Preventing Risks for Vietnam’s Exporters

1:06:56 PM | 6/8/2011

In order to support Vietnamese exporters to improve the competitive ability in the context of deeper integration into the regional and international economy, VCCI - HCM recently organised the workshop: "Risk identification and solutions to competitive competence and sustainable development of Vietnamese exporters."
According to the Ministry of Industry and Trade, Vietnam’s 2010 export earned amazing revenue of US$71.63 billion, up 25.5 percent compared to in 2009 and exceeded the targets set by the National Assembly 18 percent. A noteworthy point is the quality of export growth was improved; the structure of exports made a positive move towards higher proportion of industrial goods, manufacturing, commodity groups, high technology goods, reducing exports of crude products. With this growth, estimated in 2011, total export value will increase to US$78 billion, up 10 percent compared to 2010.
It can be seen that the export sectors of Vietnam increasingly dominate the international market, the competitive ability of export goods was raised one step higher, the volume of export goods increased, more abundant than in the previous years, export prices of most products has increased. This is a good sign for the export of Vietnam but together with the impressive growth, many challenges still remain on the journey of Vietnam’s exports to the world. This includes risk management issues, which are now the top concern for exporters in the context of Vietnam's economy developing at a high speed, and fast nowadays.
Speaking at the seminar, Director of VCCI Ho Chi Minh- Mr Vo Tan Thanh shared that Vietnam joining the WTO has opened for businesses a great opportunity for international economic integration and development of export trade. However, while the business environment was expanded, risks also appear more diversified and difficult to control and to cope with. Business environment with such potential risks, the exporters need management methods to prevent risks, particularly risks in the process of transporting goods, risk of liability for the export goods in the consumer market. Accordingly, businesses should have reliable insurance providers, helping them understand the risks as well as raise the awareness for self-protection and self preservation of their rights.
Mr Christopher Shortell, Vice President of Chartis Asia Pacific, said the leading solution to help manage the risks threatening exporters in Vietnam consists of two parts: Trade Credit Insurance specializing in risk with different commercial terms and product liability insurance. With this package solution, the export trade of Vietnam enterprises will be provided the necessary protection of unanticipated losses, the bankruptcy of the purchasers and the liability in cases of compensation for the suppliers. Besides, it gives businesses a competitive advantage to participate and decide the success of the Vietnamese exporters against competitors in the region. According to Mr Christopher Shortell, the typical industry needs to join trade credit insurance may be paper industry, chemicals, pharmaceuticals, services, textiles.
Thus, it can be seen that the effective management of risks in export business does not only help enterprises to reduce financial losses but also to improve their competitive ability by ensuring credibility of the business to the purchasers. Along with the diversification of Vietnam’s export products, the relative insurance requirements also increase proportionally to meet the conditions and terms of exporting enterprises. Hence, export products will become more attractive to buyers not only through the prices of goods, but also the associated services such as flexible payment terms, products insurance, product liability....
Hong Ha