The food industry has many advantages in increasing exports

Sustainable development trends in the food and beverage industry

Under the general difficult impact of the world economy and the domestic economy, does the food processing industry in Ho Chi Minh City encounter any difficulties and challenges, madam?

According to statistics from Ho Chi Minh City, the industrial production index (IIP) of Ho Chi Minh City in the first 6 months of 2023 increased by 1.9% compared to the same period in 2022, but the IIP index of the food processing industry decreased slightly compared to the same period in 2022. The index decreased by 1.4%, although not large, this is not a good sign because in the past 5 consecutive years (including 2 years of the Covid-19 pandemic), this index did not decrease.

The main reason comes from the global economic recession, causing a decrease in export orders from the food processing industry and domestic consumption. In addition, there is also the impact of events arising from the Covid-19 epidemic, the Russia-Ukraine war, inflation, energy shortages, logistics and warehousing. Prices of production materials and logistics service fees fluctuate constantly and tend to increase, which has a significant impact on businesses' receipt of new export orders.

Along with that is a change in consumer’s behavior, becoming stricter and stricter in food choices. Products that have strengths in Vietnam in general and Ho Chi Minh City in particular are facing competition from countries such as India, China, Thailand, Bangladesh... requiring businesses to constantly innovate and create suitable adaptation. This is an inevitable reality when Vietnam has not yet gained the initiative in exporting goods in terms of market, production, and production technology. Meanwhile, the flexibility and adaptability of businesses today is still primitive because they are mainly small and medium-sized enterprises, and their potential in terms of capital and high-quality human resources is still low, Increasing strict non-tariff barriers in the markets of exporting countries is a big challenge for exports, especially agricultural and aquatic products and processed foods...

However, the food industry of Vietnam in general and Ho Chi Minh City in particular has many advantages to take advantage of accelerating the process of developing the domestic market, promoting international trade cooperation, increasing exports and affirming the position of Vietnamese food products in the world market.

What are the opportunities for food businesses to recover, increase export orders and affirm the position of Vietnamese food products in the world market?

First of all, there is a national opportunity from the Government's and Ho Chi Minh City's promotional policies in developing agriculture, promoting deep and sustainable processing, creating the foundation and conditions for strong open development. Expand the scale of businesses in the area. Especially recently, when Ho Chi Minh City has received an important boost, Resolution 98 on piloting a number of specific mechanisms and policies for the development of Ho Chi Minh City was just issued by the National Assembly, which is expected to create opportunities to stimulate capital for businesses. Enterprises invest in production and business expansion.

At the same time, food businesses are having international opportunities from new generation Free Trade Agreements (FTAs); Along with the opening of the Chinese market, it has had a positive impact on commodity export activities, bringing great opportunities in expanding markets and exports.

In addition, Ho Chi Minh City plays the role of an economic "locomotive", connecting the southern key economic regions in particular and the whole country in general, is a domestic and international traffic hub and is also a knowledge center, service and culture. From production and processing systems to logistics and import-export distribution systems, all are rich, diverse and developing at high speed. This is a favorable condition for the development and construction of food supply chains, contributing to making Ho Chi Minh City an important hub in the food supply chain of the country and the region.

Ho Chi Minh City has many favorable conditions in attracting and developing both investment and high-quality human resources with deep expertise in food processing, packaging, preservation and quality control, and developing new ingredients and products, meeting increasingly high standards from the international market.

In your opinion, what do businesses need to do to take advantage of these advantages?

To take advantage of opportunities for mutual development in the current context, food industry businesses should prioritize focusing on short-term solutions, such as: restructuring, controlling cash flow and exchange rate risks, especially it is necessary to be careful when spending on investments that do not generate immediate cash flow or putting money into projects with a long payback period.

In the long term, it is necessary to quickly innovate to survive and develop. Innovate business strategies towards sustainable development, based on innovation, invention, and invention to create products and services that must be able to participate in the global value chain by competing in high productivity, good quality and low cost, and associated with business efficiency of businesses with socio-economic and environmental protection.

At the same time, diversify market and customer strategies. Promote the application of high technology, digital transformation, and develop products with high competitiveness and good quality towards green production, green growth, circular economy, and environmental friendliness...