FDI firms set up links with farmers
Last week, Nestle began operation of an US$80 million facility in the southern province of Dong Nai’s Amata Industrial Park, producing decaffeinated coffee beans for use in Nestle factories all around the world.
This facility is the second phase of the Nestle Tri An factory. Having opened in 2013, the factory is a key part of the global Nescafe Plan that Nestle has been implementing in Vietnam since 2011.
Under this plan, the company is increasing its direct purchases of coffee from farmers and providing them with technical support.
Not only does this help the farmers, it also gives Nestle a stable source of input that is of a consistent quality.
As part of the Nescafe Plan project, Nestle is co-operating with the Western Highlands Agriculture and Forestry Science Institute (WASI) to replant old coffee trees. The group also joined a public-private partnership project with the Ministry of Agriculture and Rural Development (MARD) to raise the efficiency of coffee planting by applying good practices.
“It’s not just about the quantity and quality, we want to increase the sustainability of coffee planting in Vietnam by using less water and less fertilizer, and thus improve the whole value chain of the Vietnamese coffee sector,” said Ganesan Ampalavanar, Nestle Vietnam’s managing director.
In 2011, Nestle had 300 recipient farmers who took 76,000 seedlings. By 2014, the number of recipient farmers rose to 9,497, with four million seedlings being planted.
Nestcafe Plan announced that it would provide other four million seedlings to farmers in the Central Highlands in 2015, bringing the total up to 11 million.
“As our coffee business grows, we need more coffee beans. It’s in our interest to have a sustainable farming model. But by increasing the output of the farmers, we increase their incomes also. Nestle believes we have to create value for the shareholders and the society at the same time in order to be profitable and sustainable in the long term,” said Nandu Nandkishore, Nestle’s executive vice president in charge of Zone Asia, Oceania and Africa.
Meanwhile, Unilever started a partnership with the MARD in 2012 that has helped Vietnam’s designated tea growers and processors to achieve improved quality and competitiveness.
The initiative is aimed at helping Vietnam increase its export of black tea to Unilever. The multi-national company has set a target of black tea procurement from Vietnam of 25,000-30,000 tonnes of Rainforest Alliance certificated sustainable tea by 2015.
In 2007, Metro Cash & Carry Vietnam started providing support for vegetable and seafood growers to help them meet the Metro requirements. However, since 2013, Metro has been helping both agricultural and aquacultural farmers upgrade to the Viet-GAP standards.
