Ample room remains for food processing industry’s development
There remains ample room for the food processing industry to develop further and attract more investment, experts have said at a recent seminar on new trends and technologies in food processing held in Ho Chi Minh City.
Nguyen Tuan, deputy director of the Ho Chi Minh City Trade and Promotion Centre (ITPC), the organiser of the event, said that with 19%, food processing is currently the largest industry in Vietnam’s manufacturing sector, demonstrating its important role in meeting the domestic consumption and export.
In addition, the domestic food processing industry has a stable market, a competitive edge over foreign rivals, and huge potential for further growth.
The industry can access even larger markets as Vietnam has signed several free trade agreements (FTAs), he added.
The number of enterprises operating in this field accounted for only 0.1% of the total in the country, but this is one of the spearhead industries with great potential for development, making up more than 20% of the annual net sales of the processing and manufacturing industries.
Dr. Le Minh Hung, director of the Sub-Institute of Agricultural Engineering and Post-Harvest Technology, said that the share of processed fruits and vegetables in the total fruit and vegetable export turnover has increased continuously, from 26% in 2021 (US$923 million) to 30.4% in 2022 (US$1.014 billion).
If the number of enterprises operating in fruit and vegetable processing and production accounts for the highest proportion in the enterprise structure of the food processing sector, frozen aquatic product processing attracts the most number of workers. The whole country has over 847 aquatic product processing factories of which 692 are eligible to process products for export to the EU. This figure is 1.4-4 times larger than that of Thailand, India and Indonesia, which shows great potential for Vietnam's food processing industry, which is very attractive to foreign investors.
According to the European Business Association, the merger and acquisition (M&A) activity of Vietnam's food production and processing industry is thriving. Over the past years, there have been many M&A deals in this industry and this trend is expected to continue in the coming years.
Experts said that FTAs that Vietnam has signed will bring about many market advantages for businesses in the field. Therefore, in order to quickly seize opportunities as well as increase competitiveness, enterprises need to focus on investing in modern equipment and technology to improve production capacity and quality, building brand, and stepping up product promotion activities.