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Economy

Japan to help channel capital into Southeast Asia Inc.

Government-backed funds to support cross-border business tie-ups

The Kuala Lumpur skyline: Japan hopes to tap into the region's growth potential through the METI initiative.   © Reuters

TOKYO -- Japan's economic ministry plans to act as a matchmaker that will bring promising Southeast Asian companies together with Japanese capital to fuel growth.

Under the framework, Japanese companies will enter into capital and operational tie-ups with Asian partners, with government-backed funds injecting growth capital. The initiative is set to form a central piece of the growth strategy the Ministry of Economy, Trade and Industry will craft next year.

Southeast Asia is home to both a growing population and relaxed regulations. Such an environment has produced a number of leading businesses, and the ministry hopes Japan will tap into that growth.

Many Japanese companies have expanded into other Asian countries while looking for local partners. But the region is often dominated by family-owned conglomerates. Japanese players are sometimes left with little choice but to take the independent route.

Companies in Asia increasingly require growth funds to maintain global expansion, with Chinese money said to be often the source of financing.

METI plans to use the contacts and know-how accumulated by embassies in Asia to match Japanese companies with local counterparts. Advancing the vision is a team formed within the ministry last summer focused on Asian digital transformation.

Discussions have started with Japanese blue chips such as industrial group Hitachi and wireless carrier KDDI, as well as Asian businesses. To secure the growth investment, infusions by public-private funds are also on the table.

Japan Investment Corp., the Japan Bank for International Cooperation and the Development Bank of Japan will be invited to provide capital, as will private-equity firms like Advantage Partners.

Japan and Thailand recently signed a memorandum of understanding for cooperation in open innovation. Japanese trading house Toyota Tsusho has been collaborating with Flare, a Thai company that places advertisements on private vehicles so owners can make extra money.

CP Foods, part of Thailand's largest conglomerate CP Group, has partnered with Japanese fish-farming startup Umitron  -- the first tie-up under the METI initiative.

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