Vietnamese exporters start to add value

According to experts, this is a needed move if "made in Vietnam" products are to find a place in the global distribution and value chains.

After more than a decade of being the world’s largest processor and exporter of cashew nuts, the Vietnam Cashew Association (VCA) said it is time for the sector to change its export strategy to penetrate deeper into the global value chain.

This is why the sector has decided to reduce the import of raw cashew this year though it can result in lower exports, said VCA chairman Nguyen Duc Thanh.

"We have researched and shifted our investment for the moment to produce more highly processed products such as salt-roasted cashew, cashew snacks, cashew milk, and other products for export to add more value,” he said.

Le Thi Thanh Lam, deputy general director of Saigon Food, said her company invested in a modern production chain to produce more high-quality and value-added products for selling internationally.

This year, it would focus on processing seafood using a modern production chain and exporting salmon sushi, crab sushi, sea bass kirimi, horsehead fish kirimi, basa fish fillet, shrimp sushi and other products to Japan, she said.

This will be a stepping stone for the company to expand to other markets.

Many businesses are also focusing on expanding cultivation of organic products to capitalise on the global trend.

Nguyen Lam Vien, chairman of Vinamit JSC, said the company has tied up with farmers to grow coconut, jackfruit and banana on a large scale without using chemicals.

Organic certificates would open the door wide for Vietnamese farm produce to enter North America, Japan and the EU - markets that have stringent requirements in terms of products’ nutritional value, safety and environment-friendliness, he said.

Tran Van Linh, chairman of Thuan Phuoc Seafood and Trading Corporation, said: “A number of Vietnamese shrimp processors have invested in producing value-added products, heralding a new export age.”

Last year, his company had earned US$91 million from shrimp exports compared to US$75 million in 2016, he said.

“Export volumes were up only 5% last year, but thanks to an increase in the export of value-added products, which accounted for 90% of the exports, export revenues were up significantly.”

The story that the Vietnam Nutrition Food JSC (Nutifood) has signed a contract with Delori Foods International to export its PediaPlus dissolved milk powder for malnourished children to the US, the first time Vietnam’s milk powder will enter such a demanding market, has brought new hope and confidence to firms in the food sector.

Tran Thanh Hai, chairman of Nutifood, said the product has been exported to the Philippines, Myanmar, Laos, Cambodia and China.

When the product penetrated the US market, the company’s brand prestige skyrocketed since it had met the tough quality requirements of the US Food and Drug Administration (FDA), he said.

A firm foothold in the US market would give the company the leverage to export to other markets, he added.

According to John Beckley from Dover Brook Associates - a Process Authority recognised by the FDA and with over 28 years of experience in assisting major food and pharmaceutical manufacturers and suppliers with engineering design and compliance with FDA guidelines - said Vietnamese businesses have the potential and a great opportunity to export to the US market, especially farm produce and food products.

But for that they need to contact FDA-designated organisations to learn about its regulations, he said.

Tran Thanh Hai, Deputy Director of the Ministry of Industry and Trade’s Import-Export Department, said last year the country surpassed expectations by earning US$214 billion from exports.

But Vietnamese companies only contributed 30% of the amount, with foreign-invested firms accounting for the rest, he said.

The major constraint for domestic enterprises is their inability to access markets, with many still not familiar with the way of doing international business, he said.

Many are unprofessional in most things from management to marketing their products, he said.

As a result, they have not even capitalised on the opportunities that have fallen on their lap because of free trade agreements, he said.

This year, his ministry would continue reforming administrative procedures and removing hurdles faced by enterprises, he promised.