Hanoi (VNA) – Developing product chains is an important solution to sustainableexport growth, heard a conference in Hanoi on August 8.

Tran Thanh Hai, Deputy Director of the Import-ExportDepartment under the Ministry of Industry and Trade, said that product chainswill help cut out intermediary, reduce goods’ prices, raise the added value,and improve competitiveness.

Hai noted that Vietnam’s exports have seen strong growth inboth scale and production ability. Total export value recorded a year-on-yearrise of 21.2 percent to 214 billion USD last year.

Notably, the export situation this year is forecast to havemany opportunities for higher growth as commitments for internationalintegration have been implemented, helping reduce import-export tariffs.

The efforts of the Government and ministries inadministrative reform to provide a favourable business environment have aidedexport activities, he said.

In the first seven months of this year, total import-exportturnover reached 264.3 billion USD, up 12.7 percent year-on-year, of whichexports were valued at 133.6 billion USD, up 15.3 percent against the sameperiod last year, equal to 56.5 percent of the year’s target.

 “This has been abright point in the economy with high export turnover. However, there areshortcomings that pose challenges for the country’s exports,” he added.

He noted that protectionism became more common in the firstmonths of the year.

In addition, the country’s exports have depended on foreigndirected investment (FDI) enterprises, which accounted for 70 percent of totalturnover. This was because Vietnam has not had an export value chain, he said.

As an example, a representative from the Vietnam Textile andApparel Association said the country’s garment export value rose from 15.8billion USD in 2011 to 31 billion USD in 2017, accounting for 4 percent of theworld’s total turnover.

However, the sector has mainly performed cutting and sewingin the global garment and textile supply chain. Vietnamese garment and textilefirms have participated in simple outsourcing and lack the ability to providepackaging, resulting in low added value. The garment and textile industry hasalso relied on imported materials. The local companies have to import up to 86 percentof cloth for production and exports.

A similar situation has been seen in the agriculturalsector.

Vietnam has high agricultural output. However, most of itsproducts have not been exported widely due to limited processing capacity.Agricultural and seafood products have been mainly exported as raw materials.

Statistics from the Ministry of Agriculture and RuralDevelopment showed that the country has 700 agricultural chains certified assafe chains. However, only half of the total operates effectively.

Doan Anh Tuan, Chairman of The He Moi Tea Company Ltd, saidmost Vietnamese firms are small-scale and can not afford to invest in materialareas and modern processing and packaging equipment.

"Moreover, local firms have not built their own brandnames. The Government should have programmes to invest into technologies tocreate competitive products and take a firm foothold in the internationalmarket," said Tuan.

Participants proposed the country build agricultural chainsthrough consumption contracts between farmers, co-operatives and businesses tohave stable material areas. In addition, it should develop breeds with highoutput and use science and technologies in farming, harvesting, preserving,processing and consumption.

Experts said the support industry could be the foundationfor sustainable exports, so the Government should prioritise support industrydevelopment for sectors of mechanics, spare pare production, garment andtextile and leather shoes.

The solutions could be effective if the business communityparticipated, they said.

Previously, Prime Minister Nguyen Xuan Phuc approved a planto improve the competitiveness of exported products in Vietnam to create alegal framework for sustainable exports.

The plan aims to increase value of key export staples by 20 percentby 2020.

It hopes to gradually increase exports of agricultural andseafood products to the EU, Japan and the Republic of Korea markets in 2016-20with average growth rate of 8 percent a year.-VNA