The agro-forestry and fishery sector has been one of Viet Nam's key export products. — VNA/VNS Photo An Hieu

HA NOI (Biz Hub) — Vietnamese exporters should restructure their production to improve profit and enjoy preferential of the Trans-Pacific Partnership Agreement (TPP), Tran Tuan Anh, deputy minister of Industry and Trade said.

Anh said agro-forestry and fishery sector has strengthened and has been one of Viet Nam's key export products.

However, the products would lose their strengths in the middle- and long-term if businesses do not restructure production, thus bringing in higher added value, he said.

"This was the reason that Viet Nam has issued the export strategy by 2020 with a vision to 2025 to take advantage of international integration," he added.

The wood sector has been considered one of the key export staples with an average turnover of US$6 billion.

However, domestic wood exporters have focussed on products of sawdust, wood plank, ply wood, and fibreboard, in addition to furniture. Apart from furniture, the remaining products have been exported to South Korea, Malaysia, Taiwan and Japan as input materials for production of paper, medium fibreboard and interior furniture. These input materials will not be given tax reduction in the TPP.

Nguyen Tuan Viet, general director of Vietgo, one of the companies specialising in import-export consultancy, said the various sectors in the country would have to change their structure as foreign firms with big capital and modern technologies would pour their investment into Viet Nam to enjoy tax preferential under the TPP.

"There will be a wave of businesses from China and Sweden, the leading wood exporters in the world, to invest in furniture production in Viet Nam," Viet said.

Nguyen Ton Quyen, chairman of the Timber and Forest Product Association of Viet Nam (VIFORES) said several wood producers have to strive to change their technology to produce products with higher quality and added value.

"This is one of the critical solutions needed to take advantage of integration," Quyen said.

In addition, several agricultural products such as coffee, dragon fruit and lychee would be hard to ship in big amounts to the big markets of the US and Japan which have strict food requirements. Viet Nam would benefit most from the countries as the TPP comes into effect.

Being one of the key export products, the garment and textile sector has witnessed difficulties as most of the producers have been small- and medium-sized enterprises. With strict regulations on the certificate of origin, garment and textile firms would not enjoy a tax preferential if they still rely on imported materials.

Vietgo's CEO said they received five contracts from China in December to seek cotton and down and feather for jacket production.

"This has been a vital trend as the TPP will take effect soon. If local businesses do not change, they will become employees in their own country," he said.

He recommended that Vietnamese firms should invest in design, and material production to manufacture high quality products that penetrate demanding markets such as the US, Canada and Japan. — VNS