Halal products from a Vietnamese firm showcased on the sidelines of a conference in Hanoi. (Photo: VNA) Nguoi Lao Dong (The Labourer) newspaper reportedKelly Luong, Director of Beyond World Company, said her enterprise is teamingup with the Investment and Trade Promotion Centre of Ho Chi Minh City (ITPC).Together, they will organise a trip for Vietnamese businesses to Malaysia toexplore the halal market and meet directly with some importers of halalproducts there.
After a seminar on promoting exports to the Malaysian market heldin HCM City in June, many exporters looking to provide halal products to ASEANmarkets contacted her company. Her firm successfully connected severalVietnamese agricultural and food processing enterprises to sell halal productsto Malaysia, including big brands such as Bidrico and TH True Milk.
According to the Vietnamese ambassadors to Malaysia and Indonesia,the supply chain disruption caused by the COVID-19 pandemic and theRussia-Ukraine tensions opened up unprecedented opportunities for Vietnameseexporters.
For example, Malaysia is short on chicken and rice, so it wants toexpand its imports of these items from Vietnam. Particularly for rice, thecountry has raised the import quota of Vietnamese rice from 520,000 tonnes to700,000 tonnes each year, because Russia and Ukraine have stopped exportingwheat.
In terms of the Indonesian market, Tran Phu Lu, Deputy Director ofITPC, said that this country, with a population of 270 million, is one of thelucrative import markets for Vietnam.
Two-way trade saw a yearly increase of 40% yearly to 11.4 billionUSD. Trade in the first seven months of 2022 surpassed 8 billion USD, up 23%year-on-year, with seafood and coffee being items with a large export amount.
Many businesses have regarded Indonesia as an easier market thanthe US, Europe, and Japan. The similarity in culture, close geographicaldistance, and preferential tariffs within the bloc have also been named asadvantages for Vietnamese goods to penetrate this market, Lu said.
Difficult to compete on price
Despite opportunities available in the ASEAN halal food market,Vietnamese exporters have to date exported only a small amount of halalproducts to some countries in the region.
Nguyen Ngoc Luan, Founder and CEO of Meet More Coffee, told Nguoi Lao Dong that his company had yetto receive orders to export agricultural products to ASEAN markets such asMalaysia, Indonesia and Brunei.
Luan said it was difficult for his firm and buyers of suchcountries to find a common voice. In addition to the requirement for halalcertification and a separate production line for halal products, the two sideshad to agree on the selling price.
Vietnamese enterprises lag behind some neighbouring countries,such as Thailand, in deep processing technology, so it was hard for them tocompete on price. Although the ASEAN halal market has much potential, hisenterprise would conquer the regional market only after it successfullypenetrated markets far away, such as the US and the EU.
Meanwhile, a seafood processing enterprise director in HCM Cityalso said he had not found an opportunity to sell goods to halal markets inASEAN despite successfully exporting to the Middle East for many years.
The director, who wanted to be anonymous, blamed thisunsatisfactory performance on the fact that ASEAN countries had manysimilarities in products, so Vietnamese goods did not have a competitiveadvantage in price.
Truong Tien Dũng, Standing Vice Chairman of the Food and FoodstuffAssociation of HCM City, said most Indonesian and Malaysian buyers wantVietnamese businesses to build new factories to produce goods for them, asthese importers are not satisfied with the current separate production line forhalal products in domestic enterprises' factories.
However, it was not feasible for Vietnamese enterprises to investin a separate factory to serve small orders when they take the first steps topenetrate new markets, Dung said.
Tran Viet Thai, Vietnamese Ambassador to Malaysia, urged theenterprises to have specific strategies to enter this halal market fromconsulting, training, cooperation and investment.
Thai also said Vietnam needs a unified agency to head the halalmarket. The Ministry of Agriculture and Rural Development could propose to theGovernment to build this agency, making it easier for ambassadors to connect./.
VNA
