Hau Giang Agricultural Product Processing JSC Globalizing Hau Giang Rice

With a large-scale investment, modern processing lines and well-supplied input areas, the Chau Thanh A rice milling plant will help fill the gap in downstream rice processing in Hau Giang province, helping increase the value of local rice and meet export requirements.

Rough path for rice export

With a cultivated area of nearly 80,000 ha, three harvests a year and yearly output of 1.2 million metric tons, rice production is the biggest agricultural sector of Hau Giang province. However, for years, the development of the rice processing and export industry fails to match local potential.

Compared with other provinces and cities, the processing capacity of local rice milling facilities is quite limited, largely small-scale ones (the largest facility has a monthly capacity of 2,500-5,000 tons). Rice products are mainly raw, below export standards. High rice prices weaken its competitiveness.

Production is still fragmented, lack of heterogeneity of varieties results in uneven rice quality - a challenge for processors to meet requirements for product quality from partners. As a result, local rice companies only sell rice in the domestic market or sell to large companies rather than export directly to foreign countries.

On the other hand, most rice millers do not attach importance to building cooperation with farmers to create rice growing areas, resulting in uneven input quality. Paradoxically, in some places, farmers grow high-quality rice but local processors fail to make high-quality output because they purchase raw rice from different places where quality is uneven. Over the years, accessing world markets remains tough for Hau Giang rice.

Working side by side with farmers

Mr. Huynh Thanh Phong, Director of Hau Giang Department of Industry and Trade, said, to resolve the above-mentioned limitations, in the past time, the province has attracted investors to invest in modern rice processing to make high-quality products for export. Particularly, the province has focused on building rice-growing areas for processors to stabilize output for farmers and improve profits for them.

“The province has introduced many preference policies to attract large rice processors expected to raise the value and brand of Hau Giang rice and bring local rice to the world," he said.

In response to this policy, in March 2020, Hau Giang Agricultural Product Processing Joint Stock Company was granted a decision by the Hau Giang Provincial People’s Committee to invest VND48.4 billion to build a rice milling plant, covering 750 square meters in Tan Hoa commune, Chau Thanh A district. The project will mill, dry and polish 8-20 tons an hour (500 tons a day) and employ about 40 workers.

The project is well-located as its storage facilities and conveyor belts are connected to Xang Xa No canal, dubbed the “Western rice road”. In addition, it is conveniently connected to rice-producing regions through the uninterrupted water traffic system.

In August 2020, the company started construction of the project and planned to complete and put it into operation by December 2021.

Mr. Pham Quang Hung, Director of Hau Giang Agricultural Product Processing Joint Stock Company, said, in the past, the company mainly processed raw rice (milled only) for the domestic market. The Chau Thanh A rice milling plant is invested with modern machinery and equipment to improve product quality. It will dry, mill, polish and package commercial rice for domestic consumption and for export.

“We have cooperated with two rice production cooperatives, engaged by local authorities, to build stable input supply areas and committed to purchasing all rice at market prices. We aim for sustainable development and branding of organic rice, VietGAP-certified rice growing areas, professional processing and packaging processes, and full label and traceability to meet export standards”, he added.

In the coming time, Hau Giang Agricultural Product Processing Joint Stock Company will also develop a number of high-end rice products such as special rice, fragrant rice and herbal rice to meet the demand for good-for-health food and help customers properly perceive the value of rice and give up the habit of using rice without clear certified label and traceability.

The establishment of a large-scale rice processing facility in a major rice bowl in the Mekong Delta will help realize the goal of making Hau Giang a rice processing center in the region.

Source: Vietnam Business Forum