Promoting exports to Latin American markets through commodity distribution channels

Trade and investment have not yet reached their full potential.

Organized within the framework of the "Vietnam International Sourcing 2023" series of events jointly organized by the Ministry of Industry and Trade and the People's Committee of Ho Chi Minh City, the "Vietnam - Latin America Trade Forum 2023" has the theme "Promoting exports to the Latin American market through goods distribution channels".

Mr. Ta Hoang Linh - Director of the European and American Market Department, delivered a speech at the Forum.

In his opening remarks at the Forum, Mr. Ta Hoang Linh, Director of the European and American Market Department (Ministry of Industry and Trade), stated: For many years, trade and investment relations between Vietnam and the Latin American region have continuously developed and expanded, despite many difficult market periods.

In just five years, bilateral trade has doubled from $14.2 billion in 2018 (the first year the Vietnam-Latin America Trade Forum was held) to $23 billion in 2022.

Notably, in addition to leading trade markets in the region such as Brazil, Mexico, Argentina, and Chile, many emerging markets such as Panama, Colombia, and Peru have become bright spots in Vietnam's trade with Latin America, showing impressive growth rates in recent years.

“In terms of Vietnam’s trade relations, Latin America has always been among the most important markets. Not only is it a potential export market for Vietnam’s key products such as textiles, footwear, and agricultural and aquatic products, but Latin America is also a crucial source of raw materials and components for Vietnam’s manufacturing sector, particularly for products like corn, soybeans, and animal feed…” – Mr. Ta Hoang Linh stated.

Regarding investment, Vietnam continues to implement several important investment projects in Latin America with capital amounting to hundreds of millions of USD, such as telecommunications network development projects by Viettel Group in Peru and Haiti, and projects by Viglacera Corporation and Thai Binh Company in Cuba in the fields of infrastructure and consumer goods production. Conversely, as of the end of 2022, 21 Latin American countries had invested in Vietnam with 117 projects, totaling approximately 673 million USD in registered investment capital.

However, the value of trade exchange between Vietnam and Latin America remains modest and does not match its potential. Vietnamese and Latin American businesses still face many challenges in business cooperation, such as: long geographical distances, lack of direct freight transport routes, high logistics costs, language barriers, lack of market information, and especially in the current context, economic recession, geopolitical conflicts, and the prolonged impact of the Covid-19 pandemic, which have negatively affected global trade, including trade between Vietnam and Latin American countries.

In the first eight months of 2023, bilateral trade between Vietnam and Latin America reached US$13.4 billion, a 14% decrease compared to the same period in 2022. However, a positive sign is that the decline in imports and exports is gradually narrowing compared to the early months of the year, and some markets still showed positive growth in trade value during the first eight months compared to the same period in 2022, indicating signs of recovery in Vietnam-Latin America bilateral trade.

Ms. Tatiana Prazeres, Deputy Minister for Foreign Trade, Ministry of Development, Industry, Trade and Services of Brazil, delivered her speech via online platform.

Creating opportunities for businesses to access major distribution channels.

In the context of the current unstable global economic situation, promoting bilateral economic relations as well as within multilateral frameworks is essential to accelerate the global economic recovery process. The "Vietnam - Latin America Trade Forum 2023" is organized to support Vietnamese businesses in their efforts to participate more deeply in global production and supply chains, fostering connections between distribution channels, foreign importers, and domestic manufacturing and exporting businesses.

Businesses exchange and discuss at the Forum.

Accordingly, Mr. Mario Schuff, an economic and diplomatic expert and Director of Vietnam-Argentina relations at the Asian Chamber of Commerce, updated Vietnamese businesses on the current situation in the Latin American market, analyzing the opportunities and challenges for Vietnamese businesses in the region. He emphasized the enormous potential, but stressed the need for businesses to take systematic and professional steps.

Representing Latin American businesses at the Forum, Ms. Veronica (Coppel Group, Mexico), Mr. Federico Bucher (Cencosud Group, Chile), and Ms. Roberta Guttler Difini (Renner Textile Group, Brazil) shared useful information for Vietnamese businesses in researching, understanding, and entering the market. They also guided Vietnamese businesses in identifying potential product lines for each market, accessing and meeting quality standards and regulations, and getting their goods into distribution and retail groups in Latin American countries.

Representing Vietnamese businesses, Mr. Ly Hoang Hai, Director of Eurofins Company, and Ms. Nguyen Thi Thanh Ha, Business Director of Napoli Coffee Company, shared their practical experiences in trade transactions with Latin American countries, as well as advice for Vietnamese businesses cooperating with this region.

“The first thing businesses need to do is understand consumer habits, distribution channels, and geographical conditions, because neglecting these will affect export shipments. Furthermore, regarding payment, Vietnamese businesses should open Letters of Credit (L/C) to support both the importing and exporting parties. In addition, because this is a distant market with long delivery times, packaging must be chosen to suit consumption patterns and distribution channels in Latin America; and it must also have a longer shelf life. Especially, it's important to choose a shipping company that understands the market and has appropriate certifications for each country in the region,” shared Ms. Nguyen Thi Thanh Ha, Business Director of Napoli Coffee Company.

This year's forum, in addition to Vietnamese businesses, also saw the direct participation of nearly 30 Latin American business delegations. Immediately following the forum's discussions, businesses participated in a direct B2B networking session. At this session, Vietnamese businesses had the opportunity to directly understand the needs and requirements of Latin American businesses in finding Vietnamese partners, thereby opening up many opportunities for future cooperation.

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