JETRO holds 5th Vietnam-Japan Exhibition on Supporting Industries in Hanoi and Vietnam-Japan Economic Summit
Revitalizing business matching between Vietnamese and Japanese companies
From September 4 to 6, 2013, JETRO organized the 5th Vietnam-Japan Exhibition on Supporting Industries in Hanoi at the Hanoi Cultural Palace in Vietnam. Aimed at assisting the development of supporting industries, which is promoted by the Vietnamese Government, and expanding local procurement by Japanese companies, this event has been held every year since 2004 alternately in the cities of Ho Chi Minh and Hanoi. This year marks the 10th occasion of this exhibition (the fifth in Hanoi).
The trade fair is positioned as a cooperative project based on the Japan-Vietnam Economic Partnership Agreement (JVEPA) which became effective in October 2009. This year a total of 111 companies took part, including 54 Vietnamese parts suppliers advertising their products to Japanese manufacturers and 57 Japanese buyers looking to procure parts locally. The number of visitors reached as many as 13,614, exceeding that of the previous year. During the three-day period, 3,042 business talks were held between companies of the two countries.
One Japanese company which has presented its products for the past five years described his impression in the following way: "Compared to previous times, more and more local suppliers understand and meet the requirements demanded by Japanese companies." Many other Japanese participants saw remarkable progress by local companies first hand through this exhibition. From Vietnamese participants, positive determination for further growth was shown, with comments such as "This fair offers an opportunity not only to find new customers but also, by showing our products, to be able to identify the needs of Japanese manufacturers," and "Through a close look at real products that Japanese companies are interested in and by having business talks with them, we can learn about their advanced technology."
Vietnam-Japan business matching expected to further develop
For Vietnamese companies, the track record of their supply to Japanese companies plays an important role in helping them to develop and improve their reliability. In this regard, Vietnamese suppliers also gave us comments such as "When starting business with Japanese manufacturers, we received guidance related to technics and management methods, which in turn builds up skills in our company as well as expands our supply capability," and "The trading record with Japanese companies helped us earn trust from other entities when we began business with them." Vice Minister Chan Tuan Anh of Industry and Trade also expressed his high expectation for more active partnership with Japanese companies in his address for the opening ceremony, stating that "From the perspective of fostering supporting industries of our country, there is a growing demand for business matching between Vietnamese and Japanese companies."
According to JETRO's "2012 Survey of Japanese-Affiliated Companies in Asia and Oceania," the local procurement rate of Japanese companies doing business in Vietnam still remains low at 27.9%.
In spite of their growth, it is still hard for Vietnamese companies to meet the strict requirements set by potential Japanese partners related to quality, technology and accuracy. However, as many Japanese companies expressed their desire to increase their procurement ratio from local companies for the purpose of cost reduction, business matching between both countries is expected to be further revitalized in the future.
Global supply chain and Vietnam
On September 5, during the exhibition period, the "Vietnam-Japan Economic Summit" was co-organized by the Vietnam Chamber of Commerce and Industry and JETRO, with many participants from governments and companies of the two countries.
In his keynote speech, Mr. Daisuke Hiratsuka, Executive Vice President of JETRO, demonstrated his recognition that attracting global companies on a larger scale requires Vietnam to reduce the domestic transport cost and incorporate itself into global supply chains. In particular, focusing on the importance of low cost transport and supply of intermediate materials, he emphasized the necessity to eliminate the customs within ASEAN countries through realization of the ASEAN Economic Community (AEC) and the Regional Comprehensive Economic Partnership (RCEP) in order to reduce this transport cost.