Time to invest in Vietnam’s agriculture

Time to invest in Vietnam’s agriculture

Vietnam, well known with the thousands-of-years wet rice civilization, has been developing its agriculture for the last many generations. However, experts believe that the opportunities for the investment in agriculture only come in 2013.

Vietnam agriculture prospers

The year 2013 has witnessed a lot of businesses in the agriculture sector going bankrupt or dissolved. Coffee, pepper, seafood, wooden furniture businesses have fallen into decay.

Experts have rung the alarm bell over the “coffee crisis” in which a series of coffee companies have got exhausted. Thai Hoa Group, a big guy in the field, has been reportedly struggling hard with the big debts and big losses.

However, agriculture production brought big profits to many other businesses. Of the 10 Vietnamese small and medium enterprises, which have the revenue of less than $1 billion gloried by Forbes Asia, three are in agriculture sector.

The three enterprises meet the strict requirements set by Forbes Asia to be honored. They have the revenue from $5 million to $1 billion, the ROE and pretax profit margin higher than 10 percent, the positive revenue growth and EPS over the last four years, and the debts lower than 75 percent of equity.

The noteworthy thing of the three enterprises, NSC, SSC and PAN, is that all of them are the subsidiaries of SSI (Saigon Securities Incorporated), well known as the big securities firm in Vietnam.

SSI is now a big shareholder in the three firms and the biggest shareholder, who holds the controlling stakes in PAN and NSC.

Especially, though being listed among agriculture companies, PAN, at first, was not keen on agriculture and it was not recognized as a big guy in the field.

Only since 2013, with the returning of Nguyen Duy Hung, Chair of SSI to PAN and his strong commitment on making heavy investment in agriculture, has PAN become a real agriculture company.

PAN has turned the Ben Tre Seafood Import- Export Company into one of its subsidiary and increased its share proportion in Agifish.

Besides the three companies, there are many other big names in the agriculture production. These include NHS, the Ninh Hoa Sugar Company, which has been prospering by making sugar from sugar cane, a very popular plant in Vietnamese villages.

Vietnam strives to develop high technology agriculture

There are many reasons to conclude that it is now the right time to make investment in agriculture.

Despite the big difficulties, it is undeniable that Vietnam makes its presence in the world market through farm and seafood produce. In 2012, Vietnam stayed firmly as the biggest cashew nut and pepper exporter, the second biggest rice and coffee exporter, the fourth biggest rubber exporter and the fifth seafood exporter.

According to Dr. Dang Kim Son, Head of the Institute for the Policies on Agriculture and Rural Development, the biggest problem of Vietnam seafood exports is that they have the prices lower than the world’s average prices. This has been explained by the fact that Vietnam exports raw, unprocessed materials.

This could be the great opportunity for the investors who can make reasonable investments to process farm produce and export them for higher values.

Experts also said that Vietnam has become the destination of foreign investors, and that Vietnam can absolutely take full advantage of the opportunity to become the food stock of the world.

vietnamnet