Food processing segment to blossom in coming years
Speaking at a recent investment forum held on the margins of Vietnam Foodexpo 2016 in Ho Chi Minh City, Deputy Minister Ho Thi Kim Thoa of the MOIT said the segment is in a growing phase with the domestic sector struggling to keep pace.
The food processing segment is super healthy, said Ms Thoa, adding that market analysts have forecast the industry will average growth rates ranging 5-6% every year in the foreseeable future.
The key influencers for the bright outlook are related to the fact that agriculture is the main source of income for over half of the Vietnam total population and the government is doing a lot to improve working conditions, innovation and productivity in farming.
In addition, the food processing industry in the country has access to an abundance of raw materials allowing the marketplace to offer a wide variety of products. Rising disposable incomes of households across the country are also a plus.
Notably, she said, there is an increasingly health consciousness driving demand for nutritious products that shows no sign of abating. Many market analysts have projected the organic food industry will grow threefold by 2020.
Bui Huy Son, director general of the Vietnam Trade Promotion Agency, in turn told the audience that food consumption has been projected to grow at an 18.6% clip annually through 2019.
Additionally, he said the Vietnam government has picked up the pace of equitization of State-owned businesses, which directly impacts opportunities for the food processing segment.
The State Capital Investment Corporation has stocks of more than 200 inpidual companies on the auction block, of which 50 are in the food industry. The Government getting out of the industry, presents a great opportunity for private businesses to jump in.
For his part, Dang Xuan Quang, deputy director of the Foreign Investment Agency, said the segment has attracted US$7.6 billion of FDI, which has been concentrated in areas such as handling, packaging, processing, transporting and marketing of food and agricultural products.
He noted the transnational companies that have invested in Vietnam have primarily been those based out of Thailand, Taiwan, Malaysia, Korea, and China with very little coming from companies in Japan, the US, Australia or the EU.
Lastly, Claudio Dordi, the technical assistance team leader of the European Trade Policy and Investment Support Project, noted the Vietnam-EU free trade agreement signed last year is set to come into force in 2018.
The new economic free trade region created by the agreement combined with the increasing demand for hygiene and food safety makes the segment a win-win for Vietnam and the EU.
He expects the food processing segment to blossom over the coming years and believes there will be an influx of investment from the EU.
Related News
AEOs make great contributions to Vietnam’s trade development
07:40 | 16/10/2024 Customs
Businesses cooperate to develop advanced technology
10:58 | 12/10/2024 Import-Export
Note for businesses when converting green and digital
10:00 | 05/09/2024 Import-Export
Revenue of food and beverage industry increased dramatically
13:38 | 30/08/2024 Import-Export
Latest News
Promoting Vietnam - Poland trade through new maritime routes
10:24 | 13/12/2024 Import-Export
Total import-export turnover reaches US$715.55 billion in 11 months
10:23 | 13/12/2024 Import-Export
MoIT sets export growth at 6% in 2025
11:00 | 12/12/2024 Import-Export
Vietnam's first logistics park opens in Lang Son
10:58 | 12/12/2024 Import-Export
More News
Vietnam’s coffee exports possibly top 5 billion USD for first time
10:56 | 12/12/2024 Import-Export
Support aggregate demand to promote economic growth
09:41 | 12/12/2024 Import-Export
Plastics demand growing, says industry association
15:12 | 11/12/2024 Import-Export
Vietnam’s tuna exports gain larger market shares in key markets
15:09 | 11/12/2024 Import-Export
Efficiency in emission reduction and sustainable development for wood enterprises
14:46 | 11/12/2024 Import-Export
US emerges as biggest consumer of Vietnam’s pepper
16:57 | 10/12/2024 Import-Export
Why are seafood exports to some Middle Eastern countries blocked?
10:32 | 10/12/2024 Import-Export
Seafood exports increase competitiveness through quality
10:24 | 09/12/2024 Import-Export
Textiles, footwear enterprises need support to green the supply chain
10:22 | 09/12/2024 Import-Export
Your care
Promoting Vietnam - Poland trade through new maritime routes
10:24 | 13/12/2024 Import-Export
Total import-export turnover reaches US$715.55 billion in 11 months
10:23 | 13/12/2024 Import-Export
MoIT sets export growth at 6% in 2025
11:00 | 12/12/2024 Import-Export
Vietnam's first logistics park opens in Lang Son
10:58 | 12/12/2024 Import-Export
Vietnam’s coffee exports possibly top 5 billion USD for first time
10:56 | 12/12/2024 Import-Export