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Vietnam: Agro-forestry sector harvests foreign investment

Published on 5 October, 2006, Last updated at 08:11 GMT

Vietnam News

Hanoi: The nation has attracted 1,100 foreign-invested projects in agro-forestry with a total registered capital of about US$5.2 billion, according to the director of the Ministry of Agriculture and Rural Development’s International Co-operation Department, Le Van Minh.

At a conference held recently in Ha Noi, Minh said over 800 of these projects are were still active, representing total registered capital of $3.9 billion.

Foreign investors hailed from 42 countries and territories, he noted, including France, the US, Singapore, South Korea and Taiwan.

Since 1995, foreign-invested projects in agro-forestry had mostly focused on the timber and wood processing industries, sugarcane cultivation and sugar processing, animal feed, and seafood.

Reforestation project had accounted for a full 22.6 per cent of foreign investment in the sector, Minh said, because timber processing met both domestic raw material needs and demand in export markets. The 420 foreign-invested projects in this area represented a total capital of $1.3 billion.

About 180 projects nationwide were in cultivation or food processing industries, representing a total capital of $1.3 billion.

The southern province of Binh Duong had licensed the highest number of projects nationwide, with 104, while HCM City ranked second with 90 projects, and Dong Nai third with 52 projects.

Except some large-scale sugarcane, reforestation, and livestock breeding projects, most of the other projects were small- and medium-sized enterprises attached to local areas.

The agriculture sector is not largely attractive to investors, said experts at the conference. Eighty-eight projects in livestock breeding and animal feed processing were invested at $11 million each, while cultivation and food processing projects were invested at only about $7 million each.

Foreign investment in agriculture has poured capital into developing rural economies, the conference heard, creating more income for both local farmers and the State budget.

Leading sources of investment in the sector were Thailand, mainland China, the Netherlands, France, Singapore, and Taiwan. But all tended to invest only in areas with the most favourable natural conditions and infrastructure, open investment policies, and major consumer markets nearby, such as in HCM City, Dong Nai and Binh Duong and some provinces along the Hong (Red) River.

Eighty per cent of foreign-invested projects in animal feed processing, for instance,were located in the southeastern area or the Red River Delta, while central region and mountainous areas saw no similar projects, said Dr Nguyen Dang Vang, head of the ministry’s Livestock Breeding Department.

Similarly, there were 210 foreign-invested projects nationally in the wood products industry, but 147 of them were in the southeast area and only 39 in the northern region, most of relatively small scale, said Dr Nguyen Ton Quyen, secretary general of the Wood and Forestry Products Association.

Poor infrastructure continued to limit the scale of agricultural production, and complex provincial administrative procedures were also viewed as a hindrance to foreign investment, said some participants at the conference.

Many foreign-invested projects were generating losses or being slowly implemented, Minh noted.

The Ministry of Agriculture and Rural Development was completing a plan to attract foreign investment through 2010 and beyond, said Minh, a plan that aimed to maintain a rapid and stable growth rate in the agricultural sector.

The plan would focus on investment in bio-technology to create new crop strains; investment in food processing and post -harvest technology; and investment in building technological infrastructure for agro-forestry and fisheries product processing


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