VietNamNet Bridge - Big companies in steel, real estate and securities sectors have announced investments in agriculture projects, but they remain quiet about their profits from the projects.

The financial report of Hoa Phat group, established as a steel manufacturer, showed that its net revenue from agriculture reached VND1.395 trillion in 2016, an increase of 4.7 percent compared with 2015. 

The figure is modest compared with the group’s total revenue of VND33 trillion.

When joining the agriculture sector, Hoa Phat planned to follow the 3F (feed, farm, food) model. 

Big companies in steel, real estate and securities sectors have announced investments in agriculture projects, but they remain quiet about their profits from the projects.

After opening the animal feed plant in Hung Yen in April 2016, it set up another animal feed plant in Dong Nai in February 2017. The third plant is under construction, expected to become operational in the first quarter of 2018.

Once two more plants are built as planned, Hoa Phat would have sales of 1 million tons, which would make it one of the top 10 animal feed manufacturers in Vietnam by 2020 with 5 percent of market share.

It is also moving ahead with the plan to import pigs, cows and fowl and develop the first chicken breeder farm in Phu Tho.

However, Hoa Phat’s ambitious plan implementation is meeting big challenges as the live pork price has dropped dramatically to a historic low at VND15,000 per kilo.

Vingroup, a powerful real estate conglomerate with financial capability, has also jumped into the agriculture sector with the establishment of VinEco.

In October 2015, VinEco launched the first batch of safe vegetables into the market, six months after Vingroup announced investments in agriculture.

The 2016 annual report showed that VinEco had 14 farms and 2 preliminarily processed centers with the land fund of 2,000 hectares.

Announcing the huge investments in agriculture, but Vingroup has not publicized the revenue from the field. Agriculture, in the group’s finance report, was listed in ‘other business fields’ which brought 3 percent of the group’s revenue.

At the 2017 shareholders’ meeting, Nguyen Khac Hai, CEO of PAN Group, said that the total net revenue reached VND2.753 trillion in 2016 and the post-tax profit was VND336 billion, an increase of 20 percent over the same period last year. 

PAN Group has two subsidiaries in agriculture – Saladbowl and NSC. The latter made up 48 percent of the group’s revenue and 50 percent profit.

Declining to say more about the new investment field, Nguyen Duy Hung, president of PAN Group, who is called the ‘securities tycoon’, said the 33 percent growth rate in agriculture in the context of the climate change was an encouraging result.

The government, in an effort to encourage investments in hi-tech agriculture, has announced the launch of the credit package worth VND100 trillion for investors in the field.

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