Wednesday, August 15 2018


Exporters face significant challenges

Update: April, 23/2012 - 10:50

HA NOI — The country's exports are experiencing significant challenges, according to a poll released by the Viet Nam Trade Promotion Agency.

The three-month survey was launched last August and involved 200 participants, including exporters, trade associations and promotion centres, along with overseas trade representative agencies.

More than 24 per cent said companies faced "extreme difficulties" related to capital shortages, and nearly 30 per cent said the situation was "rather difficult".

Related to the lack of input materials, nearly 17 per cent said the situation was "extremely difficult" and about 27 per cent said "rather difficult".

With regards to complicated market requirements, 22 per cent responded with the first answer and 38 per cent with the latter.

As for transportation and storage costs, the ratios were 19 per cent and 40 per cent, respectively.

Administrative procedures were also proving costly for enterprises, the report noted.

"Companies can cut input costs, minimise wages and manage human resources effectively, but they have no way to reduce social transaction expenses," experts at the trade promotion agency wrote in the report. They also pointed out that local exporters mainly determined prices for their products based on the prices of goods already available on the market. Meanwhile, no groups of domestic products had acquired a share exceeding 10 per cent on the global market.

Local firms couldn't implement "low-cost" strategies, a basic method that enables success by continuously reducing prices, as a result of limited production capacity.

This meant that Vietnamese exporters had no way of defining their own prices and would continue to depend on global prices in the long term, they said.

Overseas trade representative agencies said local exporters also failed to develop effective distribution systems, although many firms had begun to sell products with Vietnamese brand names.

They could mainly sell products to foreign importers, distributors and agents but hadn't directly approached foreign consumers or opened large shops and retail chains in international markets.

Related to this capability, up to 62 per cent of the polled trade representative agencies assessed local firms to be "very weak".

Viet Nam Trade Promotion Agency director Do Thang Hai suggested the Ministry of Industry and Trade should assist exporters by building master plans and projects to promote trade.

"It is necessary to build a general long-term strategy for the whole country," he said. "There should be specific targets and themes every year with responsibilities assigned clearly to trade promotion organisations."

The agency's market research and development experts said Viet Nam should change its production structure in a way more suitable to export direction.

They suggested the country increase technological content in export products, diversify commodities and develop support industries which had a close connection with global production and technology transfer networks.

"The change in production structure is not a thing that can be done from one to three years, but we need plans and roadmaps to do it," they wrote.

Experts said the country's export market structure should be developed by 2020 as follows: Asia 46 per cent, Europe 20 per cent, America 25 per cent, Africa 5 per cent, and Oceania 4 per cent. — VNS

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