HCM CITY — Việt Nam’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 Wednesday, Deputy Minister of Industry and Trade Hồ Thị 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 per cent 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 Việt Nam has been one of the world’s largest exporters of many farm items like rice, coffee and cashew.

Last year Việt Nam earned US$30.14 billion from agricultural, forestry and seafood exports. The figure is expected to cross $31 billion 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 Việt Nam’s food industry. At the same time, Việt Nam’s businesses, organisations and localities in need of foreign investment should actively solicit foreign investment,” Thoa said.

Bùi Huy Sơn, director general of the Việt Nam Trade Promotion Agency, said with a market of over 90 million and food consumption projected to grow at 18.6 per cent annually until 2019, abundant raw materials, the Government’s investment incentives and export advantages arising from free trade agreements, Việt Nam 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.”

Đặng Xuân Quang, deputy director of the Foreign Investment Agency, said the country has attracted total investment of $290.6 billion, but only $7.6 billion 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, Taiwan, Malaysia, 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 Việt Nam 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 Việt Nam is a win-win opportunity for foreign investors,” he said.

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