Vietnam's food processors court global investors hinh anh 1A panel discussion at a conference to promote investment in the food processing industry held on the sidelines of the Vietnam Foodexpo in HCM City on November 16. (Photo: VNA)

HCM City (VNA) - Vietnam’s food processing industry offers huge investment potential for investors both in terms of the domestic market and exports, according to the Ministry of Industry and Trade. 

Speaking at an investment promotion conference held on the sidelines of the Vietnam Foodexpo in HCM City on November 16, Deputy Minister of Industry and Trade Ho Thi Kim Thoa said the country’s food processing industry has failed to meet market demand. 

She was implying it meant a huge opportunity for investors entering the sector now. 

In the next 20 years, with 5-6 percent economic growth feasible and the imminent increase in urbanisation and development of the retail market, demand for food would continue to increase, especially for high-quality processed products, she said. 

Besides the promise of the domestic market, there is also huge potential for exports, she said, pointing out that for many years Vietnam has been one of the world’s largest exporters of many farm items like rice, coffee and cashew. 

Last year Vietnam earned 30.14 billion USD from agricultural, forestry and seafood exports. The figure is expected to cross 31 billion USD next year. 

“With such a wide range of investment and co-operation opportunities [available], I believe foreign investors should not miss the opportunity to exploit Vietnam’s food industry. At the same time, Vietnam’s businesses, organisations and localities in need of foreign investment should actively solicit foreign investment,” Thoa said. 

Bui Huy Son, Director General of the Vietnam Trade Promotion Agency, said with a market of over 90 million and food consumption projected to grow at 18.6 percent annually until 2019, abundant raw materials, the Government’s investment incentives and export advantages arising from free trade agreements, Vietnam is definitely one of the most attractive investment destinations for the food industry. 

The Government has sped up equitisation of State-owned enterprises, offering good opportunities for investors, he said. 

“The State Capital Investment Corporation is selling stocks of more than 200 companies, of which 50 are in the food industry. This will be a good opportunity for investors to do M&A deals.” 

Dang Xuan Quang, deputy director of the Foreign Investment Agency, said the country has attracted total investment of 290.6 billion USD, but only 7.6 billion USD in the food processing industry. 

The investment in the food sector has been mainly in areas that offer quick returns such as agro-processing, alcoholic beverages and seafood processing, he said. 

The foreign investors have mostly been from Asian countries such as Thailand, Malaysia, the Republic of Korea, and China, while investment from countries with a developed food processing industry such as Japan, the US, Australia and European nations has been low, he said. 

While Vietnam does not offer specific incentives for the sector, what it generally offers foreign investors in terms of income tax, land rental, support for developing raw material zones and others are competitive compared with the rest of the region, he said. 

Claudio Dordi, the technical assistance team leader of the European Trade Policy and Investment Support Project (EU-Mutrap), said the increasing demand for hygiene and food safety makes it a good opportunity for firms with an technological edge to invest in the Vietnamese food sector. 

With the country’s advantages with respect to trade policy, human resources and others, “investing in Vietnam is a win-win opportunity for foreign investors,” he said. 

Nam Sang Kun, a foreign expert in investment promotion at Vietrade, said Vietnam is regarded as a new manufacturing base in the Asia-Pacific after China and many Korean firms plan to enter the country.-VNA