Sustainable exports towards added values

Vietnam will likely have major opportunities to increase its export revenue when free trade agreements it has signed come into force. But in addition to opportunities, restructuring will be needed to sustainably increase export values.

In recent years Vietnam has become a country with high export turnover, but the added value remains modest, largely because Vietnam’s main export items are in the form of raw or roughly processed materials.

Nguyen Quang Phi Tin, Sales Director of the TH True Milk Group, said “We are studying several markets, including Laos, Myanmar, and Indonesia, to find new opportunities to expand our trade promotion. When you plan to invest in a group of products, you must abide by international rules and standards. When your products are sold on the world market, they must meet all regulations set by the WTO and the world.”

The group is one of the few Vietnamese enterprises to have successfully promoted its products to 40 countries around the world.

When global demand falls, so does Vietnamese export revenue. Rapid restructuring of export items is called for. Export commodities are already changing. Industrial products now account for 80% of export value.

But industrial goods are processed while agricultural products are mostly unprocessed and therefore have less added value. Some agricultural exports face problems related to food hygiene and safety.

Tran Thanh Hai, Deputy Director of the Export-Import Department of the Ministry of Industry and Trade, said export items must be given greater added value. This has become more urgent than ever and Vietnam is now giving priority to developing its auxiliary industry and applying advanced technology to production and market development.

“For businesses, market development is mainly a matter of trade promotion, advertising, and branding. They should do all this on their own. In addition, they should strengthen links between businesses to strengthen the entire business community,” said Hai.

Economist Vo Tri Thanh said the State should create more incentive policies to boost support industries for mechanical engineering, component manufacturing, garments, textiles, and footwear so as to increase the locally made ratio.

To increase the value of agricultural exports, contracts should be signed between farmers, cooperatives, and enterprises to create production/consumption chains.

Thanh underscored the need to build stable, high-yield materials areas and step up the application of technology to production to raise the value of exported goods.

He said “Trade promotion, especially to bigger, stronger countries, plays an important role. To improve branding and increase the added value of Vietnamese goods - especially exported goods and services - we should improve our resources, create links between localities, and strengthen connectivity with external partners.”

The goal will also require close coordination between ministries and agencies in reforming export-import procedures and creating a healthier, more competitive business environment.