Vietnamese Companies Seize Supply Chain Transition Opportunities

Key pointsAs the global supply chain transitions, Vietnam has the opportunity to enhance its position in the international manufacturing and trade landscape. However, as long as companies remain in low-value-added processes, this opportunity will not drive growth. By August 2026, the total trade volume is expected to reach approximately $770 billion, a 21% increase year-on-year, but the participation rate of domestic companies in the supply chain is declining. This necessitates companies to strengthen their ability to provide higher value-added offerings.
Business impactThis situation presents new business opportunities for Japanese companies as well. In particular, there is a need to reassess roles within the supply chain and develop products or services that offer higher value-added features.

Key pointsOn September 18, renowned American investor Warren Buffett stepped down as chairman of Berkshire Hathaway. This departure serves as a reminder of the importance of long-term investment, particularly in relation to the growth of the Vietnamese economy and investment strategies in emerging market equities. Buffett's investment philosophy emphasizes intrinsic value and an approach that is not swayed by short-term market fluctuations, which is influencing Vietnam's younger investor demographic.
Business impactJapanese companies should reference Buffett's long-term investment philosophy when making investment decisions in the Vietnamese market, particularly focusing on companies in finance, consumer goods, and infrastructure. Maintaining a long-term perspective will help avoid missing investment opportunities in companies with stable revenue bases.

Key pointsMajor central banks have begun to lower interest rates, changing the trend in interest rates. This shift may affect the funding environment and stock market in Vietnam. The actions of central banks, particularly the U.S. Federal Reserve, are being closely watched, with a focus on the pressure on the Vietnamese dong and the behavior of foreign investors. Consequently, there are concerns about the impact on the VN-Index.
Business impactFor Japanese companies, lower interest rates mean reduced funding costs, making it a crucial factor when considering additional investments in Vietnam. Particularly, the manufacturing and service sectors need to monitor this trend and reassess their investment strategies.

Key pointsThe Ministry of Science and Technology of Vietnam has sent a document to the Ministry of Industry and Trade requesting that EVN (Vietnam Electricity) standardize electricity rates for data centers. Electricity costs account for over 50% of the operational expenses of data centers, and in Ho Chi Minh City, businesses are burdened by commercial electricity rates. The Ministry is calling for the application of production electricity rates nationwide to ensure stable power supply, which is expected to stabilize data center operations and contribute to economic development.
Business impactJapanese companies need to be cautious of fluctuations in electricity rates as the operational costs of data centers rise. In particular, businesses based in Ho Chi Minh City must implement measures to ensure the stability of their power supply.

Key pointsThe tax authority in Vietnam explained that there are cases where individuals receive notifications of tax arrears months after receiving personal income tax refunds. This can occur if the payment agency modifies the tax declaration. For instance, a refund initially set at 10 dong may be reduced to 8 dong after correction, requiring the taxpayer to pay the difference. The tax authority recommends that taxpayers contact them directly if they have questions.
Business impactJapanese companies need to be aware that information from payment agencies may change during tax declarations and must thoroughly verify tax amounts. It is particularly important to consider response strategies in advance for cases where a tax arrears notification is received after a refund.

Key pointsAs expectations for an FRB rate hike strengthen, Vietnamese experts predict that the dollar/dong exchange rate will fluctuate within a range of 1-2% annually. The stability of foreign currency supply and interest rate differentials are seen as supporting factors for the exchange rate, with limited risk of sharp currency depreciation. For investors, exchange rate stability is a crucial indicator, with FDI inflows and trade balance trends analyzed as factors supporting foreign currency supply.
Business impactFor Japanese companies, exchange rate stability enhances supply chain management and the accuracy of cost forecasting. Particularly in the manufacturing and logistics sectors, a stable exchange rate environment may contribute positively to performance outlooks.

Key pointsSPX Express is expanding its national service network and developing large-scale sorting infrastructure. This aims to provide convenient and accessible transportation solutions for businesses and users. The logistics market is growing annually, and the government has announced plans to promote the growth of the logistics industry from 2025 to 2035. SPX is advancing the establishment of large automated sorting centers in the north and south.
Business impactJapanese companies should leverage the expansion of logistics services like SPX to build efficient supply chains, particularly focusing on optimizing logistics costs.