Vietnam’s FPT plans engineer surge to sharpen Japan focus

Vietnamese information technology group FPT plans to bolster its operations in Japan, casting the country at the center of its Asia strategy and boosting engineers there, Truong Gia Binh, founder and chairman told Nikkei.

“By 2020, we want to grow our Japanese unit’s staff 2.5-fold to around 3,000 people and its sales to $500 million,” Mr. Binh said, adding that FPT is also actively considering acquisitions there.

Japan is a key market for the company, generating 60% of its overseas software sales. Its Japanese arm, FPT Japan Holdings, has stepped up hiring of late, adding 100 engineers a month.

FPT Chairman Truong Gia Binh aims to grow sales at his company’s Japanese unit to $500 million by 2020. (Photo by Tomoya Onishi)

In addition to local workers, FPT also looks to cultivate more Japanese-fluent Vietnamese engineers. At FPT University outside Hanoi, the company offers Japanese language education alongside programs in such areas as IT engineering. FPT has also partnered with Japan-based language schools and plans to set up one of its own in Japan next year.

“Language is the biggest issue” hindering foreign companies from entering the Japanese market, Mr. Binh said. “In the software world in particular, you need to accurately understand the customer’s needs. English is widely used in other Asian countries, but in Japan, you can’t do business without a very high level of Japanese ability.”

FPT looks to capitalize on brisk IT demand among Japanese companies, spurred by such factors as preparations for the 2020 Tokyo Olympics. Corporate Japan spent 16.84 trillion yen ($149 billion) on IT-related investments like system development and data centers in 2017, ranking third behind the U.S. and China, according to IDC Japan.

Mr. Binh also plans to have FPT Japan handle the company’s Chinese and South Korean operations, citing the wealth of experience at the Tokyo-based subsidiary. “China and South Korea are the areas we’re most focused on” in terms of Asian growth, he said. “We starting doing business there about two years ago, but they’re still in the early stages.”

Asked about competition for outsourcing in Japan, Mr. Binh cited India’s Tata Consultancy Services and Infosys as FPT’s main rivals from a cost standpoint. But “they focus on the Anglosphere — we have the advantage in Japan,” he said.

The Indian companies have been making inroads into Japan, however. Tata Consultancy signed a memorandum of understanding in October with the University of Tokyo for joint research and personnel exchanges in such areas as robotics. Infosys is hiring more Japanese engineers, and it looks to boost its sales in the country sixfold from last year’s levels to 50 billion yen in three or four years.

Credit: Nikkei Asian Review