Thai wholesaler MM Mega Market recently announced that it has begun to export Vietnamese agriculture products. Viet Nam News speaks with Phidsanu Pongwatana, the company’s managing director, to find out what products are exported and how competitive they are.
Mr. Phidsanu Pongwatana, Managing Director, MM Mega Market Viet Nam
MM Mega market has already exported Vietnamese products to foreign markets. Can you tell us about your exports in recent times?
As soon as we got the export licence, we moved quickly to understand the needs of our business partners in Thailand and look for domestic goods with a competitive edge that we can supply. This does not only offer a richly diversified and competitive source of supply to the Big C system in Thailand, but can also help Vietnamese farmers take their quality agricultural products to other countries in the region.
In the first quarter of 2018 MM Mega Market Vietnam (MM) successfully exported a first batch of more than 100 tonnes of Vietnamese agriproducts comprising yellow sweet potato, purple sweet potato, dragon fruit and others for sale at 700 Big C malls in Thailand. This is the outcome of joint efforts by MM and farmers in Lam Dong, Binh Thuan and elsewhere to source products that meet the quality requirements of business partners.
While dragon fruit was the mainstay, this 100-tonne consignment also contained more than 45 tonnes of sweet potato.
How is the demand for and consumers’ reaction to Vietnamese products? Are they competitive in these markets?
According to the estimates of the purchasing division in Thailand, Vietnamese agricultural products have unique advantages, especially sweet potato, such as reliable output and qualification for safety standards in production, and high quality. These products are therefore likely to see large orders going forward.
Some Vietnamese agricultural products have a real competitive edge and great potential in these markets. With their good quality, reliability, professional packaging, diversity, and competitive prices, some fruits and vegetables from Viet Nam have become real favourites among consumers in Thailand.
Besides Thailand, we also plan to export Vietnamese fruits to China, where we also have an active business.
Our market surveys indicate that 80 per cent of dragon fruit sold in China now comes from Viet Nam. In Thailand, consumers have a preference for Vietnamese dragon fruit and sweet potato, given their clearly better quality than similar Thai products. It’s been over two years since we started selling these products in the Big C system in Thailand, and Vietnamese dragon fruit and sweet potato have now become really popular with local consumers.
Many markets around the world are erecting barriers to protect domestic agriculture. Vietnamese agriculture shipments could be affected and the export target of US$40 billion this year is challenging. What should the Government do to overcome barriers to achieve the target?
Data from the Ministry of Agriculture and Rural Development shows that Vietnamese agricultural products have made their way to more than 180 countries and territories around the world. Agricultural exports last year were worth US$33.14 billion, a 13.8 per cent rise from 2016. I can see that Vietnamese fruits and vegetables are making impressive moves by successfully entering such demanding markets as the US, Australia and Europe.
While many countries are raising barriers with increasingly strict rules to protect their markets, I particularly value the policies and actions of the Vietnamese Government to widen export markets for agricultural products in recent years, like improvements to policies on investment in sourcing areas and manufacturing facilities and encouraging business links in the value chain, and its active exploration of new markets.
To increase agricultural exports from Viet Nam and achieve the $40 billion target, I think the Government needs to further market Vietnamese products in other countries and expand the information system on export markets to help businesses clearly understand the rules related to quality and food safety in other markets. Besides, every market may have different demands for products, and market surveys are very important, too. For example, a consumer in the US prefers bigger dragon fruits (about 0.5 kg apiece), whereas European markets prefer smaller ones (about 0.3 kg).
Moreover, the Government may also want to strengthen master planning for production areas to meet export needs in a reliable manner, and introduce incentives for the development and application of high technologies and advanced techniques in all stages from farming to storage to meet the requirements of picky markets.
One of the weaknesses of Vietnamese agriculture is developing trademarks. What should Viet Nam do to address this weakness? What has your company done to help Vietnamese farmers develop trademarks?
While many Vietnamese agriculture products are well-known in other countries, they have no brand names of their own or have to be sold in international markets under foreign trademarks. This compromises the competitiveness of Vietnamese agricultural products in the context of increasing economic integration, where clear product traceability and origin is required.
To effectively develop a brand name for Vietnamese agricultural products, I think local regulators should give brand-building priority to local speciality products such as agricultural products from Ben Tre, Tien Giang and other places while also strengthening links between regulators, businesses and farmers, and engage them closely in brand building.
At MM Mega Market Vietnam, we are actively building MM’s own brand name, and each of our finished products will carry the MM Mega Market "Made in Viet Nam” logo.
Some farmers are short-sighted and just sell products to the highest bidder or those making the fewest demands. How would you solve this problem?
Sometimes we have to stop working with certain farmers since they are not complying with our standards. They just go to the highest bidders. Some farmers are more aware in this regard. Farmers we work with have steady sales and incomes and more stable profits. You need to work very closely with farmers and provide instructions. Also, whatever you promise to buy, you must buy it even if the price sometimes higher than market price. You have to keep your promises. You have to ensure that the farmers you work with make a profit in the end.
We want to develop sustainable partnerships with local farmers on a ‘win-win’ basis, and many farmers have actually had more than a decade doing business with us. We believe that only when the farmers thrive can MM prosper. You can call that an interdependent relationship.
Are there any policies supporting agriculture exports you would like to see in the future?
The Vietnamese Government is very supportive of exports and imports already. But I think firms and Government have to do more marketing to promote Vietnamese goods. China for example has some food fairs. Vietnamese should organise more fairs in other countries to showcase the quality of their products, and not just foods. Viet Nam has a lot of good products. Vietnam can do more to promote its products in foreign markets.
And can you tell us about your strategy to export Vietnamese farm products?
MM Mega Market Vietnam’s export strategy is built on solid groundwork thanks to a professional platform system and direct interaction with farmers to create a quality and diverse source of supply. The company is running three platforms – the Da Lat-based Fruit and vegetable platform, fish platform in Cần Thơ, and pork platform in Dong Nai — and soon there will be a Fruit platform in Ben Tre.
With airtight sourcing and quality testing procedures in place, MM not only works with farmers on production standards, specifications and quality, but also has control over hygiene, packaging, transportation and so on to offer consumers products of the highest quality possible and build a reputation for Vietnamese agricultural products. Besides exports, we also act as an interface for technical assistance and market research for local exporters to reach the Thai market.