Domestic and foreign enterprises alike have begun to take a greater interest in the production and distribution of safe food in Vietnam.
Amid growing concerns in Vietnam about unsafe food, many foreign and local firms are exploring opportunities to produce safe food in the country.
The CJ Group from South Korea plans to have a food safety center in Vietnam by 2018 and will work with universities to conduct training courses on food safety and send professionals from South Korea to share knowledge and experience with students.
Vietnam’s FPT Corporation and Japan’s Fujitsu Corporation announced the completion of the FPT-Fujitsu Smart Agriculture Cooperation Center last year, with the aim of applying Japanese high technology to produce fresh agricultural products.
Techna Nutrition Vietnam, a subsidiary of the French-based Techna Group, which produces and supplies nutritional feed for animals and crops, is also preparing to establish a factory to produce organic food in Vietnam.
CEO of CJ Group Chang Bok Shang said that Vietnam’s potential makes it one of the most favorable places to do business.
He predicted there would be an increasing flow of foreign direct investment (FDI) into Vietnam’s food industry because safe food is essential for life. “It is also a sensitive matter so it requires investors have strong experience, understanding and financial background in food,” he said.
Vietnamese businesses have also invested large sums into producing safe food as well as expanding retail chains with fresh food that meets quality standards.
The Hoa Phat Group plans to form a value chain in farming and livestock feed production as well as breeding and distributing food using bio-safety technology. General Director Tran Tuan Duong said that Vietnamese businesses understand the Vietnamese market and consumer habits better than foreign businesses and it was easy for them to build distribution systems around the country.
Mr. Pham Minh Thien, Deputy Director of the Co May Agriculture Company in the Mekong Delta’s Dong Thap province, said the company has decided to invest around $900,000 into projects and a research and development center to introduce more organic agricultural products. The local market needs large enterprises with good reputations in the safe food market in order to provide fresh products to people.
Vingroup, meanwhile, has invested $89.6 million in agriculture to match the growing demand for high-quality produce.
Given the massive investment, Vietnamese food producers will be affected significantly, especially small businesses, said Mr. Nguyen Tien Hung, Director of the Biggreen Safe Food Vietnam Limited Company.
Foreign companies possess advantages as they have good management systems and advanced food quality inspection technology, according to Mr. Nguyen Anh Tuan Director of the Institute of Policy and Strategy for Agriculture and Rural Development (IPSARD).
Large-scale production will help them sell products at competitive prices and many consumers tend to favor foreign brands, Mr. Tuan said in explaining the challenges for Vietnam’s safe food industry.
In order to maintain their position in the industry, Vietnamese enterprises in general need to improve product quality, according to Mr. Van Duc Muoi, General Director of the Vietnam Meat Industries Limited Company (VISSAN).
Vietnamese enterprises should work with each other to establish value chains from production through to packaging and distribution in order to take advantage of low costs and provide opportunities for consumers to have greater access to safe food, he added.
Mr. Hung from Biggreen said that the government and enterprises need to promote the advertising of domestic products in terms of quality and origin to attract consumers’ attention and advise them on availability of products.
The government and relevant ministries should also encourage domestic enterprises to invest in safe food by providing loans at low interest rates or exempting them from corporate income tax.
The Ministry of Agriculture and Rural Development recently organized a “Green Outlets - Safe Farm Produce” program, which aims to raise confidence among consumers in food safety and encourage safe food production and distribution.