Vietnam: CPTPP pressures to force agricultural reforms
Due to the poor competitiveness of Vietnamese agricultural and livestock products, agriculture will be significantly impacted by the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). However, it will also be a driving force for the institutional reform of Vietnamese agriculture.
Large-scale production to strengthen competitiveness
Giving his opinion about the ratification of the CPTPP, Nguyen Viet Dung, a deputy from Ho Chi Minh City, said that agriculture needs further investment due to the increasing competitiveness of agricultural products from other signatories to the agreement.
“Advanced technology is now globally available, and Vietnamese enterprises are able to make purchases and the technology will be transferred. What Vietnam needs to establish is large-scale agricultural production,” he emphasised.
Being aware of the competition breaking out when the CPTPP takes effect, Lavifood’s current strategy is to focus on million-dollar projects, as well as closed-loop manufacturing to inflate export value.
Analysing the opportunity for Vietnamese vegetable and fruit exports, general director of Lavifood Pham Ngo Quoc Thang said that a breakthrough is within reach if the country invests in larger-scale and more professional manufacturing.
Therefore, besides the two factories in Long An and Tay Ninh, Lavifood has been co-operating with Korean-based ILMI Agriculture & Fisheries Company Limited at its vegetable and fruit processing factory in Hai Duong province’s VSIP. The factory has an annual capacity of 15,000 tonnes and a total investment capital of VND1.5 trillion ($65.2 million).
Regarding livestock products, especially pork, the pressure is forecast to rise significantly once the CPTPP takes effect, yet it is an ideal opportunity for enterprises to create value-chain-based production, including pork processing and exporting.
For instance, Bien Dong DHS Limited Liability Company has just inaugurated the largest complex in the Southern region for pork production and processing, with the intention of developing green husbandry practices, providing organic, safe pork with traceable origin.
Obviously, the Vietnamese agriculture is going to face piles of difficulties when the CPTPP comes into effect, however, restructuring and building out larger-scale production chains could enhance its competitiveness, as can be seen in the number of projects and export revenue figures.
By The Hai / Vietnam Investment Review