Ho Chi Minh City's food processing industry remains optimistic about exports

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Testing fruits before exporting at Vina T&T Group Company. Photo: Minh Ha

Green “passport”

The food processing industry is one of the four prioritized key industries for development in HCM City, contributing 14-15% to the total industrial production value annually. The production capacity of food processing companies in the city not only ensures sufficient supply to meet the consumption needs of the city's residents and the domestic market but also exports to many countries worldwide.

Despite the prevailing grey outlook in the overall economic landscape, which has caused difficulties for many businesses, there are still positive signals emerging from some food processing units in HCM City.

Nguyen Anh Tuan, Deputy General Director of Colusa - Miliket Food Company, stated that their export revenue to 30 countries and territories had increased by about 30% compared to the same period last year during the first five months of 2023. Sales in key export markets such as the US, Japan, and South Korea have shown significant growth. In addition to instant noodles, American and European consumers also favor rice products.

Achieving business results through flexibility and adaptation in difficult times, Tan Quang Minh Production and Trading Co., Ltd (Bidrico) recorded a growth rate of more than 20% in the first four months of 2023 compared to the same period last year.

Vu Kim Hanh, Chairwoman of the Business Association of High Quality Vietnamese Products, stated that food producers and processors, as well as beverage manufacturers in HCM City, have quickly adapted to changes in consumer habits. Some units have started moving towards a green economy. This is a positive signal that needs to be expanded to promote sustainable development and growth.

Nguyen Ngoc Hoa, Chairman of the HCM Union of Business Association (HUBA), stated that despite the majority of businesses experiencing significant declines or a lack of orders due to general difficulties, HUBA's survey showed that their members had performed well in environmental protection and green production. As a result, they have abundant orders and are currently unable to accept additional orders due to reaching their production capacity.

This demonstrated that the "green passport" would help businesses in general, and the food processing units in particular, overcome barriers, expand their export market share, and enhance their capacity to supply products and goods to the domestic market.

Information from Tan Quang Minh Production and Trading Co., Ltd (Bidrico) revealed that in 2022, thanks to the greening of production processes, the company's export revenue had increased by over 60% compared to the plan. Since the beginning of 2023, in addition to maintaining market share in South Korea, Japan, and Southeast Asia, the company has gained additional export orders to the US and China due to its green transformation capability.

By meeting the new global standards and export requirements to all markets, Nguyen Dinh Tung, CEO of Vina T&T Import-Export Company, stated that the company's fruit export revenue grew by 20% in the first four months of the year compared to the same period last year. With regards to durian, this year, the company has a contract to export 1,500 containers (15 tons per container) to the Chinese market.

Towards sustainable development

However, under the overall impact of the global and domestic economy, the food processing industry is facing many difficulties and challenges, especially a sharp decline in export activities compared to the same period last year. A report from the HCM City People's Committee showed that in the first five months of 2023, although the industrial production index of the city's four prioritized key industries increased by 3.8% compared to the same period last year, the food processing and beverage industry decreased by 4.7%.

Regarding this situation, Nguyen Dang Hien, Vice Chairman of the HCM City Food and Foodstuff Association (FFA), said that despite belonging to the group of essential consumer products, the food and beverage industry was not immune to negative impacts from inflation and prolonged military conflicts in some regions of the world. The trend of tightening spending in major consumer markets such as the US and EU has led to a reduction in export orders, greatly affecting the production of businesses. In the domestic market, although businesses have implemented many promotion programs and trade connectivity, purchasing power remains weak. The consumption index of food and beverages (including wholesale and retail) decreased by approximately 4% compared to the same period in 2022.

“What food and beverage businesses need the most at this time are stable production support policies and trade promotion activities to help them recover quickly, overcome difficulties, enhance operational efficiency, and seek and expand domestic and export markets," said Tran Phu Lu, Deputy Director in charge of the HCM City Investment and Trade Promotion Center (ITPC).

To quickly seize opportunities and enhance competitiveness, the food industry needs to focus on investing heavily in modern equipment and technology to improve production capacity, quality, and brand building, as well as product promotion. On the one hand, relevant entities should develop regional raw material planning through practical solutions to enhance the effectiveness of inter-provincial and inter-city linkages among farmers, production businesses, and management authorities to create stable raw material regions.

On the other hand, according to experts, for the food and beverage industry in HCM City to recover and develop, what production and business enterprises in the food industry currently need the most are stable production support policies. Simultaneously, there is a need for trade promotion activities to help businesses recover quickly, overcome difficulties, enhance operational efficiency, and seek and expand domestic and export markets, aiming for sustainable development.

In 2023, Ho Chi Minh City has set a target of a 7.5% increase in the industrial production index compared to 2022 and a 12% increase in the total retail sales of goods. Deputy Director of the HCM City Department of Industry and Trade, Le Huynh Minh Tu, said that the city's industry and trade sector is developing a strategic plan for the development of the food processing industry until 2030, with a vision to 2050.

Accordingly, HCM City will support food processing and beverage businesses in building their brands, facilitating trade connections, adopting and innovating technology in production and business processes, improving product quality, and expanding the consumer market, particularly the domestic market. The city will also attract investment resources to promote the rapid and sustainable development of the food, beverage, and processing industries.