MoIT offers advice over African deals

October 15, 2014 | 10:56

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The Ministry of Industry and Trade (MoIT) recently proposed measures that Vietnamese companies should take to avoid risks whenever they were seeking business opportunities in Africa.

Workers at the Textile Joint Stock Corporation 10/10 produce mosquito nets. The company produced 58 million mosquito nets in the first nine months, 90 per cent of which were exported to African markets. - VNA/VNS Photo Tran Viet

The measures were made following several instances where African companies received payments from Vietnamese importers but failed to deliver the purchased products.

The ministry urged Vietnamese companies to limit market information research and transactions with clients on the Internet. The companies should instead be actively seeking business opportunities using official websites such as www.vietnamexport.com and www.moit.gov.vn, the ministry's e-portal.

They should also contact the ministry's Africa department, the West Asia and South Asia market departments of African and Vietnamese embassies, and the trade counsellors of both countries.

Regarding payment methods, the ministry warned that companies should refrain from using the practice of Document Acceptance (D/A) with African clients, as exporters could risk losing goods.

Vietnamese companies should also ask their partners to use irrevocable letters of credit opened at prestigious banks whenever making payments and limit the use of deferred payments. If the Document Against Payment (D/P) method is used, Vietnamese companies should ask for deposits to ensure safety, at a rate of 30 per cent.

Products imported from Africa should be checked before boarding.

Africa is an important supplier of raw materials for Viet Nam. Figures from the Viet Nam General Department of Customs show that the country imported US$742.7 million from Africa in the first half of this year, representing a 30-per cent year-on-year increase. Major imports include cashew, cotton, timber and scrap metals.

VNS

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