Necessary mechanisms to facilitate local retail market - Website Ho Chi Minh City
On August 14, Chairman of HCMC People’s Committee Nguyen Thanh Phong had a working session with Food and Foodstuff Association of HCMC (FFA). At the meeting, many businesses proposed solutions to remove difficulties for food sector, to boost purchasing power and to develop local retail market.
Supporting businesses to renovate and boost R&D
At the meeting, President of FFA Ly Kim Chi said: “In first months of 2018, imports of food enterprises are very tough due to heavy dependence on Chinese traders. However, food enterprises in the city are very active in supplying their products at traditional distribution channels, carrying out price stabilization programs to create peace of mind to customers. At the same time, these businesses have invested in modern technology to develop new products and to grasp new market trend.”
In order to promote the development of the city’s food sector, Mrs. Ly Kim Chi suggested the city should give more support policies to boost purchasing power and enhance competitiveness of goods, saying no to VAT tax increase on food and foodstuff products, as well as special consumption tax on soft drinks.
At the same time, it also needs to work out policies to develop local retail market through support solutions to local famous brands such as Saigon Coop, Satra Mart, Vinmart, etc. expanding size of current stores and increase new outlets, etc. renewing traditional markets to help local retailers to compete with foreign ones. Besides, the city should put in place suitable mechanisms for local retailers to support food enterprises to easily access to distribution networks.
The city needs to guide credit organizations to work out support solutions such as simple lending procedures, safe loans, reduction of time of getting loans; creating favourable conditions for businesses to access to credit capitals, especially for small and medium-sized enterprises. Moreover, it is necessary to consolidate operation of credit guarantee funds for SMEs and to support them to access capital sources to develop their business and production activities.
In addition, the city should support and develop logistics sector to maximum reduce costs for enterprises. Currently, transport cost by road in food sector is still very high making it difficult for enterprises. At the same time, it is urgently to establish specialized industrial parks for food processing sector with an area of 200 hectares.
At the meeting, enterprises suggest to further strengthen administrative procedure reform; making publicly State’s preferential policies. Specifically, CEO of VISSAN Nguyen Ngoc An suggests Taxation Department of HCMC needs to explain complaints related to tax policies to enterprises in a quicker and clearer manner.
While CEO of Saigon Food JSC Nguyen Quang Tuong noted: it is now very difficult for enterprises to access to preferential loans. Therefore, it is necessary for the city to strengthen propaganda programs on the State’s preferential policies and of the city to SEMS in fields of agriculture and food processing sector. In addition, it is important to have support policies for enterprises under FFA to promote creativity activities and R&D.
Expanding market share and enhance competitiveness
In his closing speech, Chairman Nguyen Thanh Phong said: business linkage remains as the biggest challenge for enterprises. Then, FFA needs to listen to enterprises’ opinions and submit to higher authorities for consideration.
In response to retail system, Mr. Phong added: 4 limitations maintained in the local retail system include lack of development and business strategy; low professionalism; limited financial strength; poor after sale services. Therefore, it requires to frequently organize meetings and dialogues between retailers and food enterprises to expand market share and enhance competitiveness. Production must be in line with distribution.
Regarding to capital, Mr. Phong said the city will promote the linkage between banks and FFA to provide credit packages, to consolidate operation of credit guarantee funds for SMEs to access capital to develop their business and production activities.
Mentioning about stimulus program of the city, Mr. Phong said: it is a regulation that only enterprises that are operating in the city are objects of this program, for those with headquarters in HCMC or even paying tax to the city but expanding their branches somewhere, the city will readjust the support policies for these enterprises.
Regarding to the establishment of specialized industrial parks for food processing sector, Mr. Phong requested FFA to set up a project for the city’s consideration. He added that the city will discuss with HCMC Bar Association, HCMC Business Association to establish legal organs to give legal support to enterprises, to provide high quality human resources for enterprises.
Besides, Mr. Phong requested Ministry of Industry and Trade to coordinate with Department of Science and Technology, Food Safety Management Board to sign a cooperation program with FFA to solve FFA’s proposals. Investment and Trade Promotion Centre of HCMC needs to work out a foreign investment promotion program in a yearly basis in the food processing sector. From now to end of 2018, Department of Industry and Trade needs to report on the city’s logistics development strategy, collecting enterprises’ proposals to adjust price stabilization program to better serve enterprises.