Lotte eyes US$250-million coffee project
Dinh Van Khiet, vice chairman of Daklak Province, revealed the project at a recent coffee seminar in the biggest coffee producing province of Vietnam.
Khiet said Lotte wants 4,000-5,000 hectares of land to plant coffee and build a processing factory in line with its own standards. This condition makes it hard for the province to meet though it has focused much on calling for investments in the local coffee industry in the past years.
“It is not easy for a local government to meet such a requirement and thus we have reported the case to the Prime Minister. The project is still under consideration,” Khiet said.
If approval is forthcoming, the South Korean group will turn out coffee products with high added value like canned coffee on the market, Khiet said.
South Korea is one of the major importers of Vietnam’s coffee but coffee exports to this northeast Asian market have dropped considerably in recent years.
Vietnam’s coffee exports to South Korea reached over US$80 million five years ago but plunged to around US$60 million last year. The figure might drop further this year, according to Dr. Phan The Cong from Vietnam University of Commerce.
If the project of Lotte is materialized, the shipments of Vietnamese goods in general and coffee in particular to South Korea could increase considerably.
Figures of the Ministry of Agriculture and Rural Development showed Vietnam exported 242,000 tons of coffee worth a combined US$511 million in the first two months of this year, down 25% in volume and 16.4% in value compared to the same period last year.
Vietnam earned US$3.62 billion from exporting 1.73 million tons of coffee in 2014, up over 33% in volume and more than 32% in value year-on-year. Germany and the United States were among the top importers of Vietnamese coffee last year, according to the Ministry of Agriculture and Rural Development.
Lotte Group has recently stolen the limelight for its hefty investments in various sectors in Vietnam, including hotel, food, supermarket, construction, home shopping and entertainment.
In the property sector, Lotte has acquired a majority stake at the joint venture which owns and operates the commercial, office and apartment complex Diamond Plaza, which had an initial investment of some US$60 million, in HCMC’s District 1.
Lotte holds a 70% stake at the five-star, 283-room Lotte Legend Saigon on Ton Duc Thang Street in downtown HCMC. The group and its Japanese partners are working on the Eco Smart City project worth US$2 billion in Thu Thiem New Urban Area in District 2.
