The Netherlands and Vietnam are both world players in the export of agricultural products. VIR’s Hanh Tung talks with Simon van der Burg, the Netherlands consul-general in Ho Chi Minh City, on the business opportunities offered by Vietnam’s agriculture and food sector to Dutch firms.
Dutch agriculture is renowned for its high-quality know-how and has a good international reputation concerning food safety and sustainable production. There are examples of Dutch success in Vietnam’s agriculture sector like FrieslandCampina, De Heus, Dalat Hasfarm or Nedcoffee. What are the reasons behind their success?
The Dutch Prime Minister Mark Rutte came for a visit to Vietnam on the 16th and 17th June 2014. He was accompanied by Minister for Agriculture Sharon Dijksma and a large Dutch business delegation. A key milestone of the visit was the signing of a Strategic Partnership Agreement on agriculture and food security between the Netherlands and Vietnam.
Minister Sharon Dijksma attended the Forum on Horticultural Cooperation and Development together with the Dutch business delegation. During the Forum, Fresh Studio Director of Marketing and Business Development, Sigrid Wertheim-Heck, delivered a presentation entitled ‘Supplying the market of Tomorrow’ with insights on Vietnam’s horticulture.
Vietnam is challenged by major climate change issues, dependency on imported horticultural products during off season, concerns about food safety due to agro-chemical residue, micro-nutrition deficiencies, and the low level of technology in horticulture which results in unsustainable development. However, there are opportunities yet to be realized including a very large domestic market (90 million people), diversified climate conditions of production areas, and farmers’ willingness to adapt as long as they have access to technologies, training and finance. Vietnam is already an agriculture powerhouse for a large range of commodities, being in the top 3 of largest exporters in the world for products such as coffee, rice, seafood, cashew nuts, pepper etc. With the Vietnamese entrepreneurial spirit this can also be achieved in horticulture.
A consortium consisting out of Koppert, Rijk Zwaan, BVB Substrates, Svenson, Priva, Yara, Rabobank, Wageningen UR and coordinated by Fresh Studio, have brought their resources together to speed up the ambition of Vietnam to become a key supplier of fresh produce for urban Asia. The consortium will implement an innovative greenhouse development program in the Central Highlands of Vietnam. Supported by the Transition Facilty of the Dutch Ministry of Economic Affairs, the consortium aims to accelerate the adoption of basic climate controlled plastic greenhouses by local farmers. By offering local farmers all knowledge, technologies, financing through local banks, and linkages to the market, an important step is made to make the 30,000 hectare vegetable production in the Central Highlands more productive and more sustainable.
^ Visiting modern supermarkets during the tour organized by Fresh Studio
As part of the visit programme, Fresh Studio coordinated a tour to modern supermarkets and traditional wet markets for the Dutch delegation. The tour provided the delegates with real life experience of Vietnamese urban retail and wholesale channels and an understanding of the retail modernization process.
To introduce Zespri® SunGold kiwifruits to potential business customers, Fresh Studio organized two launching events in HCMC and Hanoi. These kick-offs are part of the marketing activities for New Zealand’s kiwifruit season 2014.
Zespri® SunGold is considered the strategic product of New Zealand kiwifruit under the brand name Zespri from this year in Vietnam. It has been developed based on the techniques of natural hybridization between different varieties of kiwifruit. The rich sources of nutrients like Vitamin C, fiber, folate and potassium make Zespri® SunGold a “Super fruit’.
The launching events occurred on the first two weeks of June – as the start of the Zespri kiwifruit season. It attracted participants from all levels of sales channels ranging from importers, fruit wholesalers, supermarkets, shop owners and press. The conference provided the participants with information about Zespri company, Zespri® SunGold, nutritional facts, and techniques to preserve and prepare the new variety for retail. The information presented can help business customers become more confident in successfully selling Zespri® SunGold.
^ Zespri® SunGold launching event in HCMC
Since 2009, Fresh Studio has cooperated closely with Zespri International Ltd. in managing the brands and contributed essentially to the thriving growth of kiwifruit consumption in Vietnam. Following the success of Zespri® Green and Zespri® Gold, Zespri® SunGold is on its way to capture the Vietnamese market.
Nearly 50% of Hanoi’s urban population lives on 4 USD or less a day. This group represents a food value of circa 5 million USD/day. Despite their demand for safe and nutritious food, this economy of scale is not yet targeted with fresh food quality improvements.
Food that carries formal food safety certification by government authorities is mainly traded at registered and certified food safety retail outlets, targeting middle and upper income classes. Even though Hanoi’s lower income residents are explicitly demanding for safe and healthy foods, they are generally excluded from these channels.
The exclusion of lower income consumers from more controlled formal food provision systems urges innovative approaches.
The Ministry of Agriculture and Rural Development (MARD) has held a conference on PPP (Public Private Partnership) investment in agriculture which shows its high interest in the investment mode. Vietnam is one of the 11 countries in the world which applies the PPP model in agricultural projects on a trial basis.
Innovative public private partnerships are a key instrument to improve food security and agricultural sustainability in Vietnam. The model has attracted the participation of 15 trans-national groups, including Metro Cash & Carry, Unilever, Nestle, Syngenta and Fresh Studio.
Fresh Studio has been involved in several PPP projects, amongst others to build up a fish production chain meeting international standards which supports the penetration of Vietnamese seafood products in retail chains.
Fresh Studio is also committed to developing business partnerships to improve the safety and quality of vegetables, while benefiting farmers. In 2013, Fresh Studio organized a conference, titled ‘Supplying the market of tomorrow’. This event took attendees on a one-day journey into the future of safe, healthy and high value food in Vietnam and offered a platform for (inter)national businesses to meet with key stakeholders from the public sector including Vietnamese government, foreign embassies, NGOs, academia, media and consumers.
The successful results of agriculture projects implemented under the mode of PPP show great opportunities for the participation of more foreign and domestic companies to realize the sustainable development of five industries: tea, coffee, vegetables, fisheries and commodities.