The number of Vietnamese enterprises operating in the food industry is currently about 5080 enterprises. Photo: H.Diu

Food industry enterprises increased sharply

At the Policy Seminar in the field of the food industry on April 13, Vu Ba Phu, Director of the Trade Promotion Department (Ministry of Industry and Trade), said that Vietnam's food industry is tending to strong growth and potential in the region thanks to the increasing income and consumption trends of the Vietnamese people, the market gradually provides more competitive products, dominates the domestic market and increase exports.

Key products that play a significant role in the structure and value of industrial products in Vietnam include alcohol, beer and soft drinks; processing milk and dairy products; vegetable oil; processing flour and starch; tobacco production.

The number of Vietnamese enterprises operating in the food industry reaches about 5080 enterprises, an increase of 83.8% compared to 2019. This is a positive number after two years of fighting the covid-19 pandemic.

Vu Ba Phu said that in the past 5 years, the consumption of food and beverages in Vietnam has increased by an average of 9.68% and 6.66%, respectively, in the food industry. The processed fruit and vegetables sector accounted for 24.7% of the industry's revenue growth and continues to see the fastest growth potential thanks to export activity and domestic consumption, the highlight being profit. As a result, this industry has grown by nearly 205%. The main and most attractive fruits include mango, banana, dragon fruit, orange, and pineapple.

In particular, the food industry is also one of the key industries prioritized for development by the Vietnamese Government from now to 2025, with a vision to 2035, playing an important role in socio-economic development. The association includes: creating more jobs, promoting commodity export activities and raising incomes for workers, giving priority orientations to increase the rate of processing agricultural and aquatic products, applying international standards in the production and processing process, and contributing to branding and competitiveness of products manufactured in Vietnam.

Space for investors

Vietnam is a potential location for the food industry, especially with Korea; the room for businesses of the two countries to promote the food industry is still very large.

According to the leader of the Trade Promotion Agency, for the food industry of the two countries, Korean food brands focus on products and services through the promotion of typical local products, such as flavoured Soju, suitable for Vietnamese tastes in the summer, or a long-lasting and branded taste with Vietnamese people from O'Star, Choco Pie is also constantly developing and increasing market share.

In contrast, the outstanding product in the Korean market of Vietnamese origin is fresh/live and frozen octopus, accounting for 80% of the total export value and is Vietnam's main export product to the market. Besides frozen cleaned and processed squid in Korea, frozen sushi squid also attracts Korean consumers' taste.

In particular, at present, four trade agreements have been signed with the presence of two countries, which also contribute significantly to promoting Vietnamese goods to penetrate the Korean market and vice versa, including Trade Agreement ASEAN - Korea Free Trade Agreement (AKFTA), Vietnam - Korea Free Trade Agreement (VKFTA), Regional Comprehensive Economic Partnership Agreement (RCEP), and especially the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (FTA), the Trans-Pacific Partnership (CPTPP).

From a local perspective, Pham Thi Dao, Deputy Director of the Department of Agriculture and Rural Development of Hai Duong province, said that the province currently has many unique products and famous brands on the market, such as Thanh Ha lychee, Hoa Vang sticky rice, Chi Linh hill chicken, green bean cake, Ninh Giang gai cake, Hai Duong porcelain, and Chu Dau ceramic. Hai Duong currently has 134 Korean investment projects, with a total registered investment of 1,398 million dollars. However, no Korean investment projects have invested in the food processing industry in the province.

Besides, in Hai Duong province, there are about 12,040 agricultural product processing establishments; however, the current main form of production organization is households; small-scale production accounts for 98% of production facilities, and the connection between production and consumption is not tight. In addition, processing enterprises are few, so they have not created a strong motivation to develop processing, and have not formed a wide range of production - processing - consumption of products along the value chain, so production is unstable and low efficiency.

Therefore, Pham Thi Dao proposed that the Government submit to the National Assembly to amend and supplement several contents of the Land Law to create conditions for the concentration and accumulation of land and the effective use of land resources. ; have more feasible mechanisms and policies for individuals, households, cooperatives, and small and medium enterprises investing in the agricultural sector to access loans and concessional loans from credit institutions. In addition, ministries and branches must develop and complete national technical regulations for commodity lines.

In particular, the Korean trade and investment promotion agency introduced large and reputable enterprises to invest in Hai Duong, a processing plant for agricultural products for export and domestic consumption, or invest in direct production in the fields of cultivation, animal husbandry, fisheries, and high-tech agricultural production to make the nucleus spread and replicate in the locality.