Japanese Trade and Investment on EWEC Countries

1. Japanese Trade and Investmenton EWEC Countries Masami Ishida Bangkok Research Center, JETRO

2. Outline of Presentation • PART IStatistics on Trade &Investment Trade Relations between Japan and EWEC Countries Investment from Japan to EWECCountries Sub-conclusions • PART IICase Studies Case Study of Transport between Bangkok and Hanoi Case Study ofTrading withaFabric Company in Savannakhet Case Study of anInstant Noodle Company in Danang • PART IIIProspects after the Third Mekong Friendship Bridge

3. PART I Statistics on Trade & Investment

4. Trade Relations between Japan and EWEC Countries

5. Outline of Trade Relations <Trade from Japan to EWEC Countries> <Trade from EWEC Countries to Japan> Source: Data of Customs in Japan of World Trade Atlas.

6. Trends of Trade with EWEC Countries Source: Data of Customs in Japan of World Trade Atlas.

7. Trade between Japan and Vietnam Source: Data of Customs in Japan of World Trade Atlas.

8. Trade between Japan and Lao PDR Source: Data of Customs in Japan of World Trade Atlas.

9. Trade between Japan and Thailand Source: Data of Customs in Japan of World Trade Atlas.

10. Trade between Japan and Myanmar Source: Data of Customs in Japan of World Trade Atlas.

11. Investment fromJapan to EWEC Countries

12. Japanese Investment in 10 Years <2001-10> <2006-10> 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).

13. Trend of Investment from Japan LOG (US$ million) LOG (US$ million) Number of Projects Number of Projects The Amount of Investment The Amount of Investment Number of Projects Number of Projects Number of Projects Number of Projects US$ million US$ million Number of Projects The Amount of Investment The Amount of Investment Number of Projects 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).

14. Japanese InvestmentCases alongEWEC Myanmar Thailand Lao PDR Vietnam Myawaddy Tak Phitsanulok Mukdahan Dansavanh Dongha Maesot Khonkaen Savannakhet Laobao ･Electric Goods ･Electronics Parts ･Agricultural Products ･Socks ･Purifying Tin ･Logistics Hue Maulamyaine Kakasin Danang ･Cassava Starch ･Machinery ･Instant Noodle ･Fishing Equipment ･Logistics ･Sea Food Processing ･Tourism ･Pulp Chip

15. Sub-conclusions • Export &Importsbetween 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

16. PART II Case Studies

17. Case Study of TransportbetweenBangkok andHanoi

18. Utilization of EWEC for Bangkok - Hanoi • Bangkok Multi-layered Parts & Component Industries of Automobiles and Electronics • Hanoi Assembling of Electric Goods & Automotives has Increased ↓ Procuring Parts & Components from Bangkok to Hanoi wasaChallenge in 2000s 3-4 days 10-14 days Source: Drawn by presenter in accordance with Maps of ADB.

19. 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

20. Case Study of Trading with a Fabric Company in Savannakhet

21. 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.

22. Process for Producing Fabrics Colored Yarn Spinning Dying Weaving Cotton Yarn Fabric Website of Japan-ASEAN Center. Captured by Presenter on August 31,2010. Indigo 25 Colors of Dye Bark of Trees Source: All the photos except noted are from website of Savan Fabric (http://www.shokuintl.jp/).

23. Flow of Order, Materials and Products • Trader in • Osaka Vientiane Order & Instructions EWEC Company in Savannakhet Bangkok Village A Village C Planting Indigo or Taking Bark of Trees, and Processing Dye Planting & Processing Cotton Dye Cotton Flower • Company in • Savannakhet Village B Village D Cotton Dyed Yarn Dyeing Spinning Yarn Yarn Fabric Weaving Fabric

24. Case Study of a Instant Noodle Factory in Danang

25. Japanese Instant Noodle Company Hanoi 1993 Invested in Vietnam as a Joint Venture with VIFON 1995 Started Production • 100% Foreign-owned Company Current Situations ・Market Share was 66% (2010) ・8%ofthe Products are Exported ・7Factories in Vietnam (Shown in the Map) Danang Hochiminh City Vinhlong Source：University of Texas (http://www.lib.utexas.edu/）.

26. The Company’s Sales and Market Share Number ofPacks Market Share Source: Provided by AcecookCo.,Ltd.

27. Products in Vietnam Captured by Presenter on October8,2011.

28. New Market Development • By Utilizing the EWEC, the Instant Noodle Produced in Danang has been sold in Lao PDR • The Price Range is： Kip1,000–Kip 2,500 (￠12.5– ￠31.3） Source: Drawn by presenter in accordance with Maps of ADB.

29. Products for Lao PDR Use “Laotian”for Local Market ! “Good” Noodle (Beef Flavor) Kip 1,000 (￠ 12.5） “MODERN” Noodle (Pork & Egg Flavor) Kip 1,500 (￠ 18.8） Source: Provided by AcecookCo.,Ltd.

30. Transporting Noodles to Lao PDR ! Loading the Packs of Noodle Leave Danang For Lao PDR

31. PART II Prospects after Third MekongFriendship Bridge

32. Alternative Route of NR No. 12 and No.8 Compared Distance to Hanoi and Steepness No.8 No.12 No.9 Source:Isono (2011). From Vientiane to: Source:Measured bypresenter. Source: Drawn by presenter in accordance with Maps of ADB.

33. Thank You for Your Attention

34. 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.