Removing difficulties for export enterprises to participate in the global supply chain

Barriers from export markets

According to the Department of European - American Markets, Ministry of Industry and Trade, after the Covid-19 pandemic and recent geopolitical and economic instability, many corporations and retail/wholesale distribution channels are promoting diversification strategies, ensuring sustainable supply sources and have chosen Vietnam as a strategic location in their global supply chain.

At the Seminar and interview between exporting enterprises in the textile, agricultural and processed food industries to find more effective connection solutions for enterprises participating in the Viet Nam International Sourcing 2023 event series taking place this afternoon (August 11), Mr. Christian Merizalde Aguilar - Head of Business Strategy, Grupo Merica Foods - said that to take advantage of the EVFTA Agreement, Grupo Merica Foods is shifting its business from Thailand to Vietnam, accordingly, this enterprise will import about 110 containers of goods from Vietnam in 2023, an increase compared to 2022 (77 containers of goods).

“ The quality of Vietnamese goods is improving and becoming more competitive, so in the future, Grupo Merica Foods also wants to work directly with Vietnamese manufacturers to jointly develop production plans to supply products that meet the needs of the international market, ” said Mr. Christian Merizalde Aguilar.

During the Covid-19 outbreak, Takko Company (Germany) had a number of successful business cooperations with Vietnamese textile and garment enterprises and currently Takko is looking to expand its business, move its operations from China to Vietnam to find more Vietnamese suppliers and expects to expand its business activities in Vietnam more in the future.

However, Mr. Radek Sorcik - Senior Director of Purchasing, Quality Management and Social Environment and Governance of Takko Company - said that in the past, Takko had some product groups with potential and important in its development strategy such as sportswear , outdoor clothing, T-shirts, and trousers. Meanwhile, these Vietnamese products have been and are facing a lot of competition from Bangladesh and China.

Therefore, if they want to expand the export of these products, Vietnamese enterprises must focus on investing heavily in manufacturing factories, fabric quality and price. "The market is increasingly demanding in terms of legal and environmental standards, so to be eligible to participate in Takko's supply chain, Vietnamese enterprises need to focus on research and develop appropriate business strategies," Mr. Radek Sorcik recommended.

Europe is one of Vietnam's leading export markets, however, changes in consumer trends as well as new regulations and standards are posing major challenges for Vietnamese export enterprises.

At the seminar, Mr. Tran Ngoc Quan - Vietnam Trade Counselor in Belgium and the EU informed that the European market is currently moving towards green and clean food products. Along with that, environmental, social responsibility and labor standards are issued more and more strictly. In particular, the European Commission (EC) has just proposed to apply a mandatory extended producer responsibility (EPR) program to textile and garment manufacturing enterprises. Accordingly, textile and garment manufacturing enterprises must ensure responsibility for the entire life cycle of the product, supporting the sustainable management of textile waste throughout Europe.

According to Mr. Tran Ngoc Quan, the introduction of stricter regulations on textile products from the EU will put great pressure on Vietnamese export enterprises, such as forcing them to prepare circular production processes, reduce textile waste; use environmentally friendly and recyclable materials. “ From market regulations, orders will no longer be massive, limiting market access and cross-border e-commerce activities. However, if the standards and requirements are met, it will be an opportunity for Vietnamese goods to have a firm foothold in the European market, ” said Mr. Quan.

Regarding the US market, Mr. Tran Minh Thang - Head of the San Francisco Trade Office - also said that the US is a potential export market for Vietnamese goods, many Vietnamese food and processed products are increasingly popular and widely consumed in this country. However, according to Mr. Tran Minh Thang, there are currently many distributors and buyers in the market who are looking for sources of goods from nearby markets, which is causing disadvantages for Vietnamese export enterprises.

Support solutions for businesses

By the end of June 2023, Vietnam exported 153 thousand tons of raw pepper, reaching a turnover of 486 million USD. Compared to the same period last year, export output increased by 22% but turnover decreased by nearly 15%, equivalent to 82 million USD. Therefore, with the goal of penetrating the retail system, Ms. Hoang Thi Lien, President of the Vietnam Pepper Association shared that the Association hopes to be able to connect with large retail systems such as Walmart and Costo through the connection assistance of Vietnamese representative agencies abroad.

“ Vietnamese Trade Offices abroad need to support further connections with markets to promote the building of information systems, forecasting and developing markets, especially foreign markets, so that pepper businesses can take advantage of opportunities to penetrate and expand markets; boost pepper exports and maintain and develop their position in potential markets, ” Ms. Lien suggested.

Mr. Tran Minh Thang said that the United States currently has a demand for goods from Vietnam, but this is also a market that receives many offers from many businesses around the world, so Vietnamese businesses need to be very patient in approaching and offering products. In addition, businesses need to actively participate in trade promotion programs, exhibitions, connect with relevant agencies, create prestige and build customer trust.

“In the coming time, the Trade Office will continue to take advantage of every opportunity to promote the image and brand of Vietnamese pepper to the local market. At the same time, it will implement measures to promote quality and compliance with food hygiene and safety and business responsibility to Vietnamese enterprises to make the product more attractive to attract businesses to invest in expanding the market, ” said Mr. Thang.

In order to more effectively support businesses in their efforts to participate more deeply in the global production and supply chain, promote connections between distribution channels, foreign importers and domestic manufacturing and exporting enterprises, the event series "Connecting international supply chains" (Viet Nam International Sourcing 2023) organized by the Ministry of Industry and Trade will take place from September 13-15, 2023, including conferences, seminars, trade connection activities and the Exhibition Connecting international supply chains - Viet Nam International Sourcing Expo 2023.

The event promises to attract 8,000 visitors and trade with 200 international delegations from 30 countries and territories. The businesses selected to introduce to importers, distribution groups and international purchasing delegations are all businesses that have achieved international certificates, have high-quality products in industries that Vietnam has strengths in and international distributors and retailers have demand for such as: Food, textiles, footwear, backpacks, handbags, sports and outdoor equipment, household appliances and furniture, supporting industries...

Mr. Ta Hoang Linh - Director of the European - American Market Department said that the Ministry of Industry and Trade has made efforts to remove difficulties and obstacles for Vietnamese enterprises and industry associations, thereby providing more effective support for enterprises in their efforts to participate more deeply in the global production and supply chain, promoting connections between distribution channels, foreign importers and domestic production and export enterprises.

At the same time, Vietnamese Trade Offices abroad have also provided guidance on policies of regions and markets, such as the United States and the EU, so that Vietnamese businesses have more information and can take advantage of opportunities in the transition to penetrate the market. " In the coming time, the European - American Market Department will also hold seminars, conferences, and forums to provide market information, continue to solve existing problems of businesses, and propose different strategies to remove difficulties and improve the competitiveness of Vietnamese goods in foreign markets," Mr. Linh emphasized.

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