South Korea eyeing Vietnam as new farm produce supplier

South Korea eyeing Vietnam as new farm produce supplier

South Korean leading food groups while following a strategy on expanding their operation in Asia, have been “hunting” for Vietnamese materials.

Under the MOU, the project would be implemented in two phases. In the first one, CJ would grow chili on an area of 1 hectare for 1 year on a trial basis.

After that, the two sides would negotiate on the growing of chili on a large scale for 10 years, 2014-2024, or longer, on an area of 500-600 hectares. The project would need 3,000 farmers and provide some 3,000 tons of dry chili, or 12,000 tons of fresh products.

Once the chili material supply source gets more stable, CJ would set up a factory to process and pack chili-made products and seasoning sauces in the locality.

In the immediate time, CJ would provide varieties, transfer technology to Vietnamese farmers, while promising to take responsible for the outlet of the products.

Lee Ho Yeon from CJ CheilJdang, a subsidiary of CJ, said the company highly appreciates the Vietnamese market.

“In the past, Japan was the most important partner in our material collection strategy. But now Vietnam is the most important,” he said.

The cooperation with Ninh Thuan province is just one of a series of projects the company plans to implement in Vietnam. CJ is also trying to grow cabbage in Vietnam, which, together with chili, are the most important materials to make kimchee, a familiar fermented Korean dish.

Emart, a well-known South Korean retailer, has also been seeking the new material supply sources, while moving ahead with the plan to set up its first supermarket in Vietnam.

Emart is now considering two products – vegetables and lobster – before making decision whether to use the products.

According to Lee Chang Hun, who is in charge of collecting farm produce of Emart, Vietnamese G7 coffee and some household appliances available at Emart supermarket chain just accounts for 2 percent of the total products displayed there. Meanwhile, there are few vegetables and fruits.

The supermarket chain’s online sale turnover in Vietnam is about 700 million won a year, while the figure is expected to increase rapidly in coming years.

Lee Chang Hun declined to reveal the detailed plan on the first supermarket in Vietnam, but said that the joint venture between Emart and U&I are seeking a partner in HCM City and Hanoi to implement the project.

According to the South Korean Exporters’ Association (KOIMA), a lot of other small and medium enterprises also try to seek Vietnamese partners for trade cooperation.

Hae Moon Chung, Secretary General of ASEAN – Korea Center, has noted that there is a growing tendency of South Korean investors flocking to South East Asia in anticipation of the establishment of AEC, the ASEAN Economic Community, slated for 2015.

“Korean businesses believe that they need to obtain the agreements and commitments about the farm and seafood produce soon so as possible to grab the opportunities in the region after 2015,” he said.

vietnamnet