Vietnam’s industrial value in 2009 dropped to a record low in 10 years. Hence, apart from increasing export turnover, local businesses should improve the quality of their products, reduce production costs and sharpen their competitive edge.
Focusing on production
It is essential to increase the value of exports, reduce the import surplus and focus on increasing production. According to Do Huu Hao, Deputy Minister of Industry and Trade, Vietnam’s industrial value in 2009 dropped to a record low in 10 years. Hence, he said, apart from increasing export turnover, local businesses should improve the quality of their products, reduce production costs and sharpen their competitive edge. “If domestic industrial production is not ensured, there will be problems for exporters,” Mr Hao said.
A representative from the Vietnam Garment and Textile Group reported that many businesses have failed to meet the demand from foreign markets as they are facing a shortage of workers and raw materials. The sector’s key programmes have not yet proved effective enough although the industry’s exports account for a large proportion of Vietnam’s total exports.
A representative from the Vietnamese Wood Processing Association, said that there are positive signs for the domestic wood processing sector as several major foreign markets, such as the US and European Union (EU) want to import wooden products from Vietnam rather than China. However, the sector is now facing numerous difficulties as it depends too much on imported materials (around 80 percent). It is also suffering from a severe shortage of skilled workers. The Government and the Ministry of Industry and Trade should further encourage the production of the necessary raw material in Vietnam and neighbouring countries.
Mr Hao stressed that it is important to ensure an adequate supply of electricity for industry. Now, because of the dry season hydro-electric power plants and agricultural production are facing power cuts. A shortage of electricity always causes problems for industrial production and export, he added.
He asked the Vietnam Electricity Group (EVN) to draw up plans to ensure an adequate supply of electricity for 2010, especially in the dry season. The EVN needs to build more reservoirs to supply more water for hydro-electric power plants as well as importing electricity from China. He also urged the oil and gas sector to put its thermal power stations into operation as soon as possible and import more coal to generate electricity.
In addition, the Deputy Minister of Industry and Trade, Bui Xuan Khu, said that local businesses should speed up key projects that produce fertiliser and electricity in order to increase exports and raise the value of industrial production.
Reducing import surplus
It is necessary to reduce the import surplus while increasing the volume of exports so that Vietnam can meet its targets for socio-economic development, Mr Khu emphasised. According to him, the Ministry of Industry and Trade is working with the relevant ministries and agencies to reduce the import of luxury products, such as cosmetics, mobile phones, cars and wine.
However, many businesses still buy foreign currency on the black market and use their bank accounts to buy luxury products, especially cars. Hence, tougher measures need to be introduced to control imports, he said.
According to Deputy Minister of Industry and Trade Nguyen Thanh Bien, Vietnam should promote the export of key agricultural products, such as rice, pepper, cashew nuts and coffee, which account for a high proportion of the country’s total exports. Exporters should also work closer with producers to keep products for export in 2010 to prevent price hikes.
He also noted that as the EU has issued a new law requiring identification of the origin of seafood products, the fisheries sector will have to adapt to it.