly operated by KEI and the Kyushu Bureau of Economy, Trade and Industry.
International Economic and Industrial Exchange Program (IIST)
(original article : Japanese)