Enhance the value chain from deep-processing food

Customers taste coffees of Non-La Company introduced in the 2017 Vietnam Foodexpo. Photo: N.Hien.

In the 2017 Vietnam International Conference on the Food Industry with the theme “Improving the Vietnamese food value chain”, Ms Ngo Dang Bao Tram – Senior Manager of the Retail Measurement Group, Vietnam Nielsen Company said that the Vietnam Nielsen’s latest survey on the consumer trend shows that the consumers’ demand for new and high-quality products is increasing.

Consumers increasingly want quality and prestige products, especially the middle class who seek the experience of high-end brands. The segment of high-end products increased significantly in some industries, food sector alone increased by 11%. The Nielsen Vietnam survey also showed that 63% of consumers are willing to pay for premium products because it comes with high quality and safety standards. Meanwhile, 53% of respondents said they would spend on high-end products containing environmentally-friendly materials.

However, the Vietnam's food processing industry is weak and fragmented, not creating many high-quality products. Ms Nguyen Mai Oanh, Vice President and General Secretary of the Vietnam Pepper Association, said that Vietnam now accounts for 60% of world pepper exports, and in 2017 it is expected to export more than 200,000 tonnes. However, due to the fact that it is mainly exported in raw materials or only through the processing industry, there is no deep-processing product, so the value is very low compared to many other countries. Ms Oanh shares that pepper oil is one of the highest value-added products of pepper, which has helped the Indian pepper-making industry get a great profit. However, Vietnam does not have any oil processing plants and enterprises have not paid attention to technology investment to process this product. This makes the production and processing of pepper exports of Vietnam difficult to maintain the level of growth in value in the coming time.

Mr. Do Thien Anh Tuan, Lecturer of the Fulbright Economics Teaching Program, also cited startling figures from the World Bank's statistics on R&D spending. Accordingly, in Viet Nam, this rate was only 1.6%, lower than that of Cambodia (1.9%), Malaysia (2.6%), Philippines (3.6%), especially in Lao, this ratio is up to 14.5%. This shows that Vietnam's R & D investment capacity needs to be greatly improved if it is to move towards sustainable growth.

Despite the weakness in overall, the picture of food processing industry still has bright spots coming from big companies, with a good investment strategy. Mr. Nguyen Trung Anh, R & D Director of PAN Group shared, PAN Group is aiming to develop complete value chains in the Farm-Food-Family model. Accordingly, PAN cooperates with prestigious partners at home and abroad to develop new projects, new products, expand its market and especially receive technology transfer, advanced technology from foreign partners to jointly develop, share successfully. At the same time, PAN is also focusing on the development of raw material areas by combining with farmers and consuming products. Specifically, PAN will provide quality seeds, techniques for farmers, then buy back the products.

Along with the efforts of enterprises, many policies support from the State agencies are also being implemented drastically to promote the value of food products. Mr. Ta Hoang Linh, Deputy Director of Trade Promotion Department (VIETRADE) - Ministry of Industry and Trade said that in addition to providing companies with information on markets, sectors, VIETRADE also coordinated with international organizations to design the product development and consult companies how to create products that meet the needs of the market. In addition, VIETRADE also regularly train, improve the capacity of promotion for businesses, and organize programs promoting the industry.

About the Ministry of Agriculture and Rural Development, Ms. Do Tuyet Mai, Department of Agro-product Processing and Market Development said that the policy of the Ministry of Agriculture and Rural Development is to restructure in the direction of raising the value increase and sustainable development. Accordingly, the development of the product chain in three main axes: national products, local products, and each ward - one product. In particular, the national products are the main export products of over $US 1 billion, such as shrimp, rice, pangasiu, and vegetables... For processing, the Agro Processing and market Development Authority is building a project to improve the capacity of processing agricultural and aquatic products for export based on the forecast of the demand of the import market for each key commodity associated with the ability to provide raw materials for sustainable development. Along with that, it is to attract investment in advanced machinery and equipment to enhance deep processing and ensure food safety as well as enhance the added value and competitiveness of products.