Japanese investors have poured multi-billions of dollars into various business fields, from manufacturing and infrastructure development to retail and finance.
The country has always been among the biggest foreign investors in Vietnam since the two countries established diplomatic relationships 50 years ago.
Leaders of Nam Dinh province last August received representatives of the Sumitomo Group from Japan. One of the issues put into discussion at the meeting was the Japanese investor’s plan to develop an Industrial zone in the province with a total area of 300 hectares or more.
The global corporation has stockholder equity of $26.6 billion with hundreds of subsidiaries and affiliated companies all over the world.
In Vietnam, Sumitomo set up the Thang Long Industrial Zone (IZ) in 1997, Thang Long IZ II in Hung Yen province, and Thang Long Vinh Phuc IZ in Vinh Phuc province. The total area of the IZs is 1,012 hectares and the total investment capital is $404 million.
In Hanoi, Sumitomo cooperated with Vietnam’s BRG to develop a smart urban area in northern Hanoi, capitalized at $4.2 billion.
In Khanh Hoa, Sumitomo is the investor in the 1,320MW Van Phong 1 BOT thermal power project, valued at $2.58 billion.
In the financial market, Japanese groups have poured $6 billion to become the strategic shareholders of five commercial banks, and many finance companies, insurers, and fintechs.
Sumitomo Life spent $360 million to acquire 22 percent of shares at Bao Viet Group and act as the strategic shareholder of the insurer; it is considering injecting more money into Bao Viet in the time to come.
In late March 2023, VPBank sold 15 percent of its shares to Sumitomo Mitsui Banking Corporation (SMBC) worth $1.5 billion. Prior to that, in May 2022, VPBank and SMBC signed an MOU on business cooperation during the Japanese Prime Minister’s visit to Vietnam.
This was the next step taken by SMBC in its plan to increase its presence in Asia and consolidate digital banking, one of the key targets.
Two years ago, SMBC Consumer Finance acquired 49 percent of the charter capital of VPBank SMBC Finance (FE Credit).
Japanese bankers began eyeing Vietnamese commercial banks many years ago. In late 2012, the Bank of Tokyo-Mitsubishi UFJ (BTMU) spent $743 million to acquire 20 percent of the shares of VietinBank, one of the ‘big four’.
Prior to that, Mizuho Bank obtained 347 million shares, or 15 percent of the capital of Vietcombank in September 2011 at the price of $567 million. Eight years later, Mizuho continued to buy Vietcombank’s shares to maintain the 15 percent ownership ratio.
Mizuho and a group of investors poured $200 million into M_Service, the company that owns MoMo e-wallet. Meanwhile, Japanese SoftBank and Singaporean GIC invested $200 million in VnLife, the owner of the VnPay app.
Japanese began funneling capital into the Vietnamese financial market very early. In 2008, Daiwa Securities invested in SSI, and in 2010, SBI Holdings invested in TPBank. A member of SBI Holdings owns 24 percent of FPT Securities’ capital.
Japanese capital and Vietnamese brands
Analysts note that most strategic shareholders of Vietnamese banks are Japanese financial groups. The finance and banking sector has always been an attractive destination for Japanese investors and is also the Vietnamese business field that attracts the highest volume of Japanese capital.
Japanese financial groups are also the strategic shareholders of many other Vietnamese finance and insurance companies, including OCB, HD Saison, and MCredit.
More recently, Sai Gon-Hanoi Bank (SHB) signed agreements on transferring capital in SHB Finance to Thailand’s Ayudhya Bank (Krungsri), a strategic member of the Japanese MUFG.
ENEOS Corporation spent big money to acquire 169 million PLX shares of Petrolimex, which holds about 60 percent of the petroleum distribution market share. JX Nippon Oil & Energy Vietnam, a subsidiary of ENEOS, is holding 103 million PLX, or 7.7 percent of total shares.
Japanese also have bought into many Vietnamese large corporations in the fields of pharmacy, consumer goods, and fashion.
In Binh Duong, Vietnam’s Becamex IDC signed a cooperation agreement with AEON, the Japanese group that has opened hypermarkets in many cities and provinces throughout the country. In the past, AEON took over Citimart.
Economists note that after COVID-19, many Japanese corporations showed their interest in the Vietnamese market and are considering locating a part of their production lines in Vietnam.