Vietnamese Oils Industry Needs Help

| January 11, 2012

Essential oil production threatenedThe Government should issue policies to support the development of the domestic oil, aroma and cosmetic industry, delegates said at the third congress of the Viet Nam Association of Oil, Aromas and Cosmetics last Saturday. Tran Binh Duyen, chairman of the Mediplantex National Pharmaceutical JSC, said there was a huge demand for essential oils and aromatic spices both in domestic and foreign markets.

Viet Nam has favourable conditions to grow various kinds of oil plants, including peppermint, holy basil, cinnamon tree and anise, he said. Previously, the country had exported thousands tonnes of essential oils per year. However, the situation has completely changed in recent years since the cultivation areas for these plants shrank severely, he added. Duyen attributed the situation to the lack of a long-term development plan as well as Government support.

In addition, the current high tariffs imposed on essential oil products have made locally made products less competitive than imported ones, he said, requesting the Government to reconsider its policy in this regard. However, other delegates at the congress disagreed, saying a reduction in taxes might be impractical because it would have to extend to other agricultural commodities as well.

Hoang Van Duoc, the association’s chairman, said with the current situation of small-scale production and backward production technology, enterprises involved in the industry are only able to produce raw products with low export value, while refined essential oils were imported at much higher prices. As a result, the industry has a very high annual trade deficit of about US$65-100 million, mostly because of the import of cosmetics and aromatic spices, he said.

Nguyen Minh Khoi, head of the National Institute of Medicinal Materials, said the industry should seek ways to find more outlets for essential oil products that Viet Nam has an advantage in. It should also focus on growing high quality seedlings to replace poor quality plants, he said.

Delegates suggested that the association works with relevant ministries and localities to set up zoning plans for the industry. The association, which has 80 members, said it would soon submit to the Government a five-year (2011-16) -development plan for the industry.

It will also work to set up a stable material zone for high value oil plants in the coming years, Duoc said. The association will co-operate with local and foreign organisations to hold more seminars, training courses and trade promotion events to support its members.

It plans to set up a portal to provide more information to its members, he said.

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