Japanese firms are scaling up investment in Vietnam’s textile and garment sector. Japanese company Matsuoka produces casual apparel in Vietnam to be exported to Japan and China. Matsuoka Corporation first set foot in Vietnam in 2014. It mainly produces apparels for Uniqlo to be exported back to Japan. The company has chosen Vietnam for capital injection and production expansion in recent years to take advantage of the opportunities anticipated to be brought by new-generation free trade agreements such as the EVFTA and the CPTPP. Matsuoka has three plants in Vietnam with one more coming up. The firm’s medium-term business plan intends at minimising its dependence on China by nearly 50 per cent by March 2021 by shifting its focus to Vietnam from China, where production costs are on the rise.

With around 30 plants in operation, Sakai Amiori, another Japanese company, has opened an export apparel production plant. The plant finished construction in April 2017 and now sees stable production and exports.

The influx of foreign direct investment continuing to flow into export-oriented sectors like textiles and clothing has the dual benefits of helping to boost the sector’s capacity and turning Vietnam into a global manufacturing base.