The paper highlights the level of product diversification in the country and the need for processing technologies to steer the industry to a greater heights. The paper explains that coconut is used for many purposes such as for drinks (young tender coconut), cooking (mature nuts), processing (copra) as well as for exporting in the form of mature nut, copra, crude and refined oil, desiccated coconut, shell charcoal, and fibre. Due to its multiple uses, there is competition for buying coconut. Shell charcoal products are produced in Vietnam and exported overseas and there are four activated carbon factories established in the country which has shown high potential. There are several obstacles such as limited funds, lack of processing techniques and high interest rate. The sustainable development of the coconut industry and to bring stable income to the farmers, there is a need to expand processing capacity of coconut-based products. The Vietnamese government has also recently devised a strategy for developing and promoting oil crops including coconut.