Big investments in agriculture lift competition
Huge investments have been flowing into the agriculture sector in recent years, making it increasingly competitive.
Into 25 major projects alone VND27 trillion (over US$1.2 billion) has been invested.
Ba Huan JSC has invested over VND1 trillion in its dairy egg production chain, and its profits have been growing by 15-20% annually in recent years.
According to Pham Thi Huan, Chairwoman of the company, Ba Huan plans to further develop its food processing chains and completed the formalities for exporting eggs to ASEAN member countries and other Asian markets.
Through its Vietnam Opportunity Fund, VinaCapital has become a strategic shareholder in Ba Huan after investing US$32.5 million in it.
Ba Huan plans to use this money for restructuring and enhancing its major production lines, according to VinaCapital.
Minh Hung Group, one of the 500 biggest companies in Vietnam, has announced plans to build a HPP (high pressure processing) plant at a cost of VND500 billion in Long An province. It is scheduled to start operation in 2019.
Lam Dao Hung, its Chairman, said the company plans to invest in warehouses and post-harvest preservation technologies.
Earlier this year Hoa Phat Steel JSC launched a poultry project, which is expected to produce 20 million chicken eggs a year, and an animal food processing plant.
Last year Truong Hai Auto Company (THACO) opened the VND500 billion Thaco Agricultural Machinery plant which manufactures 18-120BHP tractors, combined harvesters and other agricultural machinery.
The company targets a 7% share of the tractor market this year, and 26% by 2026.
It also has plans to manufacture other agricultural machinery for the domestic market and export to Laos, Cambodia, the Philippines, Myanmar, and Indonesia.
Speaking at a meeting in HCM City recently, Phung Duc Tien, Deputy Chairman of the National Assembly’s Science, Technology and Environment Council, said agriculture remained one of the key sectors.
Last year the sector did excellently, and its achievements included exports of US$36.3 billion, he said.
This year it was expected to grow further, with exports of agricultural, forestry and aquatic products already topping US$6.1 billion, an increase of more than 30% year-on-year, he said.
But the scale of agriculture remains small, as indicated by some 80 million paddy fields and nearly 10 million farmer households, according to Tien.
Post-harvest losses are huge, infrastructure such as warehousing and processing facilities remain “behind the times”, and added value is low.