Vietnam can produce from 3.5 to 5 tons of pepper per hectare annually, according to research from Olam, far ahead of India and Indonesia, where each hectare only gives 0.5 to 1 ton of product.
Olam International Agricultural Trade Corporation based in Singapore has identified Vietnam as a center for exporting goods to China. Olam bought a plot of land in the central region in 2016, built plantations and started planting resistant varieties with automatically adjusted temperature, humidity and water.
The company will harvest the first crop next year, with a yield of up to 2,000 tons a year by 2024. Crops are shipped from the production plant in southern Dong Nai. The final product will be exported around the world.
Vietnam accounts for 40% of global pepper production. The climate and soil fertility are suitable for growing pepper, so the Government considers it a strategic export.
Olam began trading Vietnamese pepper in 2004, expanded its sterilization and preliminary processing stages in 2008, and started direct production two years later.
The company also said it would build a current double capacity pepper plant next May. They will also ensure the supply of raw materials from plantations owned by them.
Olam – a partner of 67 countries around the world – chose Vietnam as the center for development projects in Asia due to its high labor skills. Hiring workers will boost technology development, improve labor productivity.
Vietnam can produce from 3.5 to 5 tons of pepper per hectare annually, according to research from Olam, far ahead of India and Indonesia, where each hectare only gives 0.5 to 1 ton of product.
The productivity of coffee and other agricultural products in Vietnam is also superior to competitors.
“Farmers in other countries are mostly interested in the domestic market,” said Olam head of Vietnam Amit Verma. “Vietnamese farmers are the opposite, always interested in the international market, even want to know the trend in the London market. Cashew production facilities are also facing favorable conditions due to skilled human resources, ”Verma added.
By joining ASEAN, Vietnamese agricultural products can be exported tax-free to member countries. That has attracted giant Nestle to start producing instant coffee last summer.
Charoen Pokphand Foods, the jewel of Thailand's largest conglomerate Charoen Pokphand Group, will expand its chicken processing facility to Vietnam. CP Foods will also change from focusing on domestic operations to export.
In 2017, Olam opened an almond processing factory in Dong Nai province, importing clean raw materials from farms in the US and selling them to China. But the trade war has increased tariffs on goods from the US, causing businesses to shift supply to Australia.
Olam aggressively exploits global export and production centers to flexibly adapt to changing market conditions. In Vietnam alone, this business has up to 22 plantations and processing facilities. It also employs approximately 5,000 people and aims to grow by 30% by 2021.
The group is working to expand profitable businesses, such as spice production for local restaurants.
According to CafeF
