It has been nearly two decades since the first international fast food chain entered Vietnam in 1995, and dozens of international brands now operate in the country. Despite this, local businesses are still not involved in the production chain of this fast growing sector.

Fast food chains post 20 percent growth on an annual basis, but these international companies still have to import most of their raw materials.

Dunkin’ Donuts, a well-known US food chain, marked its official arrival to Vietnam last week by opening its first store in Ho Chi Minh City’s District 7 on November 22.

But 80 percent of the materials needed to make the donuts at this store have to be imported, Nguyen Hai, CEO of the Vietnam Food & Beverage Services Co Ltd, which currently owns the franchise of many international fast food brands in Vietnam, revealed at the opening ceremony.

Hai acknowledged that it is necessary for international fast food brands to increase the localization rate, or the amount of materials that can be domestically sourced, but local suppliers fail to meet the high requirements set by Dunkin’ Donuts for its materials.

Technically speaking, Hai said, the presence of international fast food chains to Vietnam creates opportunities for local food suppliers, but few businesses have managed to join in the game.

KFC, which entered Vietnam in 1996, said its localization rate is now 30 percent higher than 17 years ago, but it is not a simple task to increase the rate.

A KFC representative said it had to send a group of experts from the US to train Vietnamese farmers how to raise chicken that meet KFC’s meat quality requirements.

Even so, local businesses can now only supply burger and chicken meat for the Kentucky-based restaurant chain, while other materials are still imported.

“We face hindrances in seeking qualified supplying networks for our products,” KFC marketing chief Le Hoai Nam told Tuoi Tre.

Similarly, Lotteria still has to import potatoes and sauces—the two most important ingredients for its Vietnamese restaurants.

Huynh Tuan, director of a food production company, said Vietnamese businesses have attempted to supply materials for the foreign fast food chains, but most of them failed to pass the strict quality standards demanded by the latter.

“Most of the suppliers for the international fast food restaurants in Vietnam are currently foreign-invested businesses,” he said.

ABC Bakery is among the few local businesses that benefit from the huge presence of the international fast food chains in the country.

The HCMC-based bakery is the authorized burger supplier for KFC, Lotteria, Burger King, and starting next year, McDonald’s.

ABC Bakery supplies some 40,000 burgers for these partners per month, and sales have constantly grown over the last five years.

“While burger supply accounted for 15 percent of our total revenue in 2011, the figure is now 25 percent,” ABC Bakery director Kao Sieu Luc said.