| HANOI, July 28
HANOI, July 28 A steelmaker turning to pigs and
animal feed, a property developer raising cows, a stockbroker
milling rice and a real-estate-to-retail billionaire growing
fruit and vegetables.
Three decades after Vietnam started moving away from a
socialist-led farm economy towards manufacturing of big-brand
textiles and electronics, some of its top firms are carving out
opportunities in its $37 billion agriculture and seafood sector
and looking to expand overseas, helped by free trade pacts.
"We'll have global food shortages by 2050. If we invest
fundamentally and correctly, this market is infinite," said
Nguyen Duy Hung, chairman of Vietnam's top brokerage, Saigon
Securities Incorp, who has a side business he's
expanding into rice, seafood and supermarket produce.
Vietnam is among the world's top exporters of rice, coffee,
cashew nuts, seafood, pepper and rubber and it shipped $24.5
billion of farm and fisheries produce last year.
But the World Bank says the value of its agribusiness is
just 1.2 times that of its primary agriculture, compared with
2.7 times in South Korea. And the country still relies on
billions of dollars of foodstuff imports.
Hence the unlikely interest in food from industrial firms
such as steelmaker Hoa Phat Group, which has converted
its minerals unit to livestock and animal feed.
It has built a new feed plant with annual capacity of
300,000 tonnes, aiming for 1 million tonnes, and wants to be
raising a million pigs a year by 2020.
"Although this new sector is extremely competitive, just as
much as the steel industry, we firmly believe we will be
successful," CEO Tran Tuan Duong told shareholders recently.
Vietnam's only billionaire, Pham Nhat Vuong of Vingroup
, is piling into private schools, hospitals and shopping
malls. But his latest move is a little off-piste - a $91 million
investment in growing fruit and vegetables.
And on the home page of real estate firm Hoang Anh Gia Lai
(HAGL), it's grazing cows rather than condominiums that
meet the eye: it has just listed a cattle and rubber unit
with a market value of $1.1 billion, bigger than the
HAGL predicts nearly half the group's revenue this year will
come from cows. It wants to tap milk demand that has grown 36
times over in the past quarter-century, satisfied in part by
imports worth $1 billion a year.
It is also investing in cattle to meet growing demand for
beef: imports from Australia have surged 52 times in the past
two years to 181,000 cows in 2014.
HUNGER FOR FEED
That means potential in animal feed, too, currently supplied
42 percent by imports. It's a business sector worth $7 billion
but dominated by foreign players such as Thai giant CP Group,
whose Vietnamese unit has about a fifth of the market.
Vietnam is aggressively pursuing Free Trade Agreements,
another factor attracting local tycoons to the farm sector, even
if it means more competition at home from overseas players.
Agreements were reached recently with South Korea and the
Russian-led Eurasian Economic Union and deals are edging closer
with the European Union and the Trans-Pacific Partnership, which
will cover 12 countries with a combined GDP of $28 trillion,
among them Australia, Japan and the United States, Vietnam's top
The government "hopes to accompany businesses during the
industrialisation and modernisation of agriculture and the rural
sector of our country", Deputy Prime Minister Hoang Trung Hai
told a recent conference on private investment in agriculture.
It is also considering tax incentives for foreign operators
in the sector if they develop human resources, infrastructure
and larger fields to improve productivity, quality and
Just 1 percent of Vietnam's registered firms are in the
agricultural sector and nine-tenths of those are small and
"There are new opportunities for consolidating smallholder
production, adding value and reaching new markets that
smallholder farmers cannot realise individually," said Chris
Jackson, a rural development specialist with the World Bank in
(Editing by Martin Petty and Alan Raybould)