The reduction of tariffs on goods among ASEAN members would enable Vietnamese firms to boost exports as well as participate in the global production chain. — VNA/VNS Photo Tran Viet

HCM CITY (Biz Hub) — Many Vietnamese firms have prepared well to grab the opportunities that will arise from the establishment of the ASEAN Economic Community at the end of this year as well as to cope with challenges, experts have said.

Nguyen Trong Hoa, director of the HCM City Institute for Development Studies, said the AEC would usher in free movement of goods, services, and skilled labour and a freer flow of capital.

The reduction of tariffs on goods among ASEAN members would enable Vietnamese firms to boost exports as well as participate in the global production chain, he said.

But on the other hand, they would face fiercer competition in both the domestic and export markets, he warned.

Van Duc Muoi, chairman of the Food and Foodstuff Association of HCM City and general director of Vissan Company Limited, said his company has made efforts to restructure its organisation, improve its services and develop new products to improve competitiveness.

The livestock industry will be the most vulnerable sector in case of deeper integration. To remain competitive, businesses in the sector need to develop close linkages among themselves at all stages from production to distribution.

"Vietnamese consumers prefer fresh meat products to frozen products, and that is an advantage for local producers," he told Viet Nam News.

"However, we must think of offering competitive prices as well."

Vissan would tie up with other businesses in the Cuu Long (Mekong) River Delta and south-eastern regions to set up farming areas that would make for clear product origins and ensure products meet hygiene and food safety standards, he said.

Nguyen Dang Hien, general director of Tan Quang Minh Manufacture and Trading Co, Ltd – which makes beverages under the Bidrico brand – said the company has invested in technology for uniform quality and optimising costs.

Competition in the domestic market is quite tough already and when the market is thrown open, consumer goods manufacturers would encounter fierce competition, he said.

"Only if we make products that are equal to foreign ones and at competitive prices can we compete with imported products in the Vietnamese market."

He hoped administrative procedures would be streamlined quickly and bank lending rates further cut to help companies cut costs.

Home ground

Nguyen Anh Duc, deputy general director of Saigon Co.op, which operates supermarket chain Coop.Mart, said the establishment of the AEC would offer consumers a greater choice of products.

"Most Vietnamese retailers have made preparations in terms of resources and strategies … to strengthen their competitiveness in the domestic market and are ready for the challenges and opportunities from the AEC," he said.

The "home ground" factor would be the main advantage for local retailers, he said. To retain that advantage, they should focus on improving their infrastructure and the professionalism of their staff and implementing customer care programmes carefully.

They should also co-operate with producers, including farmers, to improve product quality and develop distribution networks to reduce costs.

Local players should join hands to develop a strong retail network and expand it to promising rural areas, he said.

With its diversified retail model, Saigon Co.op would continue to widen its distribution network, professionalise its logistics and supply chain and undertake other activities to create a competitive advantage, he said.

Huynh Van Hanh, deputy chairman of the Handicraft and Wood Industry Association of HCM City, said local companies had improved their technology and along with it their productivity and quality.

Wooden products made in Viet Nam were not inferior to their ASEAN counterparts, he said. "We know their product quality and prices and so are not afraid of competition with products from ASEAN countries in the domestic market."

Hanh said the Government should spell out standards for imported wooden products, including the permissible content of formaldehyde in glue and lead in oil and resin varnishes to protect consumers' health.

He urged domestic wood businesses to focus on developing the distribution system to boost consumption of their products. Besides expanding exports to traditional markets like the US, EU, and Japan, they should also focus on neighbouring markets in ASEAN, he said.

Tran Van Thanh, director of Kien Phuc Wood Export Private Enterprise, said improving product design was very important.

Hoa admitted, however, that several firms, especially small and medium-sized ones, remain unaware of the AEC, and they could easily remain passive and fail to fully prepare to cope with the challenges or grasp the opportunities. — VNS