Membership of the WTO has opened up new opportunities for domestic businesses to develop and has also posed challenges to them in their competition with foreign businesses and economic groups.
To secure a firm foothold in the domestic market, domestic businesses have to promote their inner strengths and creativeness and diversify their activities with a view to sharpening their competitive edge.
Man Ngoc Anh, chairman of the HaNaKa group which specializes in the light industry and the power industry, said the group will expand business operations to compete with its rivals. In the coming period, the group will invest in real estate, building hydro-electric and thermal power plants and packaging enterprises.
In the process of national industrialization and modernization, Vietnam’s engineering companies are set to improve their capacity in a number of fields such as shipbuilding, machine tool, cultivating machines, automobiles and motorbikes. They are looking up to boost production and trade activities while seeking international cooperation in technology transfer, consultancy, training, designing and management to overcome their shortages in technology and human resources.
Over the past few years, many engineering enterprises have made great strides. For example, the Vietnam Machine Installation Corporation (Lilama) has used a large amount of locally made machines when they implemented big projects such as expanding the Uong Bi thermal power plant, Ca Mau 1, Ca Mau 2 power plants, Nhon Trach power plant and Song Thao cement plant.
However, to achieve the target of meeting 45-50 percent of domestic demands for machines, the domestic manufacturing sector needs additional support.
Nguyen Van Thu, president of the Vietnam Engineering Enterprises Association, said it is necessary to create technical barriers to avoid low-quality products being imported into Vietnam. In addition, domestic businesses must renovate and structure themselves to meet big orders.
Now, many Vietnamese agricultural exports top the world in terms of quantity such as rice, coffee and peppers. However, their quality and export values remain low due to some certain difficulties such as a scattered production base and low technical and management skills. To increase the value of agricultural exports, businesses in the agricultural sector need to focus more on scientific and technological research to provide high-quality products as well as improving their competitive edge.
According to Nguyen Thanh Hung, Head of the Planning and Business Section from the Foodstuff and Technology Investment Cooperation known as Fococev, his company’s key product is cassava starch. Annually, the company provides 30 percent of cassava starch for in the domestic market and exports around 70 percent to other foreign markets such as Malaysia, Indonesia, Australia and Japan. Fococev is currently focusing on increasing its productivity and developing material zones in a bid to speed up its development.
“We are paying special attention to developing material zones to enable farmers to produce good quality products. Our factory has produced the equipment needed to help double our current capacity,” said Mr Hung.
Over the past nine months, the country’s export turnover was estimated to reach US$35.2 billion, up 19.4 percent from the year before. Notably, the value of garment and textile exports hit US$5.8 billion, an increase of 36.1 percent, for the first time surpassing the crude oil export turnover to top the list of staple export products.
Regarding the development trend of garment and textile businesses in the future,
Under the context of integrating into the world economy, Vietnamese enterprises will face challenges and tough competitions such as the strict control of garment and textile products, anti-dumping laws and protection of enterprises from international trade disputes. Therefore, it is imperative to set up craft associations to protect enterprises’ legitimate interests while creating a bridge between them and policy-makers. In the face of fierce competition, domestic enterprises should cooperate with their foreign partners, which are financially, technologically and managerially strong.
In order to cope with challenges after Vietnam completely opens its retail market under its commitments to the World Trade Organisation (WTO), four major Vietnamese distribution enterprises, the state-owned Saigon Trade Corporation (Satra), the Hanoi Trade Corporation (Hapro), the Saigon Trading Cooperative Alliance (Saigon Co.op) and the joint stock Phu Thai LLC (Phu Thai Group) have joined efforts to establish the Vietnam Distribution Associate Network Development and Investment Joint Stock Corporation known as VDA.
Director of the Phu Thai Retail Group Pham Dinh Doan said the establishment of a retail association is necessary as such associations have been set up abroad for many years. The association aims to protect the legitimate interests of its members and represent businesses when proposing macro policies and reflect their urgent needs to the Government. In addition, the association should help enterprises create closer links to sharpen their competitiveness over major foreign groups.
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