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Japan invests in Vietnamese agriculture
Agricultural cooperation between Vietnam and Japan has been developing over recent years; last November the export of Vietnamese mangoes to Japan was permitted and subsequently, Japanese apples were licensed to be exported to Vietnam. At the end of last year, 25 tons of Japanese apples bearing the Aomori brand were officially exported to Vietnam and sold in Aeon supermarket chains.
Japanese fresh vegetables are also becoming more readily found in Vietnam and over the last two years increasing numbers of Japanese companies have arrived in the country seeking investment opportunities in the country’s agriculture sector.
FPT and Fujitsu recently announced the official completion of the FPT-Fujitsu Akisai Farm and Vegetable project, which applies cloud computing technology to develop smart agriculture. The project is the first time an information technology solution from Japan has been applied in agriculture in Vietnam.
According to Mr. Atsusuke Kawada, Chief Representative of the Japan External Trade Organization (JETRO) in Hanoi, in 2015 there were 38 Japanese enterprises seeking opportunities or conducting investments in Vietnam’s agriculture sector.
Figures from the Foreign Investment Agency show that last year Japan was the third-largest investor in Vietnam, with investment of $1.84 billion, accounting for 8.1 per cent of the total. Agriculture received among the greatest amount of this investment.
Another form of cooperation taking shape and becoming popular over recent years is for Japanese engaging experts to direct Vietnamese farmers or for Vietnam to send trainees to Japan to study Japanese practices and in some cases take over from older Japanese farmers. Japanese enterprises have also come to Vietnam to directly produce and export their production to Japan.
Apple of their eye
Despite its small-scale, scattered production, Vietnam remains an ideal destination for Japanese investors in the agricultural sector.
Since 2014 the Vietnamese and Japanese Governments have held high-level dialogues on bilateral agricultural cooperation and in August last year the two sides approved medium- and long-term goals of establishing an agricultural value chain in Vietnam, including growing, processing, transport, distribution, and marketing, to create the conditions for enterprises from the two countries to promote investment in the agriculture sector.
When products are exported to Japan their prices are competitive and investors can earn a handsome return. As natural disasters can be all too frequent in Japan, many Japanese firms also actively seek out other investment environments.
Mr. Kawada, also believes that as average incomes in Vietnam are increasing the demand for safe vegetables is rising and this represents a huge opportunity for Japanese enterprises to investing in the country’s agriculture sector.
The opportunities for cooperation between Vietnam and Japan in the future are enormous, especially in the context of both signing free trade agreements bilaterally and multilaterally at the regional and global levels, such as AFTA, ASEAN+ and, especially, the TPP.
In agriculture, Japan has committed to immediately eliminate tariffs on 78 per cent of agricultural imports from Vietnam under the TPP.
This offers Vietnam the chance to expand its export markets, improve access to the world’s largest markets, and participate in the global supply chain.
Publication date: 2/29/2016
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