Long An province ticks all the right boxes for Japan firms

Long An province bordering Ho Chi Minh City is an ideal location for business expansion beyond Japan, Japanese businesses said on Friday.

“We did the right thing 14 years ago by selecting Long An to build a brewery,” said Sapporo Vietnam Company Ltd. CEO Katsuhiko Usui.

“Long An has good water resources for brewing beer. It is also closed to major ports and has overland connections with Ho Chi Minh City, the largest market in Vietnam,” he told the Japan-Long An investment promotion conference co-held in the Mekong Delta province by the provincial administration and Japan’s Consulate General in HCMC, in collaboration with the Japan External Trade Organization (Jetro).

“Provincial officials have given their full support to Sapporo. Not just that, the people here love Sapporo and have dubbed it 'Long An beer'.”

The Japanese brewer started building its 6.5-hectare factory in Long An in 2009, and the facility started operations in 2011. Katsuhiko said the Japanese beer has become an established brand in southern Vietnam, and he himself, as a member of the Japanese Business Association in Ho Chi Minh City (JBAH), knows via talks with other JBAH members that Japanese firms prefer Vietnam as an investment destination beyond Japan.

Matsumoto Nobuyuki, head of Jetro’s HCMC office, echoed Katsuhiko at the conference. “In a business study by Jetro Tokyo from January to June this year, 60% of Japanese businesses surveyed said they wanted to expand their business or establish a presence in Vietnam,” he said.

The top reasons for Japanese companies to choose another country as an investment destination are the market size, labor costs, and market stability, he said, adding that today’s market size in Vietnam is about 100 million people, making it attractive to Japanese companies.

For southern Vietnam, Japanese businesses prefer HCMC and the surrounding provinces of Binh Duong, Dong Nai, and Long An, the Jetro representative said. Among the three provinces, Long An is now more potential among Japanese investors as it is seeking to emerge as a new FDI magnet.

Matsumoto mentioned its transparent and supportive management, good infrastructure facilities for investors, and ability to efficiently provide human resources.

He noted that Vietnam as a whole needs to improve English skills among workers to attract more FDI, and Japanese-speaking workers would be sought after by Japanese investors. He stressed the Japanese government is providing support for Japanese teaching programs overseas, including Vietnam, because today fewer people globally speak Japanese than previously.

The Japanese government also provides support for human resources development in foreign countries to help Japanese firms abroad. “That’s why Jetro will organize a job promotion day in Ho Chi Minh City on November 4 this year,” Matsumoto said.

He noted that those Japanese investors who choose Vietnam are those seeking to diversify their supply chains, including electronics makers.

Matsumoto's advice for Long An in particular and Vietnam in general was to focus on developing schools and hospitals that can serve the families of Japanese people living in Vietnam.

“In the south, many Japanese people live in Ho Chi Minh City because it is home to international schools and hospitals with doctors, medical teams and staff able to speak English and provide English medical records.”

He noted that in Long An now, maybe a hospital is still unable to provide medical records in English. Matsumoto said about 100,000 Japanese are living in southern Vietnam but most stay in HCMC.

Addressing the conference, Ono Masuo, Japanese Consul General in HCMC, said the event aimed at helping Long An lure more Japanese investors in various areas. He said the province conveniently connects with HCMC and the entire Mekong Delta, and is seeking to become a new industrial and development destination in the south.

Long An plans to establish 17 new industrial parks (IPs), bringing its total to 51 by 2030, with a total area of nearly 12,500 hectares, according to the provincial People’s Committee. The 17 new IPs will cover nearly 3,200 hectares altogether.

This would leave Long An trailing only Binh Duong province in terms of IPs. The move is expected to create more favorable conditions and significant investment opportunities for both Vietnamese and foreign companies.

Talking to The Investor at the conference, Brent Beachler, deputy CEO of Tan Duc Investment Corp., the developer of Tan Duc IP in the province, said his company is also supported by provincial authorities.

Like Beachler, Phan Van Chinh, deputy CEO of Vietnamese industrial real estate developer IDICO JSC, told the event his firm had received full support from Long An to build the Huu Thanh IP on 524 hectares in Duc Hoa district. The IP is about 35 km from HCMC’s Tan Son Nhat International Airport, and 50 km from the city’s Cat Lai port, one of Vietnam’s busiest container terminals.

Beverage giant Suntory Pepsico will build its latest Vietnamese factory in the IP, said Chinh.

On July 25, Suntory Pepsico Vietnam received an investment certificate for this $188 million manufacturing plant at a major event held to announced Long An’s development master plan until 2030, with vision extended to 2050, attended by Vietnamese Prime Minister Pham Minh Chinh.

The beverage giant now operates factories in HCMC, Can Tho city, Quang Nam, Bac Ninh, and Dong Nai provinces. The newest factory in the central province of Quang Nam has an annual capacity of 850 million liters of beverages and investment of $56 million, and was inaugurated in June 2017.

Also on Friday, Japan’s Ibaraki Prefecture and Long An province signed a joint statement for bilateral cooperation. The Japanese Consul General witnessed Ibaraki Prefecture Governor Oigawa Kazuhiko and Long An Chairman Nguyen Van Ut ink the partnership, which will focus on boosting labor cooperation. The Vietnamese province is also working to lure more investors from the prefecture and Japan.

Since 2020, Long An has sent nearly 1,100 workers to work abroad, with about 980 heading to Japan, according to provincial data. The province expects higher numbers thanks to its new cooperation with Ibaraki Prefecture.

“From the bottom of my heart, I’d like to see us harvest great fruits from this partnership,” the Ibaraki governor told the conference.

Ibaraki Prefecture and Long An will expand cooperation in economics, trade, investment, tourism and other areas to maximize this new partnership, he added.

The prefecture, which is part of the Greater Tokyo Area, has many agriculture and industrial companies, which matches Long An’s development orientations until 2030 and beyond. This will help the partnership reap success, said the Ibaraki governor.