Lending to retailer aims to promote Japanese food in Southeast Asian country. Photo by Nikkei Asia.
The government-linked lender aims to support the creation of a distribution network for Japanese food ingredients and processed food in Vietnam through Aeon’s stores. The bank will provide credit worth $24 million, while Mizuho Bank will lend $17 million to Aeon’s local subsidiary, Aeon Vietnam. The funds will finance the opening of two new stores, one in the southern province of Binh Duong, and the other in Long An province.
Aeon Vietnam imports many items from Japan and procures many items from Japanese-owned plants operating in Vietnam.
The stores will serve as a point of contact for Vietnamese consumers with Japanese ingredients and food products. AEON currently operates six large stores in the country and plans to increase the number to 30 by 2030. The retailer is expected to invest tens of billions of yen in new store openings in Vietnam, all told. By adopting a co-financing framework with Mizuho Bank, which has a track record of lending to the industry.
The loans will significantly lower Aeon’s borrowing costs for new store openings. JBIC loans come with lower interest rates than those offered by private financial institutions. The Japanese retailer has also expanded into Cambodia and Malaysia, and may build on its success in Vietnam to put down roots in other countries as well.
AEON sees Vietnam as the most important market in its overseas strategy. In addition to large stores, it has expanded its network to include commercial facilities Aeon Mall and MaxValu, a midsize supermarket. Vietnam’s retail market has been growing at an annual rate of nearly 10% for the last decade.
Source: Nikkei Asia
