Vietnam Businesses Partner with Foreign Firms to Produce Safe Food

Many Vietnamese companies and foreign enterprises have jointly established farms to produce safe agricultural products for domestic consumption and export, state media reported. The U.S.-based Registrar Corp said it had joined hands with 400 Vietnamese enterprises to produce high-quality clean vegetables, fruits and seafood for the local market and the U.S.’s one. David Lennarz, vice president of Registrar, said a lot of U.S. companies want to invest in Vietnam’s food industry. Some are leaving China, where production and labor costs have been increasing rapidly, heading for other markets, including Vietnam. French Techna Group, which specializes in making and supplying nutrients to livestock and plants, also said it considers Vietnam as a strategic market in its plan to expand the business in South East Asia. It commits to cooperate with Vietnamese livestock companies to supply safe products which help farmers improve quality and ease reliance on antibiotics. Van Duc Muoi, general director of Vietnam Meat Industries Company (Vissan), a domestic giant meat processor and supplier, said his company is joining hands with the Dutch De Heus Group to create a chain of supplying clean pork with clear traceable origin. Under the project, with total investment of $3 million, Vissan will slaughter cattle and provide products in the market. The pork product line is expected to hit the market in August. Mr. Muoi said the project is important not only for Vissan, but the whole animal husbandry as well. If it succeeds, Vietnam would for the first time have a safe pork value chain with clear origin which can satisfy Global GAP standards. Many investors from Japan, South Korea and Hong Kong also consider investing in Vietnam’s food industry by joining forces with Vietnamese companies or developing projects themselves in Vietnam. South Korean CJ Cheil Jedang plans to pour $500 million into Vietnam under the mode of foreign direct investment (FDI), or through merger & acquisition (M&A). Pham Duc Binh, deputy chair of the Vietnam Animal Feed Association, commented that it was the right time now for foreign investors to invest in clean food chains, when Vietnamese consumers are worried about the food hygiene. “The scenario of foreign investors dominating the livestock market and then controlling the safe food retail market is foreseeable,” Binh said. (Vietnam Investment Review June 22) He commented that while foreign enterprises have powerful financial capability and modern technologies, Vietnamese companies, with limited resources, can open only several safe food shops a year. Vietnamese big conglomerates have also jumped into the food sector. FPT, the Vietnamese largest IT group, has joined forces with Japanese Fujitsu Group to open smart agriculture cooperation in Hanoi which uses modern technologies to produce safe food in Vietnam. (Nông Nghiep Vietnam – Vietnam Agriculture June 22)