Agriculture Likely to Attract More Investors?

Dr Nguyen Do Anh Tuan, Deputy Director of the Institute of Policy and Strategy for Agriculture and Rural Development (IPSARD) under the Ministry of Agriculture and Rural Development, said that Vietnam’s agricultural sector has gathered enough factors that investors look for: Benefit and opportunity. The benefit is the advantage of agriculture, which includes favourable climate, soil, and abundant human resources or labour force. Regarding policy, the Government of Vietnam always focuses on attracting investment capital, particularly FDI, for agriculture, forestry, fishery and rural development. The opportunity is the deepening and broadening integration process, driven by free trade agreements (FTAs) with regions, nations and territories in the world.

 

However, investors will spend their money on profitable fields. This is what domestic investors have done. In recent years, Hoang Anh Gia Lai Group, TH True Milk Group, Saigon Securities Inc (SSI) and Duc Long Gia Lai Group have invested a lot in agriculture. They have chosen the best to their capabilities. Hoang Anh Gia Lai Group has grown and processed rubber and kept investing in the dairy cow husbandry. TH True Milk raises milk cows. SSI reports 30 percent of its portfolios related to agriculture. Through Pan Pacific Corporation (PAN), SSI has strongly invested in agriculture, forestry, aquaculture and food across the country with the ambitious target of creating a closed chain link. Duc Long Gia Lai Group is growing maize.

 

The aforementioned investors are reaping high and stable profits from their agricultural investments.

 

According to the Foreign Investment Agency under the Ministry of Planning and Investment, as of 2014, Vietnam had 516 effective foreign-invested agricultural, forestry and fishery projects with a total registered capital of more than US$3.6 billion, accounting for 3 percent of projects and 1.5 percent of capital, a very sharp drop from 15 year ago (accounting for 15 percent). Authorities at all tiers are changing their perception about drawing FDI capital into agriculture.

 

Recently, FDI flows into agriculture rebounded. A lot of agricultural projects have been invested nationwide, particularly in the Mekong Delta. After official meetings between Vietnam and Japan in June 2014, a lot of Japanese enterprises have explored investment opportunities in agriculture and food industries in Vietnam. The Bank of Tokyo-Mitsubishi UFJ expressed its desire to introduce Japanese knowledge and experience in combination with Vietnam’s advantages to raise the added value of Vietnamese agricultural products. During the Vietnam visit by the government and business community of Ibaraki Prefecture, Mr Masaru Hashimoto, Governor of Ibaraki Prefecture, affirmed their determination to tap advantages in labour resources of Vietnam and techniques and technologies of Ibaraki Prefecture towards sustainable agriculture.

 

In late 2014, Korea Rural Community Corporation (KRC) signed a public-private partnership (PPP) agreement in agriculture with the People’s Committee of Dong Thap province. KRC will be responsible for raising funds in South Korea to build rice production chains. Many Quang Ninh province-based companies also signed memorandums of cooperation with Taiwanese enterprises in agricultural and seafood product production, processing and preservation.

 

Agricultural investment not only empowers financial strength but also accelerates technological renovation and equipment upgrading. Hence, Vietnam’s agriculture will address weaknesses in quality, brand, agricultural product supply and sustainable development, said Nguyen Do Anh Tuan.