Viet Nam News
As an important trading with a strong agriculture sector, Việt Nam has great potential to become a strategic exporter of agricultural products to the Republic of Korea (RoK), Hong Sun, vice chairman of the Korean Chamber of Business in Việt Nam, tells Việt Nam News reporter Nguyễn Phương Thảo
How do you assess the export potential of Vietnamese agricultural products, as well as Korean interest in this sector?
The Republic of Korea has an area of 100,000sq.m, nearly one third of Việt Nam. However, the population of RoK is quite large at over 52 million. Therefore, Korean demand for food products is significant. Due to inadequate food supply from domestic producers, RoK depends heavily on imports of agricultural products.
Korea has been importing a large number of agricultural products from China for many years; however, Korean customers are not as interested in Chinese goods anymore due to low standards and bad quality.
Currently, the RoK government is seeking strategic partners for providing agricultural products to meet increasing demand of the Korean people.
Việt Nam is one of RoK’s most important trade partners and an agricultural country. Therefore, Việt Nam has great potential to become a strategic exporter of agriculture products to Korea. Furthermore, since the Việt Nam – Korea Free Trade Agreement came into effect in December 2015, Việt Nam has more advantages in exporting goods to the RoK.
What would you say are the main obstacles for Vietnamese firms in exporting agriculture products to the RoK market?
From Việt Nam’s side, the biggest obstacle is the lack of large scale, hi-tech farms that meet quality standards. With the current model of small-sized farms and households being the main production units, it is difficult for the country’s suppliers to satisfy Korean market in quantity as well as variety.
Then, the RoK government is very strict about quarantining food products. At present, RoK only accepts dragon fruit and mangoes from Việt Nam.
Korea also needs lemon, avocado and many types of herbs, but Vietnamese products still face quarantine obstacles.
In the coming time, Vietnamese exporters should co-operate with Korean importers and get information and advice on quarantine issues. For example, they should get information about which kinds of pesticides or fertilisers should be avoided for exporting produce to the Korean market.
Currently, the RoK imports a lot of agricultural products from China. Can the increasing interest in Vietnamese agricultural products be sustained? What should Vietnamese farmers and enterprises do to sustain this interest?
China’s products do not meet the taste of Korean customers. People buy them only because of low prices. However, cheap prices often go parallel with bad quality and cheating, like using prohibited chemicals.
The Korean Government has discovered some cases of cheating in imported Chinese goods. For instance, Chinese importers put lead into crabs to make them heavier, and this has led to decreasing confidence in Chinese products.
Food has a direct, significant impact on human health, so if you lose your reputation once, it is difficult to win customers’ trust the second time.
Therefore, Việt Nam should strictly follow the policies and regulations when exporting products to the RoK, building trust and reputation for “Made in Việt Nam” products.
How can the Korea Chamber of Business in Việt Nam (KORCHAM) support Vietnamese exporters?
KORCHAM, in accordance with Korean Agriculture and Food Distribution Association in Việt Nam (KAFDA), are supporting Korean enterprises in approaching Việt Nam’s agriculture market.
KORCHAM’s representatives have emphasised the important position of Việt Nam in talks with the Korean government, promoting trade co-operation between the two countries.
From our experience, we have found that Việt Nam lacks “product collection centres” where agricultural products can be gathered, classified and packaged, serving both domestic demand and exports.
Moreover, the “cold chain” is considered one of the most significant systems in developing agriculture. The Vietnamese Government should co-ordinate with related ministries, departments and local agencies to set up “cold chain” systems all over the country.
At present, one Korean enterprise is discussing with the RoK government a proposal to support Việt Nam in establishing the product collection centres. However, I cannot reveal that company’s identity yet.
The number of RoK enterprises investing in Việt Nam has increased significantly. How do you evaluate trade relations between the two countries?
There are over 6,000 Korean enterprises in Việt Nam at present, and this number will increase significantly if supported by the Vietnamese Government.
During the visit of South Korean (former) president Park Geun Hye to Việt Nam in 2013, leaders of both countries targeted a bilateral trade turnover of US$70 billion by 2020.
However, this year, the two sides have increased this target to $100 billion, thanks to successful and effective co-operation over recent years.
We also encourage Korean firms, when investing in Việt Nam, to look at long-term instead of short-term benefits. We ask Korean businesses to follow all Vietnamese laws and pay attention to their Corporate Social Responsibility (CSR) so as to become strategic partners in the long run. — VNS