Fruits and Vegetables in Vietnam - International Food Policy ...

11.2 Perceived level of Competition
Processors perceived that competing processing companies operated at many levels, ranging
from market and village level, through to national and international levels. Small processors
perceived their major competition to be operating at the commune level, while medium-sized
processors perceived major competition at the commune and province level. Not surprisingly, large
processors cited major competition at the district and province level. The levels of perceived
competition are similar for processors in the North and in the South.
The average number of competitors perceived by processors increased between the founding
date of the business and between 1998 and 2000. The number of competitors perceived by processors
increased from eight, when the business started, to 12 in 1998, to 17 in 2000. These figures may
represent a trend toward increasing competition in the fruit and vegetable processing sector.
11.3 Trends in profits
Over three-quarters of the processors interviewed expected to make profits in 2001 and an
additional 20 percent reported breaking even. Just 2 percent reported losses. This makes 2001 the
most profitable year over the period 1996-2001. The proportion of processors that were profitable did
not increase steadily from year to year, however. There appears to be a fair amount of volatility in
profits from year to year, probably as a function of weather and competition (see Table 5-41).
Overall, almost 88 percent of processors expected to have the same or improved profitability
in 2001 as their profitability in 2000. Smaller firms were even more likely to report improved
profitability (95 percent) than large firms (83 percent). The proportions of processors expecting to
have the same or improved profitability in 2001 compared to 2000 was similar in the North and
South.
Profit levels of processors can change for many reasons. The main reasons for profit change
cited by processors were changes in the sale price of products, price volatility of inputs and changes in
the volumes of trade. These three factors were the major reasons for profit change cited by all sizes of
processor, but price volatility of inputs was more often cited as a problem by small processors.
12 Conclusions
The majority of processors surveyed were privately-owned firms, relying on family labor and
a relatively smaller amount of hired temporary labor. Processors operated on a seasonal basis, with
peak and non-peak periods depending on the types of fruit and vegetable that they process. Only a
small minority of processors were sufficiently diversified in the range of products that they processed
to operate processing all year round.
The processors generally were involved in fairly basic processing of fruit and vegetables,
with the most types of processing being drying, salting, and canning. Most processors only produced
Chapter 5 Fruit and Vegetable Processors Page 5-22