Japan makes its mark on the future of HCM City

Pham Thiet Hoa, director of the ITPC said the city is seeking companies from Japan to joint venture 10 sizable metro projects including two monorail projects, several waste water treatment facilities, a trade centre and a botanical garden in the city downtown area.

“The two monorails are quite sizable,” said Mr Hoa. The larger project has a proposed budget of US$1.33 billion while a smaller one has a US$715 million budget for a combined total estimated cost right at US$2.05 billion.

Meanwhile the Saigon Zoo and Botanical Garden in the city downtown area, currently under consideration, will span 460 hectares and set the city back nearly US$500 million, said Mr Hoa.

The city also wants to build a new trade centre in connection with the underground monorail system, he said. The figures that are being tossed around for the project cost are somewhere in the neighbourhood of US$312.05 million.

“There’s never been a better time for Japanese companies to invest in the city,” said Mr Hoa. “Our economy is growing, and more people are choosing to live, work, visit, and study here than ever before.”

“Ho Chi Minh City is on the move— and some great entrepreneurs from Japan are helping to power our economic resurgence, by building or expanding innovative businesses that are shaping its future.”

“I’m committed to bringing even more Japanese investment into our city,” said Mr Hoa, and to ensuring the commercial and cultural ties between the two parties as strong as can be expected.

The Japanese companies that invest in Ho Chi Minh City tend to be extremely large, diversified, multinational corporations, said a speaker from the Japan International Cooperation Agency (JICA).

Japanese parent companies that have invested in the city are also significantly diversified, he said. On average, they are active in 17 different industries, with some involved in as many as 149.

Further, he said, some of these companies have almost 600 foreign subsidiaries in 57 countries, although the average is 16 nations.

The parent corporations are focused mostly on Asia, which accounts for 42% of their foreign ventures, on average. Further, they are about equally invested in Europe and North America (23% and 24%, respectively), with only a small investment in South America (5%).

In general, the Japanese companies that invest in Ho Chi Minh City are successful and are active in a wide range of markets and in a large number of countries. Clearly, they are sophisticated organizations that are very familiar with investing and operating in international settings.

Through March, Japanese companies have invested US$2.87 billion in 865 enterprising ventures in the city, making them the sixth largest foreign investment group, said the JICA speaker.

The conference, convened by the ITPC brought together more than 100 participants primarily form the two regions – including investors, credit analysts, bankers, and underwriters.

It also featured presentations from private sector partners on the economic advantages of doing business in Ho Chi Minh City with extended discussion of the economic impact of the ASEAN Economic Community and the highly controversial Trans-Pacific Partnership (TPP).