VNEconomyNews.com - Japan's Shin-Etsu Chemical Co Ltd has spent 5 billion yen ($65.2 million) for the establishment of its first two subsidiaries in Vietnam.
The 3 billion yen ($39.1 million) Shin-Etsu Electronics Materials Vietnam Co Ltd and the 2 billion yen ($26.1 million) are set up for the manufacture of silicone-based materials for high-brightness LED packaging and the separation and refinement of rare earths respectively.
Shin-Etsu Electronics Materials Vietnam, specializing in manufacturing and sales of silicone-based encapsulating materials and reflectors for LEDs, will cover about 50,000 square meters in northern Hung Yen Province’s Thang Long Industrial Park No.2.
It is located around 30 kilometers and 70 kilometers away from the capital city of Hanoi and the coastal city of Hai Phong respectively.
Shin-Etsu Magnetic Materials Vietnam, focusing on processing ore to extract a wider variety of the metals, will be located on an 80,000-square meter area in Dinh Vu Industrial Park in Hai Phong City.
The plant, which is expected to process 1,000 tons of rare earths mined in Australia, India and other places annually, would be Shin-Etsu's first such facility outside Japan, said Nikkei newspaper.
The Vietnamese operation will raise the company's extracting and refining capacity 50 percent, and is likely to help reduce its reliance on China for raw materials, said the Japanese business newspaper.
Almost all the materials of Shin-Etsu Magnetic Materials Vietnam will be set aside for Shin-Etsu Chemical Vietnam, the company told Tuoitrenews.
Shin-Etsu, the world's second-largest producer of rare-earth magnets, will supply the plant with spent magnets recovered from hybrid vehicles, hard drives and other items, as well as leftover materials from its rare-earth magnet factory, the Nikkei said.
The 2 production bases, the first of its kind owned by Shin-Etsu Group in Vietnam, are scheduled to start operations in March and in February of the next year with approximately 30 employees and 50 employees respectively.
The expected revenues for Shin-Etsu Electronics Materials Vietnam will be around 3.5 billion yen or 4 billion yen after two or three years.
With the newly established production bases in Vietnam, Shin-Etsu can take advantage of the demand following future economic growth in Vietnam and its neighboring countries.
“In addition, in view of its excellent workforce with its high level of education and diligent national character and the country having the infrastructure that is necessary for manufacturing, we came to the conclusion that Vietnam is the most suitable country in which to make this investment,” the company said in its press release.
“We welcome the decision of Shin-Etsu Chemical Co., Ltd. to expand into Vietnam.
Presently, the Japan-Vietnam relationship is in a very good stage of development and this is a suitable point in time for Japanese companies to come into Vietnam,” the company quoted H.E. Doan Xuan Hung, Ambassador Extraordinary and Plenipotentiary of Vietnam to Japan, in a recent message sent to the company.
In late October last year, the Prime Minister of Vietnam, Nguyen Tan Dung, and his Japanese counterpart, Yoshihiko Noda, signed an agreement on mining and processing of rare earth in Dong Pao mine in northwestern upland province of Lai Chau.
The mine is considered to have big reserves of rare earth minerals including lanthanum, cerium and neodymium which are necessary to produce liquid crystal displays and batteries for hybrid cars.
The two countries will launch a research center in Hanoi this year to develop technologies for the separation and refinery of rare earth minerals from the ores without polluting the environment.
