Dozens of small- and medium-sized Thai groups are looking for partners to spread their operations in terms of agriculture and food in Vietnam.

Kannigar Danpiboon, managing director of processed and freeze-dried food manufacturer Thongpoon Food Co., Ltd, was present at the Thailand-Vietnam Business Networking event on July 13 in Hanoi, which was organised by the Thailand Board of Investment and investment consultancy IPA Vietnam.

“After carefully studying the Vietnamese market, I see that it has potential. Vietnam has abundant fresh fruit resources. However, agricultural production is mostly maintained at a small scale within households, using manual farming methods and limited mechanisation and processing. Thus, most exported products are still raw, bringing low value and profit,” Danpiboon said.

According to Danpiboon, Vietnam has many key products with a competitive advantage compared to that of Thailand. Many fresh fruits from Vietnam, such as lychee and dragon fruit, are being distributed in Thai large retail chains.

“In addition, Thai businesses prefer importing agricultural raw materials for processing, creating an excellent opportunity for Vietnamese businesses to export their agricultural products,” she added.

The representatives of Thai companies such as Hsu Chuan Foods, Boonpornsubrawee, and Shunhenglirungrangshah also said that they will work closely with the Thai investment board and IPA Vietnam to look for suitable locations and partners.

Amnat Chulajata, director of Thailand Board of Investment Vietnam, said, “In bilateral trading relationships in particular, Thailand is currently the largest trading partner of Vietnam in ASEAN, which is a favourable condition to promote two-way trading collaboration. Thus, we are increasing to support Thai investors and manufacturers to look for investment and trading opportunities in Vietnam. I see that many large Thai groups are present in Vietnam, but almost all of them locate in the south region, thus at this networking, I would like to connect Thai firms with local partners in the north.”

Bilateral trading turnover has seen consecutive growth since the two countries became members of the ASEAN Economic Community in 2015. Especially, participating in the Regional Comprehensive Economic Partnership has helped to remove tariff barriers, opening up numerous opportunities for import and export. Moreover, Vietnam and Thailand can cooperate in building supply and production chains as well as promoting exports to a third country.

Statistics published by the General Department of Vietnam Customs showed that in the first five months of this year, the bilateral import-export turnover was $7.85 billion, with $3.11 billion worth of Vietnam’s exports. The two countries expect that the figure will increase to $25 billion for the whole year.

“Thai food and agri-groups have a favourable foundation to expand the distribution channels and manufacturing facilities in Vietnam because at present, many retailers are setting their solid foot in the Vietnamese market, which are the backbone for fostering the export of Thai goods to Vietnam. In addition, Thai authorities are also encouraging these retailers to invest in this Southeast Asian country,” Chulajata said.

The Department of International Trade Promotion (DITP), a division of the Thai Ministry of Commerce, has urged Thai entrepreneurs to carefully examine the potential of harnessing Vietnam’s thriving retail market, which is poised to reach a staggering $350 billion by 2025.

In addition to this, the DITP has encouraged Thai enterprises to prioritise commercial enhancements, engage in environmentally friendly production practices, and demonstrate a keen focus on circular and green economies – all of which are instrumental in stimulating growth within Vietnam’s retail landscape.

Central Retail Corporation, the largest retailer in Thailand, in February announced its biggest investment in Vietnam at ฿50 billion ($1.45 billion) for the 2023-2027 period to accelerate its market presence in the country, which could help create distribution advantages for smaller Thai companies in Vietnam.

The corporation invested more than ฿10 billion ($288.6 million) to expand its retail business in Vietnam over the past decade. It has more than 340 stores across 40 cities and provinces.

Vietnam Investment Review