Number of profitable Japanese enterprises operating in Viet Nam rises

Thursday, Jan 20, 2022 08:07

A view of AEON - Tan Phu Celadon shopping mall in HCM City. — Photo AEON Vietnam

The proportion of Japanese enterprises operating in Viet Nam forecast to be profitable in business activities last year is 54.3 per cent, up 4.7 points compared to 2020.

This figure is part of a survey on Japanese investment in Asia and Oceania 2021. The Chief Representative of Jetro Ha Noi Takeo Nakajima presented the figure in Ha Noi yesterday.

In this 35th survey, the programme received responses from 702 Japanese enterprises operating in Viet Nam.

Notably, the survey period was from August 25 to September 24 last year, coinciding with the time when Viet Nam implemented strict social distance measures due to the COVID-19 pandemic.

Therefore, it affected the response results of enterprises, said Nakajima.

However, the number of Japanese businesses investing and operating in Viet Nam saying their profit improved reached 31.4 per cent, an increase compared to the last survey in 2020.

On the other hand, due to the impact of the COVID-19 pandemic, the recovery of businesses is slower than in other countries.

In particular, in the South and Central regions, more than 40 per cent of businesses answered that their operating profit "declined" due to the decrease in operating rates.

As for the manufacturing industry, the proportion of enterprises reporting a profit is 57.5 per cent; while non-manufacturing is 51.5 per cent.

Towards the new year, 56.2 per cent of surveyed businesses answered "improved" in terms of business profit prospects compared to last year.

The percentage of enterprises that intend to expand their business in Viet Nam in the next one to two years is 55.3 per cent, up 8.5 points from the previous year, ranking first in ASEAN and fourth in 20 countries in the survey, only behind India, Bangladesh and Pakistan.

The percentage of businesses wanting to expand operations in Viet Nam has decreased compared to before the pandemic, said Nakajima. However, this was the general trend in other markets, not only Viet Nam, due to the impacts of COVID-19.

Viet Nam was also a country where the rate of enterprises expanding production was higher than that of the ASEAN region, he added.

In terms of investment environment advantages, market capabilities, development potential; stable political and social situation; and high-quality staff are the highlights of Viet Nam compared to other ASEAN countries.

Although the minimum wage last year did not increase, wages in Japanese businesses grew by an average of 5.4 per cent.

Jetro's report also shows that businesses in Viet Nam are most interested in "saving energy and saving resources" in the trend of efforts to reduce greenhouse gas emissions.

There are few enterprises co-operating with Vietnamese start-ups (5 per cent) and enterprises intending to co-operate (3 per cent) but enterprises interested in co-operation is 30 per cent, higher than the average of the Asia and Oceania region.

Regarding the prospect of new capital inflows in the new year, Jetro believes that when international routes between the two countries are restored and stabilised, it would create a basis for Japanese enterprises to study Vietnamese business environment and make decisions. — VNS

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