VIETNAM 3 major investments in the Fruits & Vegetables Segment in Vietnam May 2021
From April to May 2021, Vietnam’s fruit and vegetable industry saw 3 major investments to develop processing plants with a combined production capacity of 80,000 tonnes per year.
Latest investor in this segment is Louis Holdings JSC which started the construction of a plant in southern Long An province in early May with a total investment of Dong 250 billion (US$10.78 million). The plant is expected to supply 15,000-20,000 tonnes of products, and is expected to bring sales revenue of up to Dong 1 trillion (US$43 million) annually once operational in July 2021.
Earlier in April, Binh Duong-based Asia Foods Corporation invested Dong 60 billion (US$2.6 million) in a plant with an annual capacity of 8,500 tonnes in northern Lao Cai province. Its planned production include 4,600 tonnes of canned pineapples, 1,600 tonnes of concentrated pineapple juice, 1,000 tonnes of sweet corn, and 250 tonnes of fruit-veggie per year. Asia Foods had already exported 40 tonnes of canned pineapple to Europe prior to the plant inauguration as it seeks to penetrate deeper into the lucrative Europe, US and Russian markets.
Meanwhile, B’ao Food Company Limited, which is based in the Central Highlands province of Lam Dong, also kicked off during the same time the construction of a fruit-veggie-tuber processing plant with an annual capacity of 50,000 tonnes of products.
The fruits and vegetables segment have attracted strong investments over the past years. From 2017 to 2019, major domestic firms like TH Group, Nafoods Group JSC, Dong Giao Foodstuff Export JSC (Doveco), Lavifood JSC, and Vina T&T Import-Export Service Co. Ltd. (Vina T&T) had constructed 8 plants with a total investment of Dong 6.15 trillion (US$264.5 million) and a combined annual capacity of 180,000 tonnes. In 2020, Doveco injected Dong 400 billion (US$17.2 million) into another plant in northern Son La province with an annual capacity of 50,000 tonnes. Lavifood also planned to invest Dong 1 trillion (US$43 million) in a processing complex in Lam Dong province.
Vietnam fruit and vegetable processing sector is expected to fulfil its 2030 target much earlier i.e. to attract investment in 50-60 new facilities and doubling processing capacity to 2 million tonnes per year by 2021 or 2022 the latest.
In 2020, Vietnam had about 2 million hectares for vegetables and fruits farming, including more than 1 million hectares of fruit trees that produce over 12 million tonnes a year, and up to 25 million tonnes if include both vegetables and fruits. The country currently has about 145 large-scale fruit and vegetable processors with a total designed capacity of 800,000 tonnes of products a year. The country’s fruit and vegetable export is expected to grow by 5-10% year on year to US$3.5 billion approximately in 2021.
To speed the development of this industry, the government is also promoting industry players to change their production methods and improve production quality in alignment with global sustainable goal. There is also a growing shift towards organic fruits and vegetables which is forecast to grow at an impressive 9% annually from 2019 to 2024.
Vietnamese and international standard systems/regulations, the EU-Vietnam Free Trade Agreement (EVFTA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) show the importance of environmental standards and regulations in fruit and vegetable processing for national and international trade chains. Sustainable, ecological, safe and organic vegetable and fruit production, climate-adaptive production, circular economy and green economy are becoming global megatrends, as such corporate social responsibility to the environment is widely recognised as one of the major production and business standards for enterprises. When domestic enterprises achieve certifications and further build up their brand images, overseas importers are willing pay the extra premium to the normal selling prices
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