Duc Viet JV Co. - An Example of Germany-Vietnam Cooperation
From idea to reality
After graduating from university in Vietnam in 1983, Mai Huy Tan went to Germany to complete his doctorate thesis in mathematics. Returning home, Tan worked for a research institute and then provided consulting services for German companies operating in Vietnam. In 1997, Mr Tan’s friend Mr Campioni, a construction expert, went to Vietnam to seek partners to manufacture PVC products. At that time, the Vietnamese people had yet to use plastic items in construction, so Tan advised his friend not to invest in the field. “Which German products do Vietnamese people like?†asked Campioni. “German sausages,†replied Tan when he was thinking about his neighbour who produced pork sausages. Born in Theuringen, a famous sausage producing town in Germany, Campioni agreed with Tan’s business idea. He said to Tan: “You will be responsible for production and I will take care of the technology.â€
However, it was a very long road to bring the idea to fruition. While Tan was applying for a business licence and developing business plans, Campioni returned to Germany to study technology and techniques. The two men decided to produce sausages meeting the German food standard. In 2000, after the Hanoi Department of Planning and Investment granted a licence, Tan hired a 200 square metre warehouse of a State-owned enterprise in Thanh Xuan. After eight weeks of upgrading the workshop, Tan and his German friend began to implement their plan. In November 2000, the first German sausages were made in Vietnam. In the first one or two years, their products were refused by restaurants and supermarkets when they were introduced to them because they had to be stored at 50C. To promote their products, Tan and his German friend went to the German embassy, asking it to help organise a product promotion ceremony pitched at all German people working in Vietnam and those Vietnamese who studied in Germany. The ceremony was of great success. Since then, Thueringen sausages have been available in supermarkets and restaurants in Hanoi.
In 2003, to expand their business and meet the increasing demand of customers, Tan and Campioni decided to invest more than EUR 2 million in building two more workshops for meat and food processing in the Pho Noi industrial park. With the aim of developing a processing cycle of clean meat ‘from farms to dining tables’, the company will invest late this year in building another slaughtering production line in accordance with German technology. The company will also be converted from a Vietnamese company with foreign experts to a joint venture company under the Law on Foreign Investment.
Cooperation experience
Mr Tan said that one of the most important factors helping his company succeed was the close cooperation between two people from two countries, two cultures and two different ways of thinking. Vietnam and Germany have some similarities in geography and population with small and medium-sized enterprises accounting for 95 per cent of businesses. Furthermore, tens of thousands of Vietnamese people have been trained in Germany and many of them have important posts in the Government and agencies in Vietnam. However, few German enterprises have invested in Vietnam to date. Based upon his own experience, Tan said that one of the main reasons was that German enterprises lacked information about distribution systems, infrastructure and markets in Vietnam. At the same time, it is difficult for them to seek partners in Vietnam. Tan said that most enterprises in Germany were private-owned and they wanted to do business with private enterprises in countries where they wanted to invest in. However, in Vietnam the private sector is yet to have freer conditions to allow them to co-operate with German enterprises. Tan said that Germany is advanced in its business application of legal regulations. Therefore, to attract more investment from Germany, it is necessary to have clear and transparent policies with improved investment conditions and simplified administrative procedures.
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