VietNamNet Bridge - Though some startups in organic agriculture have successfully called for capital, it is still difficult for many of them to seek funding. 


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The demand for organic food is high in Vietnam


SWOF, belonging to the US-based SEAF, last week committed to invest in Organica Investment JSC, which owns Organica, an organic farm produce distribution chain.

Declining to reveal the exact amount of investment, Pham Phuong Thao, Organica’s CEO, said SWOF bought 30 percent of Organica shares and committed a long-term loan to help Organica find sufficient capital to implement its business plan.

With new financial resources, Organica will develop more farms, buy more goods and more effectively exploit existing resources. The investor will also help upgrade its governance skills and develop markets.

Organica started in 2013 with one organic food shop, covering an area of 20 square meters on Nguyen Dinh Chieu street in HCM City. Now, Organica has five shops in HCM City, Hanoi and Da Nang, and 10 directly and indirectly invested farms which grow vegetables and fruits in accordance with US and EU standards.

Though some startups in organic agriculture have successfully called for capital, it is still difficult for many of them to seek funding. 

Thao said the company had to undergo a long tough period because of the barriers that prevented it from accessing bank loans.

At another company, Hoa Nang, organic rice production began reaping fruit after receiving VND10 billion worth of investment from Louis Nguyen, chair of Saigon Asset Management (SAM).

Lam Anh Tu, director of Hoa Nang Farm Produce, said the company harvested 300 tons of rice last crop, an increase of 50 percent over the last year thanks to higher yield and expanded cultivated area.

“We now focus on production because we don’t have to spend as much time seeking capital. The investor helps manage the cash flow and brings new clients,” Tu said.

Still unable to make profit, the project on organic farm produce and tourism development by Mang Den Xanh JSC in Kon Tum province has raised funds of VND1.5 billion, equal to 50 percent of the company’s shares.

According to Mang Den Xanh’s director, Vo Lam Vu, the company plans to obtain a certificate on organic production in accordance with Vietnamese standards in 2019 and begin receiving tourists.

Vu said investors are hesitant to invest in agriculture projects because of the high risks and required long-term investments. 

Vo Minh Khai, general director of Vien Phu Trade & Production JSC, said few investors pour money into agriculture and most pour money into material collection, processing and distribution, rather than production.

However, both Tu and Khai said investors have recently shown more interest in organic agriculture because of the increased demand for the products.


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