Vietnam Environmental Technologies Export Market Plan

Distribution of environment-related equipment—such
as pumps, filters, valves, motors, etc.—tends to be
managed through local companies, both state-owned and
private. Again, vendors should confirm that the agent
either has an import license or a relationship with a
licensed trading company.
Common distribution channels for vendors include:
• Local companies that import products for their own
use. These may be environmental service companies
which sell pollution prevention or treatment equipment
but that need to import parts.
• Manufacturers that import under consignment.
• Import-export companies that import on behalf of other
agents or to serve as an agent themselves.
Local companies provide marketing and promotion
services and can be more effective in navigating
distribution channels than would a foreign company
establishing a new presence in the market. They can be
invaluable for their contacts and relationships with
equipment buyers, such as provincial, municipal, and
district government officials.
It is important to provide local agents/distributors with
adequate training so that they are able to provide aftersales
services to buyers.
foreign-exchange transactions. While some foreigninvested
firms may have convertibility rights, it does not
mean that the needed foreign currency will be available,
as the market may fluctuate wildly. Convertibility rights
are generally issued to import substitution manufacturers
and other “important” industries.
Letters of credit are the most common method of
payment for importing goods. Vietcombank, Vietnam’s
largest state-owned bank, is the most active bank in
issuing letters of credit. However, it is often reluctant to
allow confirmation of its letters of credit by overseas
banks. Also, Vietnamese banks do not always accept that
a letter of credit constitutes a commitment on their part
to meet obligations, and some banks have walked away,
claiming that the importer is unable or unwilling to pay.
It is advisable for foreign exporters to open a letter of
credit with a foreign bank branch in Vietnam. There are
more than 20 foreign banks with branches in either Hanoi
or Ho Chi Minh City. It is fairly standard for foreign
companies that do not have a legal presence in Vietnam,
such as a representative office, to import and sell goods
through a state-owned enterprise that has import licenses
and convertibility rights.
Consignment sales are not recommended unless the
distributor’s performance and reliability can be verified.
Once a proven track record is established, distributors
often ask for payment terms of 30 to 180 days.
14.5—Payment
The Vietnamese dong is not a convertible currency.
Moreover the state bank imposes strict controls on
52 U.S. Department of Commerce, International Trade Administration