Appetite for safe food opens growing niche

David Lennarz, vice president of the US’ Registrar Corp, which assists businesses with US Food and Drug Administration compliance, told VIR that many US companies were assessing prospects for safe food production in Vietnam, especially as the local market was currently inundated with unsafe food.

“Many American firms are tending to shift their production from China - where labour costs are rising - to other low-cost markets like Vietnam, which has great potential in terms of their food and foodstuff production,” Lennarz said.

Registrar Corp has been operating in Vietnam since 2005, and has already worked with 400 local companies in collaboration with US partners to produce high-quality products for export to the US as well as for consumption in Vietnam.

At present, Registrar Corp is actively seeking to expand its operations in Vietnam.

Nguyen Vu Loc, CEO of locally-owned Westfood, told VIR that many foreign firms were turning Vietnam’s unclean food problems into an opportunity to invest in safe food production chains here.

Loc added that the demand for safe food among Vietnam’s population of 93 million was expanding, and income had improved. “This helps foreign firms strengthen their confidence that they will succeed in this market,” Loc said.

Last week, 13 Canadian enterprises met with several Vietnamese pork importers, processors, and end-users to discuss the introduction of Canadian pork products, and finding opportunities for co-operation via joint ventures or business contracts.

Canadian Ambassador David Devine said that “The impressive growth of 230% in Canadian pork exports to Vietnam in 2015 confirms the high potential of the Vietnamese market for Canadian pork products, and also the confidence that Vietnamese clients have in the quality and safety of Canadian products.”

In another case, despite failing to acquire a 14% strategic stake in Vietnam’s state-owned food processing  company Vissan,  the Republic of Korea-based food and bio-business holding company CJ Cheil Jedang was said to be planning to invest an additional US$500 million into the country via direct investments and mergers and acquisitions of food firms.

The firm already owns a farm and four processing plants in Vietnam in addition to its retail division. The US$500 million investment will raise the company’s total investment capital in Vietnam to US$900 million.

In addition, France’s Techna Group, which specialized in the improvement of animal nutrition as well as plant nutrition, is considering Vietnam as a strategic location for its ASEAN expansion plan.

It opened Techna Nutrition Vietnam in 2012 and is planning to build a factory in the country in 2018.

Currently, all of the firm’s products in Vietnam are imported directly from France. 

Acknowledging the use of banned substances in Vietnam’s agricultural produce, and a livestock diet that reduces the competitiveness of Vietnam’s poultry and pork sector, Techna is offering its natural ingredients to help farmers increase livestock performance and reduce dependence on antibiotics.

In Vietnam, the prevalence of unsafe food has increased alarmingly, prompting the government to trigger campaigns to remedy the situation.