Tea industry brews up $1 billion plan

Could you tell me about the tea export turnover in 2008?

The tea industry has encountered difficulties in exports due to the global economic crisis. High inflation has led consumers in many countries to curb their spending. Thus the volume of Vietnamese tea exports (not including small shipments) may hit only 110,000 tonnes this year, just equal to last year’s figure. However, this year’s tea export value is estimated to reach about $150 million, $6 million higher than the previous year’s turnover. Even though that isn’t a high figure, I still see it as a good sign for the industry as tea quality has been improved, resulting in higher export prices. The tea sector has targeted an increase in export turnover by improving the quality of its products.

What is the biggest barrier to local tea processing enterprises in the current difficult economic context?

The country is home to 700 tea processing enterprises and the majority of them are small- and medium-sized. Capital shortages are seen as the biggest difficulty for these firms. Due to a lack of mortgaged assets, they often fail to obtain loans from banks. The association has petitioned the Government to extend loan terms and reduce interest rates to assist tea processors in accessing bank loans to have capital for production and technical innovation.

In addition to capital to invest in production and technology, the association has also called for State investment in raw materials, transport, irrigation and electric systems.

In my opinion, the difficult situation will not last long because the world economy will be improved sooner or later, thus tea processing enterprises should improve their internal capacity to catch future export opportunities. In addition to foreign markets, enterprises should also increase their revenue from the domestic market by studying the taste of local consumers.

From your point of view, can the tea industry meet its target of $1 billion in revenue by 2020, with $800-900 million coming from exports?

This is a big goal, but I don’t think it’s impossible. Viet Nam’s land and climate make it uniquely suitable for the development of high-quality tea. It is the fifth largest country in terms of tea output and exports in the world, and presently 35 provinces in the country, covering 128,000ha, are involved in tea production. Vietnamese tea is marketed in about 100 countries and territories. The national trademark, CheViet has been registered in 73 countries and regions.

But in order to reach the goal, we need a specific plan. The top priority will be given to improving production capacity and quality of tea produced, and organising training courses on tea cultivation techniques for farmers.

Focusing on technical innovation and diversifying tea products are also necessary. By 2020, the tea sector aims to increase the quantity of processed tea to 50 per cent, from the current figure of 10 per cent of total annual tea exports.

I think personnel training is also an important factor in the tea sector, as it is facing a serious shortage of skilled labour. Thus, the sector really needs financial assistance from the Government.

Furthermore, the sector must continue developing present markets including Pakistan, Taiwan, Russia, Germany, mainland China, Indonesia, Poland, the United Arab Emirates, Britain and the Netherlands, while seeking additional markets.

The association has also submitted 12 trade promotion plans to the Ministry of Industry and Trade to join the National Trade Promotion Programme in 2009. If approved, that would be a good opportunity for the tea sector to continue advertising it trademark and products in the global market. Introducing the national tea brand name via international trade fairs and exhibitions and Vietnamese commercial offices overseas is also a good way for the sector to increase exports.