Maintaining export market from technology transformation

	The Chinese market is increasingly "difficult"
	EVFTA to act as catalyst for textile, footwear exports: experts
	CPTPP opens opportunities for Vietnam to expand export markets

Egg processing line at Ba Huan high technology poultry processing and processing factory.

Challenging the integration period

According to the experts, Vietnam is moving into the stage of comprehensive economic integration, which is the main and most important content of the integration process. Recent trade agreements and upcoming new free trade agreements (FTAs) will surely be a new driving force, bringing unprecedented opportunities for the Vietnamese economy and Vietnamese businesses.

Dr. Vu Tien Loc, Chairman of the Vietnam Chamber of Commerce and Industry (VCCI), analyzed that FTAs signed will be approved in the near future, and will open up expectations of large market space and opportunities for enterprises to participate in the global value chain. This is also a driving force to promote the development of a fair business environment. However, new businesses now take advantage of 40% of tariff preferences from FTAs.

According to the Ministry of Industry and Trade, currently 60-70% of raw materials for domestic production and export must be imported. The heavy reliance on imported materials makes the economy at a disadvantage whenever world prices fluctuate, increasing domestic production costs. At the same time, dependence on imported materials also indirectly reduces the competitiveness of exported goods because of not taking advantage of preferential tax rates when exporting to countries that have signed FTAs with Vietnam.

On the other hand, according to experts, Vietnam’s main export markets such as to the US, Europe, Japan, Korea, China... consumption trends have changed, and this strongly and clearly impacts Vietnam’s major export products. For example, with plastic products, textiles, footwear... in addition to the quality standards, these must meet more environmentally friendly requirements. As for food, agriculture - raw seafood or processing, these must comply with food safety and hygiene regulations. Compliance with these regulations does not stop at the final stage of customs clearance, but must be closely monitored from production, transportation to customs clearance and consumption. In addition, there is an irrefutable fact that for selling goods today, it is necessary to go far and wide to reach the world’s shelves, are required to meet the standards with the decisive support of technology.

Accordingly, the conversion of production technology to create products benefiting from incentives from FTAs, as well as products that meet the trends of international markets is very important for Vietnamese enterprises. However, the conversion does not just stop at improving the management process, upgrading the production line system must be taken into account with new production technology.

Enterprises apply technology innovation

As a late born enterprise compared to many senior dairy companies in Vietnam, the policy of NutiFood Milk Joint Stock Company to select technology investment was a prerequisite step, so the company's production line at every stage also prioritized the most modern technology. In particular, to conquer difficult markets like the US, Nutifood also has to reinvest its modern production lines to meet the strict standards of the US Food and Drug Administration (FDA), one of the world's leading organizations with demanding food standards. So far, NutiFood has been granted FDA certification by this organization worth up to millions of dollars. Now, NutiFood's Pedia Plus line of ready-to-eat infant formula is available in more than 300 supermarkets in California State. To deploy the project "Nuti IQ for children to school", NutiFood experts ordered from the Tetra Pak Company in Sweden, and it took a lot of time and effort to research for the company to make its own. Gave NutiFood additional Flexdos equipment to the production line worth nearly 1 million USD (2010).

In order to meet the general trend as well as to meet the needs of the international market, Cuong Phat Co., Ltd., determined that each product made must be in parallel to the two main purposes of function and decoration. By promoting diversity, there is a mix of traditional Vietnamese, Asian as well as Western traditions that are the basic direction for the products of the enterprise to match the development trend and taste of many countries in the world.

At the same time, to improve competitiveness in the integration time, besides investing in factories and equipment (such as electric furnaces, automatic glazing lines...), since 2003, Cuong Phat Company has applied the advanced quality management system according to ISO 9001-2000 (later 9001- 2008) to ensure the entire operation of the company is always controlled and constantly improved. Especially, Cuong Phat also implemented the Kaizen program, using 7 improvement management tools in production management. The company also works with customers to develop standards of quality and social-environmental policies in accordance with international standards with the aim of meeting user-friendly standards and sustainable development. As a manufacturing plant, special attention must be paid to the treatment of wastewater; the source of raw materials must have a certificate of origin and be non-toxin before production.

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In addition, in the textile and garment sector, according to Ms. Nguyen Thi Tuyet Mai, Chief Representative of Vietnam Textile and Apparel Association in Ho Chi Minh City, the association's members are trying to find support loans to convert property technology export to meet environmental friendly standards, such as reducing fossil fuel use, reducing water use, recycling generated waste. Or as the case of Thai Son Nam Plastic Company, to meet the requirements of producing environmentally friendly packaging products for export to the US market, the company had to invest in a completely new production line costing up to 12 million USD.

In the period of industrial 4.0 and global competition, to increase labor productivity, improve quality, product value, competition and retain customers at home and abroad, businesses need to have investment strategies and technological innovation to meet the requirements of production, business and enterprise development.