Agricultural processors should develop their local distribution systems and not just focus on exports if they wish to develop sustainably, said an official at the Ministry of Industry and Trade (MoIT).

Ho Thi Kim Thoa, deputy minister of industry and trade, said the domestic market for farming goods and services in 2011 showed a year-on-year increase of 24.3 percent and reached 2,004 trillion VND (95.4 million USD).

She said that if processors only focused on exports and did not expand their share of the local market they will be vulnerable to global downturns. Meanwhile, she said, foreign firms have expanded their market share in Vietnam.

Thoa cited the example of Viet Tien Garment, Nha Be Garment, Garment 10, Biti's Footwear and Vinamilk that had successfully boosted their share of the local market.

However, numerous processors of farming products have faced difficulties developing their share of the local market.

Manh Quan Dong, director of Phuong Dong Export Vegetable and Fruit Company in the northern province of Bac Giang, said his company have encountered many challenges in the local market.

Dong said his company was based far from Hanoi and other key economic centres with high consumption levels, which meant transport costs were high.

Tran Hong Duc, director of Bac Giang Export Farming and Food Processing Factory, said many processors had limited capital and struggled to meet the costs of warehouse fees.

Tran Thi Hong Hoa, from Hanoi Trading Company (Hapro), said that the supermarket chain set high quality standards on the products it sold, which many domestic producers could not meet. She also said it is essential to have a trademark.

Thoa said local firms need to invest in a distribution system and promote themselves better.

She added that the ministry has organised meetings between suppliers and retailers such Hapro and Saigon Co.op to help sell their products./.