Vietnam signed a Free Trade Agreement (FTA) with the Europe-Asia Economic Union (EAEU) including 5 countries: Russia, Armenia, Belarus, Kazakhstan, and Kyrgyzstan in 2015 and took effect from October 2016. The Eurasian Economic Union (EAEU) covers an area of 20 million km2, with a total population of about 180 million. GDP of the region is about 5,000 billion USD as of 2019. The countries of the Union are countries with abundant natural resources and huge oil reserves.
The Vietnam Chamber of Commerce and Industry (VCCI) assessed that the Eurasian Economic Union, especially Russia, is a large market with great potential. The agreement contributes to the clearing of the tariff barriers, with the benefit that the product structure between the two parties is relatively complementary, not competitive. For fishery products, the Economic Union will apply a tax rate of 0% for all commodities and an unlimited quantity. According to Vietnamese seafood exporters, the Eurasian Economic Union, most importantly, the Russian market is very attractive with strong tax incentives and strong consumption for Vietnamese seafood industry, especially Pangasius products.
There are only about 10 pangasius manufacturers in Vietnam have export license to the Eurasian Economic Union. This market is considered easy-going with regulations not too strict on import quality compared to other markets such as the US, Japan, or Europe. HungHau Agricultural Company is one of the few Vietnamese pangasius manufacturers that can take full advantage of this opportunity to boost its export quantity and revenue. In addition, the Board of Directors of HungHau Agricultural also has a long-term sustainable development towards this potential market through the promotion of procedures to establish a HungHau Agricultural Subsidiary in Russia. Therefore , HungHau can distribute its high quality products from Pangasius to consumers through nationwide chain of supermarkets and distributors.
Earlier on February 7, 2017, Hung Hau Agricultural JSC, Hung Hau Education JSC, and Legcopromuslenui Park Company, Russia organized a signing ceremony of cooperation agreement. Legcopromuslenui Park established a light industrial park that produces quality goods for wholesale and retail networks throughout Russia. This cooperation also creates favorable conditions for production and business enterprises to seek investment opportunities and expand markets in Russia. In agriculture, Hung Hau Agricultural will be a strategic partner with light industrial park in Russia through the application of experience and technology in production. HungHau Holdings and the Russian Business Association have a strong relationship for many years in Vietnam – Russia cooperation and trade.