Food consumption accounts for about 15% of Vietnam’s annual GDP, and it increased by 18% in 2015. Meanwhile, the food processing and beverage production respectively grew by 8.5% and 7.4% the same year.
Vietnam is a world leading exporter of agricultural products, which means the food industry holds great development prospects not only in the domestic market but also the foreign ones, said Deputy Minister of Industry and Trade Ho Thi Kim Thoa.
Bui Huy Son, Director of the ministry’s Trade Promotion Agency, said Vietnam’s signing of economic partnership agreements with other countries opened up a vast market for domestic and foreign- invested companies in this industry.
Claudio Dordi, an expert at the European Trade Policy and Investment Support Project (EU-MUTRAP), was of the opinion that there remain many shortcomings in the local food processing industry, such as small-scale production, slow restructuring in agriculture and the rampant use of chemicals and pesticides. However, Vietnam can make use of an abundant workforce and fresh materials to assist the growth of this industry.
Dang Xuan Quang, Deputy Director of the Foreign Investment Agency, admitted that the local food processing hasn’t been attractive to foreign investment. There were 521 FDI projects worth US$7.6 billion in this industry as of the end of October this year.
To promote foreign investment in food processing, experts advised that local authorities develop zones supplying agricultural materials to serve investors, bolster technology transfer, and try to sign more mutual recognition agreements on processed food quality examination.