09:04 | 20/10/2018 Cooperation
(VEN) - The United Arab Emirates (UAE) and Kuwait are becoming attractive destinations for Vietnamese businesses given the demand by their well-to-do residents for agricultural products, seafood, oil and other commodities.
The UAE and Kuwait, two of the six Gulf Cooperation Council (GCC) nations, hold great potential for trade and investment cooperation with Vietnam. The UAE is Vietnam’s largest trading partner in West Asia and Vietnam’s 17th largest export market, buying major Vietnamese exports such as farm products, tropical vegetables and fruits, and seafood.
Vietnamese Ambassador to the UAE Trinh Vinh Quang said Vietnam is now a gateway for UAE firms to access the ASEAN market, while the UAE is a gateway for Vietnam to expand to the Middle East.
The UAE is the top global re-exporter of rice thanks to its favorable geographical location, developed infrastructure and open trade rules, annually importing about one million tonnes of rice of all kinds.
Vietnam’s traditional agricultural products such as pepper and coffee have gradually confirmed their position in the UAE market, and have been re-exported to neighboring markets in the Middle East and North Africa. Other potential areas of cooperation include renewable energy, metallurgy (aluminum and steel), vessel repair, petrochemicals, chemicals and engineering.
Trade turnover between Kuwait and Vietnam reached US$350 million in 2017 and US$1.43 billion in the first eight months of this year. Vietnam’s exports stood at US$54 million, while imports totaled US$1.37 billion.
Kuwaiti Deputy Consul General in Ho Chi Minh City Jasem Abomarzouq said trade ties are developing strongly. “Kuwait is now more interested in the Vietnamese market. I am looking forward to seeing more Kuwaiti investors in Vietnam, as well as seeing more Vietnamese products in Kuwait,” Abomarzouq said.
Focusing on high-quality goods
Ho Chi Minh City Investment and Trade Promotion Center Director Pham Thiet Hoa said the UAE is one of the best paying countries, and is the largest transshipment hub in the region. With major purchasing power and diversified demand for imported goods, the UAE’s import turnover in 2017 reached about US$265 billion.
Price is not an issue given the high income of UAE and Kuwait residents, but quality is. Therefore, exports of high-quality products to these two markets ensure larger profits than those to other markets, constituting a great incentive for Vietnamese businesses.
Nguyen Huu Phuc from the Como Co., Ltd said the Middle East countries often prefer certain products due to their cultural characteristics. For example, high-class silk products are preferred to mass-produced goods.
Vietnam’s exports to the region have great advantages thanks to diversified logistics services. Nguyen Tien Giap from the Ben Nghe Port Company Limited said export-import activities between the two sides are very favorable as all major shipping lines in Vietnam now have routes to Dubai and Kuwait and goods transported by sea from Ho Chi Minh City to Dubai take only 16-20 days. Air service is also frequent. Freight rates on both sides are quite good thanks to the participation of many transport units.
Nguyen Tien Giap said that despite great potential, Vietnam’s current export volume to these two markets is modest due to cultural differences. To promote exports further, Vietnamese businesses should pay attention to cultural characteristics, especially ensuring their products meet Muslim-specific requirements.
Businesses must pay special attention to Halal certification, as it is the most simple and trustworthy way to prove that the origin of materials is suitable to Muslim consumers, Giap said.
Nguyen Van Bi from the Nong Lam Food Co., Ltd said the company’s products are produced under the research and development of the Ho Chi Minh City University of Agriculture and Forestry, so quality is guaranteed. The company is making greater efforts to receive Halal certification for processed agricultural products in order to gain access to these markets.
The Muslim market has great purchasing power and high demand for Vietnamese products and few technical barriers and tariffs. Halal products and services meeting required standards are expected to generate revenues of about US$3.6 trillion in 2021, providing a great opportunity for Vietnamese businesses if they know how to access the market.