Local food-processing industry ripe for investment

Vietnam’s food-processing industry has great potential for investment attraction, thanks to its large population, rising average income and consumption trends, according to experts at a conference held in HCMC today, November 14.


The conference, which was held by the Vietnam Trade Promotion Agency (Vietrade), under the Ministry of Industry and Trade, and the Foreign Investment Agency, under the Ministry of Planning and Investment, was aimed at stimulating foreign direct investment in the food-processing industry, reported the Vietnam News Agency.

A large number of foreign-invested food-processing projects have been set up in Hanoi; HCMC; and the southern provinces of Dong Nai, Binh Duong and Long An, according to the Industry and Trade Investment and Promotion Center of Vietnam with Vietrade.

These projects are mainly involved in the agricultural, aquatic and beverage processing sectors where investors can recoup their investments quickly.

The center’s director, Le Hong Minh, noted that local governments should take a proactive approach in zoning areas for the production of agricultural raw materials for investors. Also, land should be transferred to investors in line with prevailing regulations.

Minh noted that regulatory agencies should create flexible systems for mobilizing capital and encouraging the investors to develop their farms.

Vietnam enjoys considerable advantages in processing agricultural, forestry and aquatic products. The food-processing industry is thus forecast to have a growing need for capital attraction and technology investment, he remarked.

The country has established a system for producing agricultural, forestry and aquatic products, with a designed capacity of some 120 million tons of input materials needed per year, stated Vietrade’s deputy head, Hoang Minh Chien.

With some 7,500 firms and thousands of facilities and households involved in the produce-processing segment, the industry is growing at 5%-7% per year, added Chien.

However, there remain hindrances in the production value chain related to raw products and the low quality of materials and processed products.

He pointed out that supplies of input materials have yet to stabilize. Moreover, local producers whose competitiveness remains modest are heavily reliant on a number of foreign consumption markets.

To be competitive in developed markets requires the local processing industry to comply with stringent requirements on food security and quality, according to Dr. Frauke Schmitz-Bauerdick, director, Vietnam, at Germany Trade & Invest.

She stressed that proper machinery and equipment serve as a key factor in ensuring the quality of food products.

Increasing product value through food processing is an important trend that the local food-processing industry needs to pursue now, she continued.

She urged local food producers to be actively engaged in global supply chains as Vietnam is a member of many free trade agreements.

Some other officials suggested the Government take steps to raise the processing rate of agricultural, forestry and aquatic products as a top priority.


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