Download - Doing Agri Business in Vietnam - The British Business ...€¦ · The important economic sector of Vietnam (accounting for 20% GDP, > 40% employment) Huge agricultural potentials

16th February 2017

Doing Agri Business in Vietnam

Working alongside government to deliver on-demand trade services for UK companies

Tu Minh Thien

Deputy Director,

Agricultural Hi-Tech

Park of Ho Chi Minh

City

• PhD in Ecomonics, University of Economics and Law –National University of Ho Chi Minh City – Vietnam

• FulBright Economics Teaching Program in Vietnam

• Deputy Director of Agricultural Hi - Tech Park of Ho Chi Minh City (AHTP)

• former Delegate of People City Council (2011 – 2015)

• Director of Investment and Trade Promotion Centre (ITPC) (2008 – 2011)

• Ho Chi Minh city Center for Agricultural Consultancy and Support (HCACS), Director (2005 – 2008)

Personal profile

HIGH-TECHNOLOGY IN AGRICULTURE IN VIETNAM

Tu Minh Thien

MANAGEMENT AUTHORITY

HCMC HI-TECH AGRICULTURAL AREA

Cell No. (+84)913 914 400

Email: [email protected]

Content

1. HCMC’s Overview

2. Goal for high-technology (hi-tech) agricultural areas (pursuant to Decision No. 176/QĐ-TTgdated 29/01/2010 by Governmental Prime Minister)

3. An overview of technological and technical issues of hi-tech areas

4. Development of domestic hi-tech areas

5. How’s to do Agri business in VN?

• The biggest economic centre,culture, education, science andtechnology of Southern keyeconomic zone.

• Area: approximately 2,000 km2

with 24 districts, accounting for0.63% of the national area.

• Population: around 8 million,accounting for 8.79% of thenational population.

• Weather: 2 seasons, the averageannual temperature 27oC.

HO CHI MINH CITY

OVERVIEW

AN ECONOMIC HUB OF THE NATION

• Contribute 21,6% to the national GDP, 1/3 national budget

• Account for 28 % of total exports of goods, 1/2 of international tourists

• 26% of the total number of FDI investment projects into Vietnam

HO CHI MINH’S CITY GDP STRUCTURE

Tan Son Nhat Airport

The biggest airport of Vietnam

350 Flights

HO CHI MINH CITY’S PORT SYSTEM AREA

80

2015 2020

200

Clearance capacity

Unit: Million Tonnes (2015)

MEKONG DELTA

TRANSPORTATION SYSTEM IN HO CHI MINH CITY

NATIONAL ECONOMIC HUB

4000

ha

Southern New Urban Area of the City

Total

natural

area:

7000 ha

Multifunctio

nal

Complex

AreaPopulation Size:

500.000 people

HO CHI MINH CITY COMMERCE

>100TRADE

CENTRES

>240TRADITIONAL

MARKETS

HO CHI MINH CITY TOURISM

>5 millionVISITORS

• 1.402 HOTELS

• 37.000 ROOMS

• 92 HOTELS 3–5 *:

11.409 ROOMS

HEALTH SYSTEM

>103HOSPITALS

>40.000MEDICAL STAFF

>9.000DOCTORS

~75UNIVERSITIES

& COLLEGES

~700.000STUDENTS & OVERSEAS

STUDENTS

HUMAN RESOURCE IN HO CHI MINH CITY

The important economic sector of Vietnam (accounting for 20% GDP, > 40% employment)

Huge agricultural potentials

Increasing demand domestically

Chances of good growth Necessary for investing in and applying technology in cultivation, husbandry, aquaculture and forestry

Food processing

Investment in supporting industries: engineering, renewable energy, greenhouse

Applying IT

Management: production and supply chain, branding, etc

Why VN?

1. Goal of hi-tech agricultural areas (Decision 176)

Goal:

• Reaching for a comprehensive and modern agriculture with a large volume of production, which are productive, quality, effective, and highly competitive, with a 3.5% growth per year; ensuring national food security in short and long term.

Goal of hi-tech agricultural areas

Objectives 2016 – 2020:

Having Vietnamese agricultural technology equal to intermediate level in Asian region.

Creating and producing 2-3 genetically modified plants, 2-3 aquaculture breeds by genetic engineering techniques and biotechnology , recognizing and producing 2-3 hybrid breeds with high productivity and quality for each type of basic plant, animal and aquaculture , and 2-3 new hi-tech processes in each sector;


Objectives 2016 – 2020:

• Developing comprehensively hi-tech agriculture,including hi-tech agricultural enterprises, hi-techagricultural areas, and hi-tech agriculturalproduction areas. By 2020, each province of themajor economic area has 7-10 enterprises, 5-agricultural production areas, and each ecologicalarea has 1-3 hi-tech agricultural areas.


Objectives 2016 - 2020

• Production value of hi-tech agriculture accounts for 30-35% of total agricultural production of the country

Decision No. 1895 dated 17/12/2012 by Prime Minister on approving the development program for hi-tech agriculture

• Creating and producing 2-3 new breeds for each basic plant, animal, and aquaculture, which are productive, quality, and resilient; 3-4 innovative technologies in each sector; 3-4 advanced technological processes in each sector; 3-4 types of biological outputs; 3-4 types of feed, 2-3 kits, 2-3 types of vaccine, 2-3 types of new equipment and machinery for agricultural production.


• Production value of hi-tech agriculture accounts for 35% of total agricultural production of the country

• Developing a system of 200 hi-tech agricultural enterprises in provinces of major economic zones, building 1-2 hi-tech agricultural zones in each agricultural area, and 2-3 hi-tech agricultural areas in each province of major economic zones.


• Developing a concentrated area for hi-tech agricultural production areas for one or some produce with high quality, productivity, and economic effectiveness.

• Developing hi-tech services for agriculture, initially founding basic system of hi-tech services for agriculture.

2. Overview of technologies and techniques in hi-tech

agriculture

Applying hi-tech in agriculture

In cultivation:

• Applying biotechnology in biological production for agriculture and environment (micro-organism, algae, plants, fungi, etc)

• Multiplication technology using tissue culture

• Creating new breeds by gene mutation

• Hybrid technology using molecular biology


• Cultivation without soil: hydroponic, deepen and floating board technology, aeroponics, germination;

• Using sprinklers with automatic or semi-automatic control systems;

• Using greenhouses, PE film houses with automatic or semi-automatic control systems


In husbandry

• Embryo cutting technique and improving in vitro fertilization, and frozen embryo, sperm technologies

• Modern husbandry with assembly line and automatic control system.

• Producing and using biological products with natural origins to limit the use of antibiotics; producing vaccine

• Producing biological outputs supporting metabolism such as enzym phytase, cellulase, protease … to use feeds effectively and limit environmental pollution


In aquaculture

• Applying biofloc, biological technology for water treatment, and disease prevention

• Applying genetic and cell technologies in producing disease-free breeds which are resilient; producing unisexed and threefold breeds; coloring pet fish…

• Producing and applying equipment and tools for prompt diagnosis of aquaculture diseases.

Applying hi-tech in agriculture• In management

1. Applying ICT in market approach and value chain

2. Applying ICT in boosting productivity of plants and animals

3. Applying ICT in risk management

4. Applying ICT in land management

5. Applying ICT in improving food safety and origin tracking of agricultural products

3. Current situation of domestic hi-tech agricultural areas

Planning

• 29 hi-tech agricultural areas have been constructed and put into operation and some others are being planned at 12 cities/provinces of 07 economic regions

• 07 areas have been operating in 07 cities/provinces

• 22 areas are being planned at 13 cities/provinces

Basic functions as per Hi-tech Law

• 12 areas are planned with 5 functions (research and application, experiment, demonstration, training, and production),

• 14 areas are planned and constructed with local budget.

• 10 areas use infrastructure investment from enterprises (joint stock and limited companies)

• 05 areas use local budget and capital from enterprises

Organizing

3 types of management :

• Governmental management,

• Public service delivery units

• Enterprise

Research products and areas

• Cultivation(main targets include vegetables, flowers, bonsais, herbs, forestry plants, fungi, micro-organism outputs, plant growing regulators),

• Husbandry (main targets include pig, cow, and chicken),

• Aquaculture (main targets include pet fish, some fresh water and brackish water fishes with high economic values, micro-algae) .

All three sectors focus on multiplication and technological development


▪ 88,17 ha at Cu Chi, founded in 2004, put into operation in 2010

▪ 4 subsidiary centers (hi-tech research and development center, hi-tech agricultural incubator center, infrastructure center, hi-tech agricultural training center)

▪ 260 staff

▪ Focus on vegetables, orchids, biological production

▪ 14 investment projects, 23 incubated enterprises


• Extended projects

1- Hi-tech area for aquaculture salt water, brackish water) at Can Gio District, scope : 90 ha

2- Hi-tech area for husbandry at Binh Chanh District, scope: 170 ha

3- 2 projects of Hi-tech area for cultivation at Cu Chi District

• Location: Pham Van Coi and Phuoc Vinh An Wards, Cu Chi District

• Scope: 200 ha and 23.3 ha

PHU YEN HI-TECH AGRICULTURAL AREA

• Organization: Management authority of Phu Yen hi-tech agricultural

• Founding decision No. 1037/QĐ-UBND (02/7/2014)

• Address: 159 Lac Long Quan, Tuy HoaCity, Phu Yen Province

• Sectors: cultivation, husbandry, aquaculture, agricultural products processing and preserving, producing feed and biological outputs for Central Coastal area of Vietnam.

• Area: 460 ha

DA LAT HI-TECH AGRICULTURAL AREA

• Organization:

Management authority of Da Lat hi-techagricultural

Founding No. 2571/QĐ-UBND(11/11/2011)

• Address: 35 Tran Hung Đao – Ward 10 – Đa Lat

• Sector: cultivation, husbandry, aquaculture, agricultural product processing and preserving

• Area: 221.32 ha

HAU GIANG HI-TECH AGRICULTURAL AREA

• Organization:

Management authority of Hau Giang hi-tech agricultural

Founding No. 758/QĐ-UBND (dated06/5/2013)

• Address: 406 Administrative Area, Ward 5, Vi Thanh City, Hau GiangProvince.

• Sector: cultivation, husbandry, aquaculture, forestry product processing and preserving.

• Area: 5,200ha

AN THAI HI-TECH AGRICULTURAL AREA

• Organization:

• U&I Agricultural JSC

Founded on: 13/10/2010

• Address: An Thai hi-tech agricultural area – Phu Giao – Binh Duong

• Sector: cultivation

• Area: 411.75 ha

HCM CITY BIOTECHNOLOGY CENTER

• Founded in 2004

• Address: Trung My Tay Ward, Highway 1A, District 12

• Sector: applying biotechnology

• Area: 23 ha

AN GIANG PROVINCE BIOTECHNOLOGY CENTER

• Founding decision No. 1439/QĐ-UBND (dated 23/8/2012)

• Address: 5/2 Ngo Quyen – My Binh Ward –Long Xuyen City –An Giang Province

• Sector: applying biotechnology

OTHER ORGANIZATIONS

KHANH HOA HI-TECH AGRICULTURAL AREA (2010): 65 ha, focusing on transplanting and improving mangos, and providing XN-1 rice

DONG NAI BIOTECHNOLOGY APPLICATION CENTER

TIEN GIANG HI-TECH AGRICULTURAL AREA : 44 HA

DONG THAP HI-TECH AGRICULTURAL AREA (2011): BONSAIS – FLOWERS AND ORCHARDS

DA NANG BIOTECHNOLOGY APPLICATION CENTER

Daknong hi-tech agricultural area

4. How’s to do Agri Business in VN?

Demands of co-operation

Training

Investment

PPP/ BT/ G2G/ B2B

Applying

ICT

Certificate issuance

Experience

Forming projects

Experts

Forming regions

Labs

Infrastructure

Notes• Select a few basic plant and animal and appropriate technology:

• Seed & breed producing – selecting (vegetables, cow, pig, poultry,

• Produce Bio-product from agricultural waste or agro – by product.

• Apply post-harvest technology into family scale (preservation, storage, packaging..)

• Set-up the Aquaponics model to urban and sub-urban area,

• Extracting elements from herb & plant to process functional foods or cosmetics, pharmaceutical (Moringa, Kounjat, Kuzhu, Rice germ, Aloe vera, Garlic, Actiso, Residence hall, Dendrobium officinale Kimura et Migo, Anoectochilus formosanus…)

• Establish vertical and horizontal chains in agriculture

• Apply post-harvest technology to aquaculture products, vegetables, .

• Train HR in hi-tech agriculture

IN-VITRO CULTURE OF ORCHIDS

NURSERY AND PROPAGATION GARDEN OF ORCHIDS

MELON IN GREENHOUSE

TOMATO IN GREEN HOUSE MODEL

DISPLAY AND STORAGE AREA FOR AQUATIC PLANTS

HEADLINE GOES HERE

Tran Trung Kien

Lawer – Partner

SB Law

UPDATE ON VIETNAM LEGAL FRAMEWORK IN

AGRICULTURE

Contents

www.sblaw.vn

General introduction

Starting agricultural business in VN

Several main obstacles

www.sblaw.vn

Starting agricultural business in Vietnam

- Setting up a commercial presentations in

Vietnam;

- Entering into Business Co-operation Contract

with local enterprises

- Selling agricultural products into Vietnam

www.sblaw.vn

Setting up commercial presentation in Vietnam

• Setting up a representative office.

• Setting up foreign invested companies in Vietnam under the form of wholly foreign owned company or joint venture company.

Form of Company

www.sblaw.vn

Joint

Stock

Company

Limited

Liability

Company

www.sblaw.vn

Licensing Process

BRC

Operation

IRC

- Provincial

Department of

Planning and

Investment or Board

of Management of IP

- 15-20 working days

- 05 working days

-Capital contribution

- Recruit Employees

- Amendment of

BRC; IRC

Business Co-operation Contract

www.sblaw.vn

- Business Co-operation contract shall be made between Foreign Entities and Local Entities

- Business Co-operation contract shall be registered with the competent authority. It must engage with a specific investment project.

Selling agricultural products into Vietnam

www.sblaw.vn

- To determine origins of products to be exported into Vietnam.

- To determine categories of products to be exported into Vietnam.

- To study Vietnam technical requirements applicable to products;

- Licensing procedure for obtaining import license applicable to agricultural products

Several main obstacles

www.sblaw.vn

✓There is always gap between Vietnam regulation and practice in agricultural sector.

✓Business plan can be challenged by unwritten instructions from Decision Makers

www.sblaw.vn

Several main obstacles-Vietnam Government holds restraint against innovations in

biotechnology;

- Vietnam lacks skilled experts or qualified entities for

conducting assessment on biosafety of new breeds;

- Big difference between Vietnam and Exporting countries

in technical standard applicable to exported agricultural

products

© DKSH

Tuan Diep Nguyen

Business Line Manager

Agriculture, Business

Technology – DKSH

Vietnam

• I have 08 years of experience

gained in the Agricultural

Equipment Industry

• Business Line Manager has

gained management experience

at Kubota and Automobile

companies, before joining and

founding Argicultural equipement

business in DKSH TEC in 2012

Personal profile

• Reach total revenue in 2016: 6,2M.

• Managing some key partners such as:

• New Holland, Case IH, Maschio, Fimaks,…

• Key products: Tractors, Sugarcane

Harvester, Forage harvester, implements…

• Industrial Involvement: Rice, Sugarcane,

Dairy & Cattle, Fresh Vegetable, Rubber,

Cassavar,Coffee,…

• Member of FAASC who manages AGR

mechanization’s function (Food, Agri and

Aqua Business Sector Committee)- the

European Chamber of Commerce.

(EuroCham)

• Member of speakers’ team in Food Safety

(Eurocham) – Mechanization topic in 2014.

• CNHI award “The best sale growth in Asia

pacific” in 2013.

• DKSH award – Leadership principle award

in 2015.

• World Bank certification “Enabling the

business of agriculture project” will be

implemented in 60 countries around globe

in 2016, 2017.

© DKSH

Welcome at DKSH in Vietnam

Business Review and Outlook– “Doing Agri - Business In Vietnam”

By Nguyen Diep Tuan/BLM, DKSH Technology Co., Ltd. Vietnam

AGR Business Line Manager

European Chamber Of Commerce In Vietnam - Food Agri & Aqua Business Sector

Committee (FAASC)

Feb, 16th, 2017

Overview of Agri business in Vietnam

© DKSH

Overview of Agri business in Vietnam

Hanoi

Nghe An

Ho Chi Minh City (Saigon)

Ha Tinh

Quang Binh

Gia Lai

Tay Ninh

Dong Nai

Quang Tri

Quang Ngai

Binh Dinh

Dak Lak

Thanh Hoa

Thai Binh

Nam DinhNinh Binh

Phu Tho Quang NinhNorthern Highland Area

Red River Area

Mekong area

Northern Middle Area

Middle Coast Area

Highland Area

Southern East Area

Mekong River Area

© DKSH

• Farmers own big fields by

themselves

• Highest % of mechanization

in nationwide.

• Rich soil condition

Mekong River Area

Strengths (S) Weaknesses (W)

Oppor-

tunities

(O)

• Main crops: rice, fruit

and aqua.

• Rice combine

harvesters, Tractors

(<75Hp) and Rotary

tillers

• Change land policies

• Finance

Threats

(T)

• Import tax and VAT

tax

• Procedure as

followed for

registration and

Quality check

• Crop organization

and import tax & VAT

tax

• European Vietnam Free Trade

Agreement.

• TPP agreement.

• Large fields and flat.

• Climate change, Salt water

• Hydroelectricity

• Excessive levels of certain heavy

metals, antibiotics, crop-protection

products, bacteria or mould

© DKSH

• Sugarcane industry is

growth

• Flat and large fields

Southern East Area


Oppor-

tunities

(O)

• Main crops: Dairy &

Cattle, Sugarcane,

Rubber, Corn,

Cassava and

greenery, pig and

poultry

• Sugarcane harvester,

Tractors (>55Hp),

sub soiler,planters…

• Change land

policies

• Finance

Threats

(T)


tax

• Procedure as

followed for

registration and

Quality check

• Lack of supporting

services

• Apply new technologies such as:

precision farming, GPS,…

• Low mechanization.

• Good opportunities to cooperate local

companies who run AGR businesses.

• Price fluctuation,

• Insufficient infrastructure facilities

• Low return on investment.

• Levels of Antibiotics

© DKSH

• Sugarcane & Dairy

industries are growth

• Rich soil condition.

• Good weather for

animal care

Highland Area


Oppor-

tunities

(O)


Cattle, Sugarcane,

Rubber,pepper, Soyabe

an, Robusta Coffee.


Tractors (>55Hp), sub

soiler,mixers, planters…

• Change land

policies.

• Finance

Threats

(T)

• Import tax and VAT tax

• Procedure as followed

for registration and

Quality check

• Small-scale farming


services

• Fields are not enough

flat for machenization

• Apply new technologies such as:

precision farming, GPS,…



companies who run AGR businesses



• Low return on investment

• Levels of Antibiotics

• The droughts in the Central

Highlands

© DKSH



• Flat fields

Middle Coast Area


Oppor-

tunities

(O)


Cattle, Sugarcane,

Rice and aquaculture

• Rice combine


(Second hand tractors

<75Hp) and Rotary

tillers

• Change land policies.

• Finance

Threats

(T)


tax



Quality check

• Very Small-scale

farming


services

• Very low mechanization.






• Climate change

• Environmental disaster in central

Vietnam

© DKSH



• Good weather for

animal care

Northern Middle Area


Oppor-

tunities

(O)


Cattle, Sugarcane,

Pepper, Corn and

greenery


Tractors (>55Hp), sub

soiler,mixers,

planters…


• Finance

Threats

(T)


tax



Quality check


farming


services

• Not flat enough fields







• Environmental disaster in central

Vietnam

© DKSH

• Flat fields and rich soil

condition

Red River Area


Oppor-

tunities

(O)


Cattle, Rice, Corn and

greenery

• Rice combine


(<75Hp) and Rotary

tillers


• Finance

Threats

(T)


tax



Quality check

• Small-scale farming


services






© DKSH

• Close to China’s

market

Northern Highland Area


Oppor-

tunities

(O)


Cattle, Green Tea,

Fruit, Corn and

greenery


• Finance

Threats

(T)


farming


services

• No mechanization.

• Huge investment if we can do

mechanization in this area

© DKSH

Success Story: Implementation of satellite-based

precision-farming technology for the sugarcane industry

In 2014 the very first satellite-based precision-farming technology was introduced and sold in Vietnam to

our long-standing customer Quang Ngai Sugar Company (QNS): a A8000 Case IH sugarcane harvesting

machine as well as the supporting planting vehicles will be driven by a tailored GPS guidance system to

maximize crop yield and machine efficiency.Sharing success

Challenge

Our customer QNS saw the potential to increase crop yields and harvesting efficiency of their sugar cane.

But they were unsure on what was the right solution of soil preparation, planting, maintenance, harvesting

and after harvesting to their specific need.

Result

New Holland's automated guidance system for tractor planting was successfully tested at QNS in

December 2014. In 2015 a brand new A8000 sugarcane harvester from Case IH will harvest the first crop

planted with satellite-guided technology. They own and manage around 200 tractors (50 New Holland

tractors), 8 sugarcane harvesters (Case IH) and over 200 implements (50% was provided by DKSH)

Approach

First QNS and DKSH analyzed together the details of crop distribution, soil preparation, geographical

spread, harvesting requirements, planting requirements and long-term requirements of QNS. Then, the

best-fitting combination of solutions from New Holland & Case IH's technology were determined and

customized. The project rollout was carefully planned to match the seasonality of QNS's business.

Market

Expansion

Services at work:

Driving the mechanization of agriculture in Vietnam with highest technology in long-term partnerships: that's

market Expansion Services!

Business Line Agricultural Equipment (AGR) Country Snapshots/ Vietnam

© DKSH

Thank you for your attention

DKSH Holding Ltd.

Wiesenstrasse 8, P.O. Box 888, 8034 Zurich, Switzerland

Phone +41 44 386 7272 Fax +41 44 386 7282

www.dksh.com

© DKSH

In and with Asia

Having been truly at home in Asia for 150 years, DKSH has

unparalleled relationships and networks across Asia and an

unmatched depth of knowledge, experience and understanding

© DKSH

Disclaimer

Due care has been used in preparation of this presentation and DKSH makes every effort to

provide accurate and up-to-date information. Nevertheless, this presentation may be subject

to technical inaccuracies, information that is not up-to-date or typographical errors

DKSH does not assume liability for relevance, accuracy and completeness of the information

provided. DKSH reserves the right to change, supplement, or delete some or all of the

information on this presentation without notice

The layout, graphics and other contents in this presentation are protected by copyright law

and should not be reproduced or used without DKSH’s written permission

81

VIET NAM – CONTACTS

AGRICULTURE

Doan Lieu An

Research Manager – Agriculture

The British Business Group Vietnam

25 Le Duan Blvd,

District 1, Ho Chi Minh City

Vietnam

Tel: (+84-8) 3829 8430 Ext: 102

Fax: (+84-8) 3822 5172


AGRITECH

Nguyen Phuong Anh (Ms.)

Commercial Officer - Agritech

British Consulate General HCMC

25 Le Duan Blvd,

District 1, Ho Chi Minh City

Vietnam

Tel: (84) (8) 3825 1380 - 2233

Fax: (84) (8) 3822 1971


For further information, please visit our websites at:

www.gov.uk/world/vietnam

http://bbgv.org/the-business-centre-about.html

OFFICIAL

mailto:[email protected]

mailto:[email protected]

http://www.gov.uk/world/vietnam

http://bbgv.org/the-business-centre-about.html

- >20,000 visitors- UK TAG and 39 UK companies- Networking Reception at British Ambassador’s Residence on 14th- DIT Vietnam representative to support matchmaking activities

OFFICIAL

Department of International Trade

T: +44 (0) 20 7215 5000

E: [email protected]

Find your local International Trade

Adviser

https://www.contactus.ukti.gov.uk/offi

ce-finder

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www.exportingisgreat.gov.uk

Thank you for joining our webinar


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