Tay Nguyen Coffee Import-Export & Investment Co.: Leading Firm in Vietnam's Coffee Sector

Tay Nguyen Coffee Import-Export & Investment Co. was formerly a subsidiary of Vietnam's Coffee Corp. It was set up in 1995 and separated as an independent State-owned enterprise purchasing, processing and exporting coffee. Established at a time when Vietnam's coffee sector was making great progress, ranking 2^nd worldwide in coffee production with total areas under cultivation of 520,000 ha and total outputs of 900,000 tonnes, the company had advantages in the purchase of unprocessed coffee. However, it then encountered difficulties including a tumble in price of coffee for export after the 1998-1999 crop. At that time, the price of processed coffee stood at USD$1,373 per metric tonne, but in 1999-2000 it dropped by 40 per cent to USD$823 per metric tonne and by 2000-2001 dropped 47 per cent to US$436.6 per metric tonne.

Faced with such an unstable situation, the company actively took appropriate measures to minimise the negative effects on their business. With the determination of staff and the support of the State, the company overcame these challenges and attained export revenues of nearly US$62 million in the first year of operation. With a motto of "Sustainable growth based on quality of products, corporate prestige and co-operation", the company always focuses on improving the quality of its products and ensuring goods delivery following contracts. The company was an early adopter of the ISO9001:2000 quality management standard to ensure the quality of its products from purchasing to processing and through to the packaging phase. The company can now output around 500-600 tonnes of processed coffee a day at the quality required by customers.

The firm has clientele in all continents including major European countries, the US and Japan. Its export revenues stood at around US$67 million annually during the 2000-2003 period. In the first six months of this year alone, it posted total exports worth US$66.5 million and is forecasting US$100 million for the whole year. With consecutive years of effective operation, the company has paid dozens of billion of Vietnamese dong to the State budget.

In 2001, the company was honourably granted the Third Class Labour Medal for its achievements since 2000. It was also received the Asia-Pacific Prize from the Asia Quality Organisation. The Ministry of Trade has also awarded the company a diploma of merit for its good results in export.

Currently, like other firms in the coffee industry, the Tay Nguyen Coffee Im-Export & Investment Co. is still short of required capital for operation expansion.

The company's greatest hope is that coffee producers are more intensively supported with soft loans from the government and loan maturity extension during coffee harvesting times to avoid being forced to sell their processed coffee at low prices in order to reap funds for continuing their business. This will also help enhance Vietnam's coffee industry in the world market.

To meet the increasingly stringent demands of the marketplace, the company has to unceasingly improve the quality of its products. In the coming time, the company will launch new products of roasted coffee nuts and coffee powder for export. It will also research and penetrate the potential markets of China and ASEAN.

Table of Export Revenues