Nobuo Kato, an analysis expert from the Japanese Ministry of Agriculture, Forest and Fisheries (MAFF), said on Dau tu that many Japanese enterprises have contacted him, saying that they are seeking places to set up cooking processing factories, which will provide products to the Japanese market after the earthquake and tsunami in March 2011. The destinations they are considering are China, Thailand and Vietnam.

As for Vietnam, the biggest problem for investors is seeking land areas large enough to carry out agricultural production with industrial way and high technologies.

“We have contacted Vietnamese partners, but the small scale of Vietnam’s agriculture development proves to be unsuitable to big scale production,” he said.

However, Japanese investors cannot wait for the amendment of policies to begin making investments. Some projects on food processing in small scale have been run by Japanese investors. Some investors are considering building processing factories in Vietnam together with developing material areas in Laos or Cambodia, so as to take full advantage of the conditions in the regional countries.

“Vietnam needs to pay more attention to develop the infrastructure in rural areas in order to grab the opportunity,” he said.

The name “Vietnam” has also been mentioned by Japanese investors recently when they consider making outward investments. However, Vietnam has to compete with many redoubtable rivals to become the destination of the investors.

To date, Vietnam has been highly appreciated by Japanese companies in the information technology and software outsourcing sector. However, according to Dau tu, some disadvantageous information has appeared which may lead to the fact that Vietnam would lose good outsourcing contracts.

Yukihiko Takeda, President and Chief Executive Officer (CEO) of Japanese Astmilcorp, said that new names have emerged on the world’s software outsourcing map, including Cambodia and Bangladesh, together with the existence of familiar names of China, India, the Philippines and Vietnam.

The noteworthy thing is that the two newly emerged names have the labor quality equal to Vietnam’s, but the labor cost is much lower.

“They are redoubtable rivals of Vietnam in the eyes of foreign investors,” said Mr Takeda, who stressed that Vietnam needs to rapidly improve the quality of the labor force in order to obtain new contracts from foreign enterprises.

He also stressed that Vietnam needs to apply the policies to attract foreign investors by offering simplified procedures. He said the “life circle” of a high-tech product is just six months to one year; therefore, investors would not wait months  just to fulfill investment registration formalities.

A recent survey conducted by the Vietnam Chamber of Commerce and Industry (VCCI) showed that more than 60 percent of foreign invested enterprises said it took them 56 days on average to fulfill investment procedures. This has been cited as an important reason which affects investment decisions of enterprises, especially high-tech product enterprises.

According to the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment, the total foreign direct investment (FDI) flow has been slowing down over the last four months. The registered FDI capital in the first four months of 2011 was 4.024 billion dollars (350 projects), which represents a decrease of 47.8 percent in comparison with the same period of the last year.

The implemented capital in the first four months of the year was also modest, estimated to reach 3.62 billion dollars, a slight increase of 0.6 percent over the previous month. HCM City, Hanoi remains the localities which have been attracting most of investments, though Vietnam is trying to attract FDI into difficult localities.

Edmund Malesky, Head of the provincial competitiveness index (PCI) research team, said on Phap luat that he understands well that Vietnam hopes to receive a new generation of foreign investors for its next stage of development. These should be the investors who bring high and environment-friendly technologies, pay high to workers and use domestic input materials.

However, in order to attract the investors, he said, Vietnam needs to make big changes and apply the policies attractive enough to them.

C. V