Improving position in global supply chain

By applying post-harvest agriculture preservation technology, Vietnam has achieved remarkable growth in vegetable exports, with over 2.5 billion USD, up more than 30% compared to the same period last year. Vietnam should see a higher position in terms of vegetable and fruit exports in the global supply chain.

“Applying higher technologies in agriculture is one of the significant elements in engaging in international standard supply chains. Vietnam has successfully achieved advances in the application of new technologies in production”, economic expert Nguyen Minh Phong said.

However, according to the latest report of Central Institute for Economic Management, currently only about 21% of SMEs in Vietnam are linked to a global supply chain, much lower than other countries in the region. Vietnamese rice, coffee, rubber and many other agricultural products only see farmers process raw materials which are then exported to foreign companies. This means they only benefit from a tenth of the value chain of such products.

“If Vietnamese businesses don't build their own distribution channels delivering Vietnamese products to customers, we can't directly participate in the supply chain”, Dao Duc Huan – Head of Rural Development Apartment, Institute of Policy and Strategy for Agriculture and Rural Development – said.

“The biggest obstacle of Vietnam is the organisation of agricultural production. Our agriculture is essentially based on small-scale agriculture or dispersed agriculture. The weakest point of the export value chains are the lack of brands. The key point is that we need to have professional investment and sustainable co-operation between businesses and government”, Vu Tien Loc – President of Vietnam Chamber of Commerce and Industry (VCCI) – said.

According to experts, in order to want to participate in global supply chains, Vietnamese firms need to define their key sectors or industries related to processing industries or technological products, rather than mining and farming. By improving their position in global value chains, enterprises will have more opportunities to access advanced technologies and improved investment flows from other countries.