Vietnamese Enterprises: How to effectively participate in the global value chain
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Transcript of Vietnamese Enterprises: How to effectively participate in the global value chain
Organization of Talk
What is a Global Value Chain?
VN Seafood Processing GVC
Seafood is a Buyer-Driven GVC
International Standards and Regulations
What VN Seafood Processors Can Do
VN Animal Feed GVC
Animal Feed Problems
INIVO Case Study
Lessons Learned for VN Animal Feed GVC
VN Handicrafts GVC
Handicrafts Problems
Greening the Handicrafts GVC
Conclusion
Every GVC Requires Different Strategies
Global Value Chain (GVC)
Network of interlinked stages of production for the manufacture of goods and services that straddles international borders.
Involves combining imported intermediate goods and domestic goods and services into products that are then exported for use as intermediates in the subsequent stage of production.
VN Seafood Processing: Three Levels
1. Sourcing and production of raw materials, including from the sea or aquaculture
2. Processing and export, including post-harvest sale, transportation, processing, freezing and exporting
3. Import and distribution: sale and delivery to grocery stores and restaurants
Seafood Processing is a Buyer-Driven GVC
Consumer demand has come to include traceability, safety and health
Led by supermarket chains, large retailers and foodservice operators
Established production requirements
ProcessingPackagingShipping
Regulations and International Standards
World Trade Organization (WTO) tariff and non-tariff regulations
UN Food and Agriculture Organizaton (FAO) standards
Global Aquaculture Stewardship Best Aquaculture Practices (BAP)
Aquaculture Stewardship Council (ASC)
Marine Stewardship Council (MSC)
What VN Seafood Processors Can Do
Create value added products
Develop joint ventures
Ensure transparency of market information and product quality
Create new products by organizing production, procurement, storage and processing
Meet requirements of the market and customers
Ensure the seafood chain link adheres to sustainable development
Streamline the fisheries value chain by increasing efficiency
VN Animal Feed GVC Problems
Vietnam does not have a domestic industrial-scale production
Animal feed producers choose what is more cost-effective
Animal feed price becomes higher with tax and fee
Livestock products cannot compete with imports
VN Pig Farms
80% of the total pig production comes from farms >50 sows
Average farm has ~20 sows
Large quantities of generic feed will not respond to Vietnamese farmers’ needs
INVIVO Case Study
Distribution NetworksDifferent feed products for different life stagesDedicated network of medium and small distributors Small quantities allowed for quick use avoiding need for specialized storageDistributors didn’t offer the same products to farmers in the same areaNurtured relationships with distributors and avoided direct competition
Technical AssistanceSales staff shared their technical and managerial expertiseTechnicians helped farmers improve their productivity and the quality of their
production through better use of feeds
Animal Feed - Lessons Learned
Economic efficiency
Foster partnerships between large farm input producers and networks of dedicated distributors
Tap into new markets while enabling smallholder producers
VN Handicrafts - Problems
Vietnam doesn’t have a firm brand in the global market
Poor competitiveness with low value products produced in large quantities
Around 90% were produced following ordered designs by retail giants
Small-scale production fails to ensure uniformity
Poor linkages between trade villages and exporters
Production chain lacks originality and creativity
Greening the VN Handicrafts Industry
Two-pronged approach for industrialization
Reduces the use of natural resources, waste and pollutionCreates high quality environmental goods and services in an effective and
industrial manner
Sectoral strategy unlocks additional development opportunities
Drives competitiveness
Increases resource productivity
Enhances environmental performance