Attracting investments in production and processing of Quang Tri agro-forestry and fishery exports

Monday - 11/04/2016 08:08
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Mr. Tran Duc Tam
Director of Quang Tri Department of Planning and Investment
Potentials and advantages
Quang Tri is located at the top of the Vietnamese side on the East - West Economic Corridor, therefore, has advantages in expanding economic exchanges with regional countries, especially the production and export of agro-forestry and fishery products. In addition, Quang Tri has rich and diverse natural conditions. Apart from the delta of river basins and coastal areas, the mountains and midlands of Quang Tri province created by basaltic soil are suitable for industrial crops such as rubber, pepper, coffee... Besides land and forest resources, Quang Tri has 75 km of coastline, over 8,400 km2 of territorial waters and large fishing grounds with varied seafood of high economic value. With a rich and abundant source of raw materials, Quang Tri province has great potential to develop production and processing of agro-forestry and fishery exports.
In addition to natural conditions, Quang Tri also has a big advantage for transport. Located at the North-South crossroads, Quang Tri is a transportation hub on the East - West Economic Corridor linking Central Vietnam to Laos, Thailand, Myanmar through two international border gates of Lao Bao and La Lay. With convenient transportation system including railway, waterway and road, Quang Tri has favorable conditions for goods export and trade as well as for attracting investors.
Current situation and causes
The production and processing of agro-forestry and fishery exports s in the province are still modest in recent years. Compared with other provinces in the North Central Vietnam, Quang Tri province has nearly the lowest ranking of the export turnover as can be seen in the following table.
Unit:  million USD
Province Year 2011 Year 2012 Year 2013 Year 2014
Thanh Hoa 492 730 921.0 1,000.0
Nghe An 350 536 613.9 520.0
Ha Tinh 85 1,990 742.5 1,105.0
Quang Binh 158 141 138.3 130.0
(Export value in the provinces – Source: Ministry of Planning and Investment)
According to the statistics in recent years (2010-2013), export products of Quang Tri province is mainly rubber, coffee and tapioca starch. There are slight fluctuations in the export volumes over the years, in which coffee products have fluctuated abnormally and had a sign of decline as shown in the following table:
Products Year 2010 Year 2011 Year 2012 Year 2013 Average growth rate
Rubber (ton) 1,678 3,120 2,200 1,891 104.1%
Coffee (ton) 2,708 1,650 2,740 2,586 98.5%
Tapioca starch (ton) 16,840 24,300 38,564 30,845 122.4%
(Export quantity – Source: 2013 Statistical Yearbook of Quang Tri)
In particular, there is no export of fishery products during the period of 2010 - 2014, though the province’s annual fishing yield and aquaculture are huge (i.e. fishery production: 27,159 tonnes in 2013; 29,550 tonnes in 2014, and expected to reach 32,100 tonnes in 2015). Overall, the province's export products are mainly in the form of primary processing and low added value; the major export market is China. The conflicts in the East Sea has recently made export activities to China limited, which leads to inactive output and unstable price.
There are many causes of this problem such as small-scale production, outdated production technology, uncontrolled product quality, limited trade promotion activities..., of which a crucial cause is the attraction of investment capital for production and processing of agro-forestry and fishery exports. Due to limited access to capital, the business establishments have no conditions for investment in upgrading equipment and technology in production, which leads to products with poor quality and high price. Another thing is that products for crude export are of low economic value and  competitiveness due to the absence of deep-processing plants of agro-forestry and fishery products in the province as well as inefficiency in calling for investment attraction and capital support. Therefore, it is crucial to attract investment in the production and processing of agro-forestry and fishery exports.
Improvement in investment environment and efficiency enhancement of investment attraction
In recent years, Quang Tri Province has been actively enhancing investment promotion and business support to overcome difficulties, provide access to bank credit funds... in order to improve the investment environment and efficiency of investment attraction. The following activities of investment promotion have been implemented:
- To coordinate with the Investment Promotion Center for Central Vietnam to build information database for investment promotion in Central Vietnam.
- To develope a list of projects calling for domestic and foreign direct investment in the province in accordance with the local master plan for socio-economic development.
- To develop publications and documents for the purpose of investment promotion activities; To organize and participate in the conferences and workshops on investment promotion.
- To support organizations, businesses and investors to understand the regulations, policies and procedures for investment; potentials, markets, partners and opportunities for investment; project implemetation after the issuance of investment certificates.
- To implement domestic and international cooperation activities in investment promotion such as investment promotion conference in the provinces of North Central region held in Nghe An; conference on attraction Japanese investors into the East-West Economic Corridor held in Da Nang; "Commerce - Investment Promotion Forum in the central region of Vietnam" held in Thailand...
Through investment attraction activities, Quang Tri Province has promoted its images, potentials, advantages and priorities for attracting investment to domestic and international friends; promotion activities have been proactive and professional in approach and preparation for contents and diverse forms of investment promotion. The results of investment promotion activities include the following:
There are seven foreign direct investment (FDI) projects attracted in the production and processing of agro-forestry and fishery products with total registered capital of $26,100 million, among which 4 projects have completed and put into operation including: CP livestock JSC’s area for sandy industrial shrimp farming in Hai An and Hai Ba communes; shrimp production of Uni – President Co. Ltd.; Hong Duc Vuong Factory for fishmeal production and processing by Hong Duc Vuong Co. Ltd.; Factory for woodchip production and forest product processing by Shaiyoo AA Co., Ltd., Thailand. Investment sectors of FDI projects consist mainly of industrial shrimp farming, of woodchip and fishmeal processing, banana processing and preservation, macadamia planting. In general, the products of these projects are largely consumed in the local and domestic markets, and have yet to export to foreign markets.
For domestic investment projects: The number of investment projects and capital in the production and processing of agro-forestry and fishery products has been still modest, specifically: there are 2 investment projects with registered capital of VND36 billion in 2010; 3 projects with registered capital of VND2,446 billion in 2011; 5 projects with total registered capital of VND138 billion in 2012; 3 project with registered capital of VND48 billion in 2013; 5 projects with registered capital of VND351 billion in 2014. Investment contents are mainly rubber planting and processing; production and processing of forest products, processing of coffee beans, tapioca starch fishmeal and dried shrimp paste.
Apart from these achievements, there still exist some limitations as follows:
- Investment Promotion Conferences have yet to organize in some large countries.
- Activities of investment promotion and calling for domestic and foreign investment are fragmented, dispersed and lack of uniformity and strategy.
- Forms of investment promotion have been carried out on a less extensive and small scale as well as in an unprofessional and passive way.
- The quality and efficiency of investment projects are not high. The investment projects for production and processing of agro-forestry-fishery products mostly have a level of low and small-scale investment capital, lack of motivation projects, no deep-processing projects with modern technology.
- Some projects were granted investment certificates, but have yet to implement projects or stop construction work performance due to shortage of investment capital or difficulties in business activities.
The causes of the above-mentioned problems and limitations include:
- At present Quang Tri province has yet to establish any Investment Promotion Center. Quang Tri Provincial People’s Committee has assigned the tasks of investment promotion to Department of Planning and Investment for implementation. Besides, there is also an in-charge division of investment promotion activities at the provincial Economic Zone Management Board; and Quang Tri Center of Industry and Trade Promotion at the Department of Industry and Trade. The investment promotion staff are lack in quantity, most of which are part-time with low professionalism and limited experience and skills in investment promotion, therefore, failing to meet practical requirements. The main reason is lack of a specialized and qualified division with legal status to coordinate with other departments, offices and localities in order to address issues related to investors and investment activities. That different units undertake investment promotion activities at the same time leads to the dispersal of resources, lack of uniformity and timely coordination amongst relevant parties, as a result, performance quality and efficiency are of little limit.
- Regarding investment environment: the infrastructure of industrial zones, economic zones, and industrial clusters have not really guaranteed investment attraction together with activities of investment projects. The province’s supporting and preferential policies for investment are not really attracting to investors. Moreover, the province’s annual funding for investment incentives are not aquedate enough for project allocation. The list of projects calling for investment is namely in the form of ideas. The proposing units do not carry out in-depth feasibility study to provide more specific and detailed information for investors. The local governments and units with projects calling for investment are not ready to meet all requests, questions, information for partners and investors. The labor market is still limited, the majority of workers have not met the needs of enterprises, especially the shortage of qualified, professional and skilled labor resources along with high quality workforce...
Orientation in the coming period:
With a view to accelerating the local socio-economic development, in the context of Vietnam’s entry to the threshold of the medium income countries, the mobilization of official development assistance (ODA) has faced difficulties, the call for domestic and foreign direct investment to Quang Tri province plays a very important role. In the future, to promote the production and processing of agro-forestry and fishery exports, Quang Tri province should perform investment promotion activities in the following directions:
To complete the infrastructure in the economic zones, industrial parks and clusters to create favorable conditions for the investment projects of production and business. To construct seaports and improve road and railway systems for enterprises to transport and export goods in a favorable way.
To conduct review and supplementation of the supporting and preferential policies for investment in the province under the provisions of the current regulations and the actual conditions of the locality, and creating attractiveness for investors; To make administrative reforms to improve the business environment and provincial competitiveness.
To build up the provincial orientation for investment attraction over the period from 2016 till 2020, based on which to build the profiles of key projects calling for investment, especially projects for deep-processing and refined processing of agro-forestry and fishery exports.
To develop policies to attract talented people; budget allocation for vocational training of unskilled workers; content integration of vocational training for laborers in the programs and projects, especially new rural programs; efficiency enhancement of the employment exchanges to connect laborers with investors in need of recruitment.
To continue to implement the contents of investment promotion, focusing on the forms of organizing Investment Promotion workshops and conferences domestically and in some potential countries such as Japan, Korea, Thailand, Singapore; channel innovation for promoting and introducing the investment environment of the province, for example, upgrading the local website; releasing leaflets and catalogues, publishing journals and promoting publications on different topics.
With its available advantages, the production and processing of agro-forestry and fishery exports are opening up a new potential market for Quang Tri province. However, in order to develop such potentials, it is necessary to have strategies to attract investment and develop a list of specific investment projects, especially those that the province has the advantage of raw materials. The policies for proper investment attraction and effective investment promotion will attract investors’ capital in the production and processing of agro-forestry and fishery exports. Along with the policies for support of new market search and investment in science and technology, the production and processing industries of Quang Tri agro-forestry and fishery exports will increasingly develop and bring high economic impacts and contribute to economic development of the province in the future.

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