Project to boost exports to Africa

Rice, which accounts for roughly 40 per cent of the country's total export turnover to Africa, is packed for export at the HCM City Food Company. The Ministry of Industry and Trade has approved a project to help exporters better exploit the African market. — VNA/VNS Photo Dinh Hue

HA NOI — A project to boost exports to Africa, a location considered to be a potential market for Vietnamese goods in the wake of saturation in traditional markets, was ratified by the Ministry of Industry and Trade (MoIT).

Under the project, the ministry will select a number of large exporters to focus on Africa specifically and they will be grouped together to focus on exporting special products to key markets in the region.

MoIT will also ask the Government to introduce policies to encourage small- and medium-sized businesses to do more business in Africa.

Besides rice, apparel, coffee, footwear, electronics and construction materials, the ministry will also urge exporters to ship goods that are in high demand in Africa, such as household utensils, consumer goods, food, plastics, mechanical goods and medicine.

Africa is the world's third largest continent with 54 countries and a total population of more than 1 billion. As the continent's economy is forecast to expand by about 4.5 per cent this year, they will likely need to import various necessities and a greater volume than in the past.

Currently, Vietnamese products are present in 53 African countries. The key export markets are Egypt, South Africa, Angola, Nigeria, Ghana and Algeria.

Strategic gateway

Two-way trade between Viet Nam and Africa has grown by an average of 45 per cent per annum. Last year, Viet Nam's exports to Africa reached US$1.56 billion, an increase of 20 per cent compared to 2008, of which South Africa accounted for roughly 30 per cent.

Do Quang Lien, commercial counselor to South Africa, said Vietnamese businesses should strengthen their investment and exports to South Africa as it is the continent's largest economy and a strategic gateway for trade between the continent and other countries.

Viet Nam's main exports to Africa include rice, consumer goods, textiles and garments, electronics, plastic and wooden products, coffee, motorbikes, dairy products, seafood and processing foodstuff. Currently, rice accounts for roughly 40 per cent of Viet Nam's total export turnover to Africa and it is forecast that the product will remain at the top of Viet Nam's exports to Africa for the next five years.

Although trade between the two countries has increased, Vietnamese exporters to Africa are still facing challenges, including incomplete legal policies, poor infrastructure, an undeveloped banking system and a lack of information about African countries in general.

Apart from Africa's remote location, which bumps up transport costs, the difficulty in making payments is a daunting one. Le Thi Thai Hoa, deputy director of the Ministry of Industry and Trade's African Market Department, said several African countries were saddled by outdated payment facilities, which deter Vietnamese enterprises from penetrating this market.

To deal with this, Hoa suggested businesses should actively contact her department and Viet Nam's trade offices in African countries to seek help, avoid fraud and minimise risk.

This year, Viet Nam targeted a 3-per-cent increase to $1.6 billion in export revenue to Africa. — VNS

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Africa offers huge trade potential

Workers at the Thuan An Production Trading and Service Co Ltd process tra fish for export. Domestic businesses are being encouraged to strengthen their exports to Africa. — VNA/VNS Photo Van Khanh

HCM CITY — Domestic businesses should strengthen their exports to Africa where demand for Vietnamese goods is huge, a senior trade official has said.

Speaking at a conference held last Friday, Ly Quoc Hung, head of the Ministry of Industry and Trade's Africa-West Asia-South Asia Markets Department said the promising market has great demand on consumer goods, machines, technology, and agricultural products, especially rice. "The African countries' rice demand reached nearly 10 million tonnes per year," he said.

Africa has plentiful unexploited natural resources, minerals and land. Its population is crowded and is growing rapidly but its capacity for agricultural and industrial production is weak.

Furthermore, Africa still benefits from the Generalised System of Preferences from the US and EU and Vietnamese businesses should take full advantage of it to set up production bases there.

Currently, Vietnamese products are present in 53 African countries. The key export-import markets are Egypt, South Africa, Angola, Nigeria, Ghana, and Algieria.

Last year, Viet Nam's exports to Africa reached US$1.56 billion, an increase of 20 per cent compared to 2008, with the main products including consumer goods, textiles and garments, electronics, plastic and wooden products, coffee, motorbikes, dairy products, seafood and processing foodstuff.

Viet Nam's imports reached $508 million.

Hung also said fields for cooperation in the near future include mineral exploitation and exploration, chemicals, textile and garment, agricultural product processing, agricultural machines, motorbikes and bicycle production.

Vietnamese businesses should pay much attention to trade and technical barriers, the production must meet the import requirements of the African countries. The payment method mainly used is Documents against payment (D/P), with just some countries using Letter of Credit (L/C).

For instance, the brands and information on products are written in English, French or the mother-tongue. Besides, the businesses need to thoroughly understand the customs and tastes of local customers.

Promising markets

At the conference, the commercial counsellors in Egypt, Algieria, Morocco, Nigeria and South Africa shared experience to give more support to Vietnamese businesses in Africa, which is a promising market for Vietnamese goods.

Nguyen Thi Hong, vice chairwoman of HCM City People's Committee said the commerce counsellors played as important bridges in attempt to help them become successful in the potential market.

City authority also highly evaluated the African market and would create more favourable policies to intensify the investment, trade and service development in this market.

She said the City had asked the Investment Trade Promotion Centre to carry out promotional programmes, organise many visits to make surveys on this market, as a result, the businesses would map out suitable strategies to expand their exports.

Do Quang Lien, commercial counsellor to South Africa said Vietnamese businesses should strengthen their investment and exports to the South Africa, which is the continent's largest economy and is a strategic transport gateway in trading between the continental and many other foreign countries.

Dang Ngoc Quang, commercial counsellor to Egypt said seafood was the key Vietnamese export product in Egypt. In the first six months, seafood turnover reached $25.93 million, of which tra and basa catfish turnover was $16.9 million and shrimp $8.1 million

"Viet Nam is seen as a strong seafood exporter, and it is able to provide various kinds of seafood at a competitive price and quality to the African market," he said, adding that Viet Nam could totally supply these products in the long-term and in huge volume.

Product diversification and promotional programme intensification are keys to help the domestic seafood businesses to expand exports.

The commercial counsellors to Algieria, Morocco, and Nigieria agreed that the businesses should take part in fairs, exhibitions and look for long-term and large contracts as well as popularising their images and brands to the market. — VNS

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