The trade cooperation program between Ho Chi Minh City and other provinces has affirmed the right direction since 2011 thanks to the establishment of many commodity supply chains, promoting elements of the production chain to be cleaner, better, and more valuable.
Linkage for quality improvement
According to the report from the Department of Industry and Trade of Ho Chi Minh City, through the implementation of the trade cooperation program between HCMC and other provinces, localities have issued many supportive policies, facilitating enterprises in HCMC to develop production and business, invest in factories, expand barns, raise capital for farmers in cultivation and husbandry; and support farming cooperatives. Up to now, businesses participating in the HCMC market stabilization program have stable material areas in provinces.
There are 28 enterprises participating in the market stabilization program. The city has invested in 47 factories and production facilities; and 63 farms and farm clusters in the East-South West provinces with total investment capital of more than VND18,000 billion. Associated activities, advanced capital for farmers, and consumption of agricultural products reached VND3,200 billion per year.
Most of these businesses have built chains and formed stable and long-term material areas in provinces. Particularly, Saigon Coop has a system of warehouses, logistics, and supermarkets throughout the country, acting as a focal point to purchase on-site a large quantity agricultural products for the national market. Vissan associates with livestock farms in localities to consume an average of 31,000 tons of live pigs and 1,241 tons of live cows per year.
Similarly, Sagrifood also supplies an average of 80,000 gilts and piglets per year to livestock farms in 23 provinces and cities nationwide, of which 80% are in 15 provinces and cities in the East-South West, mainly in Dong Nai and Binh Duong; Ba Huan Company also has a food and egg processing factory in Long An, Binh Duong, and Hanoi, and a system of livestock farms covering all provinces and cities.
For the provinces linked to HCMC, Chau Thi Le, Deputy Director of the Department of Industry and Trade of Long An province, said that although this unit had actively mobilized farmers to produce safely according to VietGAP standards, it was still ineffective. Only when implementing the trade cooperation program with HCMC, the pressure from demand has motivated farmers to change their production behavior. As a result, Long An has built 17 safe agricultural supply chains and is continuing to build three new chains. Many models of clean production and organic production are also being deployed.
Exploit the market in depth
Along with the development of raw material areas, enterprises’ distribution system has also expanded, thereby forming supply chains. Up to now, businesses in HCMC have invested in 336 supermarkets, nearly 2,500 convenience stores in provinces and cities across the country (excluding HCMC). In which, a number of large units such as Saigon Co-op invested in 84 Coopmart supermarkets in 42 provinces and cities; Lotte invested in 11 supermarkets in eight provinces and cities; BigC invested in 27 supermarkets in 20 provinces and cities; MM Mega Market invested in 17 supermarkets in 14 provinces and cities; Bach Hoa Xanh invested in 1,093 convenience stores in 23 provinces and cities; and Nguyen Kim invested in 45 electronics supermarkets in 29 provinces and cities.
Additionally, a number of large companies specializing in manufacturing and supplying essential products such as Vinamilk, NutiFood, TH Truemilk, Vissan, Cau Tre, Vinh Tien, Huong Mi, Nakydaco, and Thanh Thanh Cong have developed their network in all provinces and cities nationwide. Some companies producing fresh food such as Vissan and Ba Huan have established distribution and supply networks for the Northern market.
In particular, within the framework of the program, the supply-demand meetings held periodically since 2012 are really effective. The scale is expanding day by day, the goods are more and more plentiful, the number of participating localities and enterprises as well as signed contracts, supplied goods is also increasing.
Up to now, there have been 3,193 contracts and memoranda of understanding signed with the estimated average implementation value of VND4,500 billion per year. Bui Ta Hoang Vu, Director of Ho Chi Minh City Department of Industry and Trade said this result was the driving force for cooperation and leverage, opening a new stage.
In the context of the Covid-19 pandemic from the beginning of the year, supporting businesses to exploit the domestic market has become more important when exporting is difficult because international markets are slowing down due to the pandemic.
In the long term, Bui Ta Hoang Vu said that the implementation of FTAs is the process of gradually removing tariff and non-tariff barriers, bringing the expectation of market expansion for both import, export and domestic distribution. The liberalization process is both an opportunity and a challenge because businesses need to improve their competitiveness to be able to compete fairly with big competitors. In the context of extensive trade liberalization and the strong development of the sharing economy, there is no place for businesses that close their own processes. Linkage for development is a very important goal to increase the competitiveness of businesses, said Vu.
Source: VCN
Key words: value, regional links, FTAs
