Making Inroads into African Market

Recently the Thanh Hoa Branch of Vietnam Chamber of Commerce and Industry (VCCI) in coordination with the Department of African, West Asian and South Asian Markets, Ministry of Industry and Trade and Thanh Hoa’s Department of Foreign Affairs, organised a workshop to introduce African markets. The workshop provides essential information on guiding export activities to this potential promised land.

In fact, though assessed as a potential and good growing market for Vietnam, African market still poses potential risk such as unstable political situation, ethnic conflicts, religious conflicts, many administrative barriers and risks in payment and so on. Therefore, Vietnamese businesses in general and Thanh Hoa’s in particular are not really very interested in this market.

Speaking at the seminar, Mr Do Huu Huy, Deputy Director of the Department of African, West Asian and South Asian Market, Ministry of Industry and Trade, said Vietnam had export-import relations with all 55 countries in Africa, founded 9 embassies and 5 trade offices in Africa. Africa has a huge demand for imported goods of Vietnam, especially commodities such as rice and other food staples. In recent years, two-way exchange between Vietnam and African countries has been increasing. According to trade statistics, Vietnam's exports to African countries in the first six months of this year rose 41.7 percent. This is the highest growth rate compared to other markets, such as the Asian market increased by 19.9 percent, European market 15.8 percent, American market 7.2 percent, of which exports to the US increased by 13 percent. Especially in May 2013, Vietnam's rice exports to some African markets sharply increased in volume over the same period last year such as exports to Angola reached 83,600 tonnes, an increase of 186 percent, Cameroon 68,800 tonnes , an increase of 122 percent, Mozambique 34,400 tonnes, an increase of 31.4 percent; Togo 15,300 tonnes, an increase of nearly 7 times.

Besides, the structure of import and export commodities of Vietnam is very diverse, in accordance with the import demand of countries in Africa. The main export items of Vietnam include rice, gems and precious metals, textiles, footwear, machinery, computers and parts, agricultural machinery, engineering products, plastics, wood products, motor bikes and components, milk and milk products, processed food, etc. Vietnam imports from African countries products such as wood, raw cashew nuts, cotton, iron and steel scrap. The key markets of Vietnam in this area include South Africa, Senegal, Egypt, Ivory Coast, Angola, Nigeria, Ghana, Guinea, Tanzania and Cameroon.

On investment, by the end of 2012, Vietnam has 18 projects in 10 African countries, a total investment of US$730 million; Viettel Group invests in Mozambique and Cameroon in the telecommunications sector. Vietnam Petro Group invests more than US$300 million in exploration and exploitation of oil and gas in Algeria, Tunisia, Cameroon and Congo. 7 African countries to invest in Vietnam are Seychelles, Morocco, Nigeria, Mauritius, Egypt, Kenya and Sierra Leon in areas such as industrial processing, manufacturing, wholesale, retail, repair, field of science and technology activities, accommodation and consulting services.

About the business opportunities for Thanh Hoa businesses in particular and Vietnamese businesses in general  when entering this market, participants said that Vietnam had traditional friendship and cooperation relations  with Africa and the Vietnamese government has a policy to promote cooperation relations with Africa. In addition, Vietnam has a team of experts and workers working in many African countries in various fields, currently there are about 8,500 Vietnamese experts in Libya, Algeria and Angola and 300 health, education and agricultural experts working in Angola, Mozambique and Algeria. However, a number of difficulties that businesses face are: Some of the products have to meet the host country’s standards; labels, marking labels, product information must be written in English, French or language of the host country; export shipping documents must be legalised by diplomatic representatives of the host country.

According to Nguyen Thanh Tieu from VCCI Thanh Hoa said that Thanh Hoa has great potential in building materials, textiles, seafood, footwear and handicrafts products, however, it is difficult to access foreign markets. This conference has provided many businesses with practical information, and it is fundamental to businesses of Thanh Hoa to take appropriate steps and specific direction in relation with the potential and challenging market.

To search for business opportunities, strengthen cooperation between enterprises of the two sides, the delegates said that businesses should actively participate in the market survey groups and trade promotion groups organised by the Ministry of Industry and Trade, Vietnam Chamber of Commerce and Industry, the provincial Department of Trade and Industry and Trade; contact the Vietnam Trade Office in the African region, the Middle East and attend international exhibitions and business forums.

Also, to prevent risks in dealing with African partners, businesses also need to know the import and export regulations, contact the Ministry of Industry and Trade and the Vietnam Trade Office in Africa to clarify partners if they see abnormal signs; study business practices in Africa, the Middle East, especially Islamic culture.

Also at the conference, VCCI Thanh Hoa and Thanh Hoa Department of Foreign Affairs signed a memorandum of cooperation. With this signing, the two agencies expect Thanh Hoa will help businesses get more opportunities in the access to and learn about foreign markets, as well as to export to the potential markets such as Africa in particular and the rest of the world market in general.

Thu Ha