Vietnam to expand banana farming for China export
In this article (5)
A Vietnamese agriculture company, Hoang Anh Gia Lai Agriculture Jsc, is set to invest in another 5,000 hectares of land in Cambodia to grow bananas for export to China.
It will invest VND976 billion ($42 million) in the project, the company said in a recent statement.
Most of the bananas will be exported to China by ship or road. They will fetch VND22,000-23,000 (95-99 cents) per kilogram from September to March and VND13,000-14,000 (56-60 cents) at other times.
While China has a demand for 15 million tons of bananas a year, the company has only been supplying 240,000 tons, Doan Nguyen Duc, CEO of Hoang Anh Gia Lai (HAGL) Agrico, said.
But to reduce its excessive reliance on the Chinese market, Duc is also hoping to shift 20 percent of the company’s banana exports to South Korea and Japan.
It expects to harvest over 106,000 tons of bananas and earn revenues of around VND1.7 trillion ($73 million) and VND983 billion ($42 million) in gross profit this year.
The company already possesses 13,500 ha of farmlands in Vietnam, Laos and Cambodia. It is also a major producer and exporter of dragon fruit and chili.
HAGL used to be a leading property developer in Vietnam, but restructured in 2010 to focus on rubber and livestock farming.
HAGL Agrico has been growing fruits since 2016, and last year its passion fruit, banana, chili, and dragon fruit crops fetched revenues of VND1.6 trillion ($71 million), accounting for around 49 percent of HAGL’s total revenues.
This year, the firm expects sales of VND3.7 trillion ($164.4 million) and gross profits of VND1.67 trillion ($74.2 million).
Questions & Answers
Q.What is the primary motivation for Hoang Anh Gia Lai Agrico to expand its banana farming operations?
What is the primary motivation for Hoang Anh Gia Lai Agrico to expand its banana farming operations?
The company aims to capitalise on China's substantial demand for bananas, which is currently 15 million tons annually. Despite this, the company has only been supplying 240,000 tons.
Q.How will the company diversify its export markets to reduce its dependence on China?
How will the company diversify its export markets to reduce its dependence on China?
To reduce its reliance on the Chinese market, the company's CEO is planning to redirect 20 percent of its banana exports to South Korea and Japan.
Q.What is the projected revenue and profit for Hoang Anh Gia Lai Agrico this year?
What is the projected revenue and profit for Hoang Anh Gia Lai Agrico this year?
The firm expects total sales of VND3.7 trillion ($164.4 million) and a gross profit of VND1.67 trillion ($74.2 million) this year, encompassing all its operations.
Q.What was the previous business focus of Hoang Anh Gia Lai before its current agricultural ventures?
What was the previous business focus of Hoang Anh Gia Lai before its current agricultural ventures?
Hoang Anh Gia Lai was formerly a leading property developer in Vietnam. It underwent a restructuring in 2010 to concentrate on rubber and livestock farming before moving into fruit cultivation.