Agriculture attractive to Vietnamese investors, but foreigners stay away
25-03-2015 13:53:18+07:00
Agriculture attractive to Vietnamese investors, but foreigners stay away
While FDI in agriculture has dropped dramatically by 30 times just over the last 15 years, domestic investment in the sector has been increasing steadily in recent years.
Though it believes that FDI will continue flowing into Vietnam in 2015, the Foreign Investment Agency (FIA) warned that investments into agriculture would continue to decrease.
Fifteen years ago, FDI in agriculture, forestry and fisheries accounted for 15 percent of total FDI. The figure has dropped to 0.5 percent in the last three years.
Japan, the largest foreign investor in Vietnam, which has registered 2,500 investment projects in 18 business fields with the total capital of $35 billion, has only two projects in agriculture.
A survey conducted last year by the Japan External Trade Organization (JETRO) of 10,000 Japanese businesses in 19 countries in Asia Pacific found that Vietnam ranked 18th in terms of attractiveness of the agriculture sector.
A Vietnamese businessman noted that foreign investors have to spend big money to build factories and develop material areas.
Meanwhile, they face high risks from changing policies and unhealthy competition in the market.
They prefer to act as distributors for domestic enterprises, rather than organize production.
In February, a workshop discussing the solutions to develop macadamia plantation in Vietnam was organized. Him Lam JSC and LienVietPostBank introduced their macadamia plantation project, capitalized at VND20 trillion, scheduled to be implemented within five years.
Nguyen Duc Huong, chair of LienVietPostBank, which pledged to provide loans to fund the project, said that 250,000-500,000 hectares of macadamia would be developed in the Central Highlands.
Analysts predicted that more Vietnamese investors would pour money into macadamia plantation projects as macadamia is now called a “multi-billion dollar plant” for Vietnam.
Doan Nguyen Duc, chair of Hoang Anh Gia Lai Group, most known as a real estate firm, has also poured money into agriculture.
“I will expand cow breeding because this is the most profitable job Hoang Anh Gia Lai has,” Duc said. “Breeding cows, if you can do this in a good way, will bring the super profit which is even higher than the profit from the real estate development in the golden age.”
FPT, the largest information technology group in Vietnam, has also jumped into the agriculture sector by cooperating with Fujitsu to develop high-tech agriculture projects.
FPT plans to develop a project to grow tomato, cucumber and orchids in glasshouses in Hanoi and HCM City, using the Akisai Cloud service to be provided by Fujitsu.
