Japanese Trade and Investment on EWEC Countries

Japanese Trade and Investmenton EWEC Countries

Masami IshidaBangkok Research Center, JETRO

Outline of Presentation• PART I Statistics on Trade & Investment Trade Relations between Japan and EWEC Countries Investment from Japan to EWEC Countries Sub-conclusions• PART II Case Studies Case Study of Transport between Bangkok and Hanoi Case Study of Trading with a Fabric Company in

Savannakhet Case Study of an Instant Noodle Company in Danang• PART III Prospects after the Third Mekong

Friendship Bridge

PART I Statistics on Trade & Investment

Trade Relations between Japan and EWEC Countries

Outline of Trade Relations1995 Rank 2000 Rank 2005 Rank 2010 Rank

Vietnam 921 39 1,974 29 3,593 25 8,181 19Lao PDR 29 129 22 136 19 142 62 120Thailand 19,698 8 13,627 10 22,490 6 34,236 6Myanmar 156 69 196 68 92 98 264 78

1995 Rank 2000 Rank 2005 Rank 2010 RankVietnam 1,715 35 2,638 28 4,539 25 8,178 19Lao PDR 7.3 143 52 85 106 81 209 73Thailand 10,126 11 10,591 11 10,590 11 21,041 11Myanmar 94 76 119 69 204 62 389 61

Source: Data of Customs in Japan of World Trade Atlas.

<Trade from Japan to EWEC Countries>

<Trade from EWEC Countries to Japan>

Trends of Trade with EWEC Countries

1995 2000 2005 20100.0

5,000.0

10,000.0

15,000.0

20,000.0

25,000.0

30,000.0

35,000.0

40,000.0

Thailand

Japan --> Thailand

Thailand --> Japan

1995 2000 2005 20100.0

1,000.0 2,000.0 3,000.0 4,000.0 5,000.0 6,000.0 7,000.0 8,000.0 9,000.0

10,000.0

Vietnam

Japan --> Vietnam

Vietnam --> Japan

1995 2000 2005 20100.0

50.0

100.0

150.0

200.0

250.0

300.0

350.0

400.0

450.0

Myanmar

Myanmar --> Japan

Japan --> Myanmar

1995 2000 2005 20100.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

Lao PDR

Japan --> Lao PDR

Myanmar --> Japan


Trade between Japan and Vietnam


23.1%

14.3%

6.5%22.5%

16.7%

4.5%3.6% 8.7%

Japan --> Vietnam (2010)

Metal & Non-metaland Their Products

Chemicals

Textile and Its Products

General Machinery

Electric Appliances

TransportEquipment

PrecisionMachinery

Others

12.9%

10.8%

11.8%

16.8%17.3%

12.2%

2.6%15.6%

Japan --> Vietnam (2000)Metal & Non-metaland Their Products

Chemicals


General Machinery

Electric Appliances

TransportEquipment

PrecisionMachinery

Others

21.2%

6.8%

22.5%

2.2%

25.5%

7.8%

3.3% 8.6%

2.0%

Vietnam --> Japan (2000)


Chemicals


General Machinery

Electric Appliances

Others

Miscellaneous Goods

Mineral Fuel

Food & Beverage

12.5%

9.5%

6.1%

5.8%

17.1%10.0%

7.8%

22.4%

8.8%

Vietnam --> Japan (2010)


Chemicals


General Machinery

Electric Appliances

Others

Miscellaneous Goods

Mineral Fuel

Food & Beverage

Trade between Japan and Lao PDR


4.4%

7.1%

28.7%

2.0%

48.4%

9.3%

Japan --> Lao PDR (2000)Metal & Non-metaland Their Products

Chemicals

General Machinery

Electric Appliances

Vehicles

Others

8.3%1.9%

23.5%

7.4%

52.8%

6.0%

Japan --> Lao PDR (2010)Metal & Non-metaland Their Products

Chemicals

General Machinery

Electric Appliances

Vehicles

Others

93.7%

4.8% 1.5%

Lao PDR --> Japan (2000)


Textile and ItsProducts

Miscellaneous Goods

15.1%

28.6%

28.3%

24.3%

3.8%

Lao PDR --> Japan (2010)

Metal & Non-metaland Their ProductsTextile and Its

Products

Others

Miscellaneous Goods

Food & Beverages

Trade between Japan and Thailand


15.8%

11.7%

23.6%28.0%

9.1%

4.4%7.3%

Japan --> Thailand (2000)


Chemicals

General Machinery

Electric Appliances

Vehicles

Precision Machinery

Others

22.2%

12.0%

22.7%

19.3%

12.9%

4.1%6.8%

Japan --> Thailand (2010)


Chemicals

General Machinery

Electric Appliances

Vehicles

Precision Machinery

Others

21.7%

8.7%

11.0%

3.8%6.8%17.4%

20.8%

1.6%3.2% 5.2%

Thailand --> Japan (2000)


Chemicals

Food & Beverage

Textile and ItsProductsMiscellaneous Goods

General Machinery

Electric Appliances

Vehicles

Precision MachineryOthers

17.6%

10.3%

17.1%

2.6%3.6%15.6%

18.7%

5.1%3.9%

5.5%

Thailand --> Japan (2010)


Chemicals

Food & Beverage

Textile and ItsProductsMiscellaneous Goods

General Machinery

ElectricAppliances

VehiclesPrecision Machinery Others

Trade between Japan and Myanmar


6.9%4.4%

2.2%

1.6%

59.2%

11.9%

11.5%

2.3%

Japan --> Myanmar (2000)

Miscellaneous Goods


Chemicals


General Machinery

Electric Appliances

Vehicles

Others

3.5% 3.6%

14.6%

3.7%

44.3%

4.3%

21.3%

4.8%

Japan --> Myanmar (2010)

Miscellaneous Goods


Chemicals


General Machinery

Electric Appliances

Vehicles

Others

50.3%

9.3%

19.7%

4.6%9.9%

6.2%

Myanmar --> Japan (2000)

Food & BeveragesMetal & Non-metal

and Their Products


Miscellaneous Goods

Others

Animal & vegitable Oil

21.0%

6.4%

4.1%

47.4%

20.3%

0.9%

Myanmar --> Japan (2010)

Food & Beverages



Miscellaneous Goods

Others

Animal & vegitable Oil

Investment from Japan to EWEC Countries

Japanese Investment in 10 YearsNumber Rank US$ million Rank Notes

Vietnam 3 14,640.4 5 Top: Korea (N); Malaysia (U)Lao PDR 43 ≧7 437.3 ≧6 Top: China (N); Vietnam (U)Thailand 1 28,396.8 1 2nd:Singapore (N); US (U)Myanmar 2 11 7.4 12 Top: China (N); China (U)

Number Rank US$ million Rank NotesVietnam 475 3 12,524.5 4 Top: Korea (N); Malaysia (U)Lao PDR 19 ≧8 424.1 5 Top: China (N); Vietnam (U)Thailand 1,592 1 15,871.4 1 2nd:Singapore (N); US (U)Myanmar 0 13 0.0 13 Top: Korea (N); China (U)

<2006-10>

<2001-10>

Source: 1) Vietnam; CSO (Various Years) and JETRO (Various Years). 2) Lao PDR; Japan ASEAN Center (2009) and JETRO Correspondent. 3) BOI and JETRO (Various Years). 4) Myanmar; CSO (Various Years).

Trend of Investment from Japan

2000 2005 201010.0

100.0

1,000.0

10,000.0

020406080100120140160180

80.6163.0

102.0120.8

784.8945.3

1,056.5

965.2

7,578.7

715.02,209.1

Investment to Vietnam

2000 2005 20100.1

1

10

100

1000

012345678910

0.5

0.4

3.3 4.5

4.4

401.5

6.1

0.8

3.7

12.0

Investment to Lao PDR

2000 2005 20100.0

500.01,000.01,500.02,000.02,500.03,000.03,500.04,000.04,500.05,000.0

0

50

100

150

200

250

300

350

400

Investment to Thailand

2000 2005 20100

1

2

3

4

5

0

1

2

3

Investment to MyanmarUS$ million US$ million

LOG (US$ million)

LOG (US$ million)

Number ofProjects

Number ofProjects

Number ofProjects

Number ofProjects

Number ofProjects

Number ofProjects

Number ofProjects

Number ofProjects

The Amount of Investment




Source: 1) Vietnam; CSO (Various Years) and JETRO (Various Years). 2) Lao PDR; Japan ASEAN Center (2009) and JETRO Correspondent. 3) BOI and JETRO (Various Years). 4) Myanmar; CSO (Various Years).

Japanese Investment Cases along EWEC

Maulamyaine

Maesot

Myawaddy Tak Phitsanulok

Khonkaen Savannakhet

Mukdahan Dansavanh

Laobao

Dongha

Hue

Danang

Myanmar Thailand Lao PDR Vietnam

･ Electric Goods･ Electronics Parts･ Agricultural Products

･ Socks･ Purifying Tin･ Logistics

･Machinery ･ Instant Noodle･ Fishing Equipment ･ Logistics･ Sea Food Processing ･ Tourism･ Pulp Chip

･ Cassava StarchKakasin

Sub-conclusions• Export &Imports between Japan and Thailand is large and stable• Trade between Japan and EWEC countries, particularly Exports from

Vietnam, Lao PDR and Myanmar show increase trend• Major exporting products from Vietnam to Japan have changed

from “food” and “fuel” to “electric appliance” and “garment”• Exporting products from Lao PDR and Myanmar to Japan have been

diversified ex) garments, food and miscellaneous good are added to wood and its

products (Lao PDR) ex) garments & miscellaneous good are added to foods (Myanmar)• Thailand is an important basement for Japanese investors, and

Japan is the top investor in Thailand• Investment from Japan to Vietnam has dramatically increasing• Investment from Japan to Lao PDR and Myanmar has not been

major yet

PART II Case Studies

Case Study of Transportbetween Bangkok and Hanoi

Utilization of EWEC for Bangkok - Hanoi

• BangkokMulti-layered Parts & Component Industries of Automobiles and Electronics

• HanoiAssembling of Electric Goods & Automotives has Increased

↓Procuring Parts & Components from Bangkok to Hanoi was a Challenge in 2000s

10-14 days

3-4 days

Source: Drawn by presenter in accordance with Maps of ADB.

Practical Realization Process• METI organized trial transport between Bangkok and

Hanoi with Private Companies in 2004• Similar trial transport has been conducted by METI, MILT

and JETRO• Japanese private logistics companies also conducted trial

Transport in 2004 – 2008• They started to transport between Bangkok and Hanoi

with order base around 2007• Some of them started the scheduled transport service

between Bangkok and Hanoi in 2009-10↓

Challenges: 1) Demand from Hanoi to Bangkok is smaller 2) Trade facilitation at border gates

Case Study of Trading with a Fabric Company in Savannakhet

Traditional Fabric Producing Company• A Japanese couple of a lady and a

gentleman visited a garment factory Savannakhet in 1998.

Husband: Product Planner & Trader Wife: Designer & Dyeing Expert• They are more attracted by fabric

produced by villagers• They designed the fabric producing

system with the owner of the garment company by hearing the traditional ways of producing from old villagers

• They are persistent in “natural materials” and “hand-made” with adding higher value of “good design”

Captured by Presenter on August 31,2010.

Process for Producing Fabrics

Cotton Yarn

Indigo

Bark of Trees

25 Colors of Dye

Colored Yarn FabricSpinning Dying Weaving

Source: All the photos except noted are from website of Savan Fabric (http://www.shokuintl.jp/).

Captured by Presenter on August 31,2010.

Website of Japan-ASEAN Center.

Flow of Order, Materials and Products

Vientiane

Bangkok

Company inSavannakhet

Planting & Processing Cotton

Spinning Yarn

Planting Indigo or Taking Bark of Trees, and Processing Dye

Weaving Fabric

Village A

Village B

Village C

Village D

Trader inOsakaOrder &

Instructions

Company inSavannakhet

EWEC

Dyeing

CottonFlower

Yarn

Dye

Fabric

Cotton Dyed Yarn

Case Study of a Instant Noodle Factory in Danang

Japanese Instant Noodle Company1993 Invested in Vietnam as a Joint Venture with VIFON1995 Started Production2004 100% Foreign-owned Company

Current Situations・Market Share was 66% (2010)・ 8% of the Products are Exported・ 7 Factories in Vietnam (Shown in the Map)

Source： University of Texas (http://www.lib.utexas.edu/） .

Hanoi

Danang

Hochiminh City

Vinhlong

The Company’s Sales and Market Share

1995 2000 2005 20090

1,000

2,000

3,000

4,000

5,000

0%

10%

20%

30%

40%

50%

60%

70%

1.2%

2.8%

3.2% 5.6%6.5%

6.5%

17.9%

35.6%

53.3%57.1%

64.2%

65.3%

61.9%

62.4%65.8%

Total Demandin Vietnam

the Company Sales

the Company 's Market Share

Source: Provided by Acecook Co., Ltd.

Number of Packs

Market Share

Products in Vietnam

Captured by Presenter on October　 8,2011.

New Market Development• By Utilizing the EWEC,

the Instant Noodle Produced in Danang has been sold in Lao PDR

• The Price Range is ： Kip 1,000 – Kip 2,500 ( ￠ 12.5 – ￠ 31.3 ）


Products for Lao PDR

“Good” Noodle (Beef Flavor) Kip 1,000 ( ￠ 12.5 ） “MODERN” Noodle

(Pork & Egg Flavor) Kip 1,500 ( ￠ 18.8 ） Source: Provided by Acecook Co., Ltd.

Use “Laotian” for Local Market !

Transporting Noodles to Lao PDR !

Leave Danang For Lao PDR Loading the Packs of Noodle

PART II Prospects after Third Mekong

Friendship Bridge

Alternative Route of NR No. 12 and No.8


Distance to Hanoi

Steepness

Route No.9 （ EWEC)1,587km Flatter

Route No. 12 1,429km Steeper

Route No. 8 1,412km Steepest

Compared Distance to Hanoi and Steepness

Source: Isono (2011).

Distance

Hanoi (No. 8) 784km

to Vung An Port 626km

Vientiane to Cua Lo Port 351km

From Vientiane to:

Source: Measured by presenter.

No.9

No.12

No.8

Thank You for Your Attention

References• Acecook , inc. (2011) Business Development of Acecook Group in

Vietnamese Instant Noodle Market (in Japanese, Power Point Sheet).

• Central Statistical Organization (Various Years) Statistical Yearbook, Nay Pyi Taw or Yangon.

• __ Selected Monthly Economic Indicators, Nay Phi Taw.• General Statistics Office (Various Years) Statistical Year Book, Hanoi.• Isono, Ikumo (2011) “Possible Alternative Routes for Further

Connectivity in the Mekong Region,” in Intra- and Inter-City Connectivity in the Mekong Region edited by Masami Ishida, Bangkok Research Center, IDE-JETRO.

• Japan-ASEAN Center (2009) Investment Guide for Lao PDR (in Japanese), Tokyo.

• JETRO (Various Years) White Paper on Trade and Investment (in Japanese, Tokyo.

Documents

Japanese Trade and Investment on EWEC Countries