Firms vie for safe food ventures
Firms vie for safe food ventures
Amid growing concerns in Viet Nam about unsafe food, many foreign and local firms are exploring opportunities to produce safe food in the country.
South Korea's CJ Group told Viet Nam News that it plans to have a food safety centre in Viet Nam by 2018. The corporation revealed that it will work with some universities to conduct training courses on food safety and send their professionals from Korea to share their knowledge and experience with students.
Japanese Corporation Fujitsu and FPT Corporation announced the completion of the FPT–Fujitsu Smart Agriculture Cooperation Centre in 2015, aimed to apply Japanese high technology in Viet Nam in order to produce fresh agricultural products such as tomatoes and lettuce.
Techna Nutrition Viet Nam, a subsidiary of the French-based Techna Group which produces and supplies nutrition for animals and plants, is also preparing for the establishment of a factory to produce organic food in Viet Nam.
CEO Chang Bok Shang, CEO of South Korea's CJ Group said that Viet Nam owed much to the potential provided for investors, which makes the country one of the most favourable places to do business.
He predicted that there would be an increasing flow of FDI in Viet Nam's food industry because clean food was essential for daily life. "It is also a sensitive matter so it requires investors have strong experience, understanding and financial background in food to jump in the game," he said
However, Vietnamese businesses have also invested large amounts of money into producing safe foods as well as expanding retail chain stores for the fresh food market that meet quality standards across the country.
Tran Tuan Duong, general director of Hoa Phat Group, which plans to form a value chain in farming and livestock feeding production as well as breeding and distributing food with biosafety technology, said the foreign investment to produce safe food in Viet Nam is not a big concern because Vietnamese businesses understand the Vietnamese market and consumer habits better than foreign businesses and it was easy to build distribution systems in the country.
Pham Minh Thien, deputy director of Co May Agriculture Company based in Dong Thap Province, said the company has decided to invest around VND20 billion (US$899,000) into its projects and a research and development centre to launch more organic agricultural products like rice bran oil, gac fruit oil and sesame oil.
Vingroup has invested VND2 trillion ($89.6 million) in agriculture to keep up with the growing demand for high-quality produce.
Small business affected
Duong of Hoa Phat Group said the local market needed large enterprises with good reputations to participate in the safe food market in order to provide fresh products to people.
Under the massive investment, Vietnamese food producers will be affected significantly, especially small businesses, Nguyen Tien Hung, director of Biggreen Safe Food Viet Nam Limited Company said.
He said that the value of fruit and vegetables was very low compared to production costs, thus profits earned by small companies were also small.
Foreign companies have strong advantages as they have good management systems and advanced food quality inspection technology, Nguyen Anh Tuan, director of the Institute of Policy and Strategy for Agriculture and Rural Development (IPSARD) said.
Large-scale production would help them sell products at competitive prices and many consumers now tend to favour foreign brands, Tuan added when talking about the challenges for the Vietnamese safe food industry.
Measures for local production
In order to maintain its position in the food industry in Viet Nam, Vietnamese firms in general need to improve product quality, according to Van Duc Muoi, general director of Vietnam Meat Industries Limited Company (VISSAN).
Vietnamese enterprises should associate with each other to become a value chain from production, through packaging to distribution in order to take advantage of low costs and provide opportunities for consumers to have greater access to safe food, he added.
Biggreen's director said that the Government and enterprises need to promote the advertising of domestic products in terms of quality and origin to attract consumer's attention and advise them about the availability of products.
In addition, the Government and relevant ministries should encourage domestic enterprises to invest in safe food by giving them loans with low interest rates or exempting them from income tax.
Recently, the Ministry of Agriculture and Rural Development organised a "Green outlets – Safe farm produce" programme, which aims to raise the confidence of consumers about food safety and encourage safe food production and distribution.
