Feed Bites

Part Two: Vietnam - a Possible Antidote to Increasing Global Uncertainty

Written by: Guest   |   August 31, 2020

Vietnam, Trade, Guest perspective, Member value

Kevin Latner
Senior consultant, Ag Food Consulting

In a time of ever-changing global markets, competition and general uncertainty, keeping abreast of and open to new opportunities for U.S. animal food products can provide an alternative means for survival. In my last blog, I discussed how Vietnam is one of the fastest growing economies in Asia and boasts very real, untapped potential. It warrants further investigation by the American Feed Industry Association as well as U.S. businesses interested in expanding.

The hope is that Ag Food Consulting’s recommendations from its recent market assessment of the Asian country will provide the foundation for the AFIA to begin active market development and access efforts for the benefit of the U.S. animal food industry as a whole.

Things to Consider

While Vietnam is a place where business and consumer sectors love the American market and hold positive attitudes toward trade, there are increasing regulations that impact animal feed and pet food and a business culture that is built on long-term relationships. Accessing these kinds of emerging markets requires patience, due diligence, qualifying your buyers and protecting your sales and intellectual property interests. 

The first step is always to qualify your own business and business interests. For example, do you have the time and logistics capabilities to invest in international market development? If you have not already exported abroad, maybe you need to consider an export market closer to home, such as Canada or Mexico, or an export market that is more familiar with doing business with U.S. firms, such as Japan or Taiwan. If you are already in these markets, have other export sales experience or a unique product that is optimized for the Vietnamese market, it is time for you to: prepare, identify trade partners and execute. 

Critical to developing partnerships in Vietnam is verifying the bona fides of prospective partners. Firms in Vietnam are not generally audited to international standards. Private firms may prefer not to disclose assets and liabilities and state-owned enterprises may be considered sensitive by the authorities. Due diligence alternatives include working with multinational or joint venture enterprises or spending the time to establish trust relationships with medium-sized, in-country partners. Even after establishing trust relationships, it is critical that you verify and protect your financial and intellectual property interests.

Selling premium animal feed and pet food in Vietnam requires registration of your product with the relevant government officials. Importers must be able to facilitate the product through the customs clearance process and a distributor must have the capacity to distribute and provide sales support for your product.

Although not required for raw commodities and listed ingredients (see unofficial translation of Circular No. 21), product registration is required for compound feeds and premixes. The registration normally takes anywhere from six to 12 months. The timeline will depend on the skills of the agent. The registration must be completed by a Vietnamese organization and may be done by your importer, distributor or a government affairs specialist. 

In selling feed into the Vietnamese market, whether you decide to develop a relationship with a large feed mill, animal production partner or a medium-sized distributor, your best avenue to success is to identify a partner with access to customers and the capacity to understand your product, sell to an established client base and provide aftermarket services.

As companies are considering Vietnam as a new market destination, learning about any challenges or obstacles is key. If you are currently exporting to Vietnam or wish to, but have come across barriers or unnecessary challenges, consider reaching out to your contacts at the AFIA for guidance and expertise.

*Ag Food Consulting is a network of government affairs, trade facilitation and trade marketing experts with decades of experience in U.S. agricultural market research, export promotion and trade policy. AFC can be contacted at info@afcservice.net.

The AFIA is an equal opportunity provider and employer.

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