African cashew producers have decided that it is time to follow Vietnam’s example and strive to export processed products instead of raw materials, says a report in the farm industry newspaper Nong Nghiep. The Africans are probably right, but this is really bad news for Vietnam, because Africa is a principal supplier of raw cashews to Vietnamese processing plants
Though the number of cashew nut processing plants has been increasing in Vietnam, domestic nut production has been decreasing. This has forced Vietnamese cashew processors to rely on imported nuts.
For many years, Vietnamese processors have had to import 40 percent of the raw nuts needed from Africa, or about 300,000 tonnes, worth $180 million a year. The figure is expected to increase in coming years, because Vietnamese farmers have chopped down cashew plants to grow rubber, coffee and other more profitable crops.
Where will Vietnam get raw nuts?
Some 14 African nations grow and export cashew nuts. In East Africa about 25 percent of the production is processed locally, but in West Africa the processing rate is only five to ten percent. These countries, members of the African Cashew Alliance and with advisory assistance from the Gates Foundation (US), are now making serious plans to boost local processing capability.
Nong Nghiep comments that the most practical way for the Vietnamese cashew industry to avoid being squeezed would be to make direct investments in Africa. There Vietnamese enterprises could do preliminary processing, then export semi-processed nuts to Vietnam, where Vietnamese processing plants could make finished products to be launched into the world market.
In other words, the Vietnamese cashew industry would imitate many industries in advanced countries by ‘going up the value chain.’ They would make finished products and get higher added value instead of making semi-processed products as at present.
However, Vietnamese businessmen hesitate to invest in African facilities. A problem lies in the fact that Vietnamese processors are now only halfway up the ‘value chain’ themselves, exporting semi-processed nuts to Chinese, European and US processing companies that roast and market the nuts.
Be quick or die
Oltrema, an Indian company, was at the African cashew conference, offering cashew nut processing equipment and taking many orders. The Indians have been aware of the changing viewpoint of the African cashew producers who provide them 80 percent of the raw nuts they use.
Already several Indian cashew processing and export groups have established processing plants in Africa which can serve as the ‘springboard’ for a lot more. In this case, the big Vietnamese processing plants that have contracted to Indian companies are likely to be ‘orphaned.’ They will have to find their own way to survive.
Nong Nghiep comments that it is high time for Vietnamese enterprises to start investing in African plants, for while Vietnamese enterprises have vacillated, the Indians have cemented their firm positions in the market.(VietNamNet/NNVN)
Though the number of cashew nut processing plants has been increasing in Vietnam, domestic nut production has been decreasing. This has forced Vietnamese cashew processors to rely on imported nuts.
For many years, Vietnamese processors have had to import 40 percent of the raw nuts needed from Africa, or about 300,000 tonnes, worth $180 million a year. The figure is expected to increase in coming years, because Vietnamese farmers have chopped down cashew plants to grow rubber, coffee and other more profitable crops.
Where will Vietnam get raw nuts?
Some 14 African nations grow and export cashew nuts. In East Africa about 25 percent of the production is processed locally, but in West Africa the processing rate is only five to ten percent. These countries, members of the African Cashew Alliance and with advisory assistance from the Gates Foundation (US), are now making serious plans to boost local processing capability.
Nong Nghiep comments that the most practical way for the Vietnamese cashew industry to avoid being squeezed would be to make direct investments in Africa. There Vietnamese enterprises could do preliminary processing, then export semi-processed nuts to Vietnam, where Vietnamese processing plants could make finished products to be launched into the world market.
In other words, the Vietnamese cashew industry would imitate many industries in advanced countries by ‘going up the value chain.’ They would make finished products and get higher added value instead of making semi-processed products as at present.
However, Vietnamese businessmen hesitate to invest in African facilities. A problem lies in the fact that Vietnamese processors are now only halfway up the ‘value chain’ themselves, exporting semi-processed nuts to Chinese, European and US processing companies that roast and market the nuts.
Be quick or die
Oltrema, an Indian company, was at the African cashew conference, offering cashew nut processing equipment and taking many orders. The Indians have been aware of the changing viewpoint of the African cashew producers who provide them 80 percent of the raw nuts they use.
Already several Indian cashew processing and export groups have established processing plants in Africa which can serve as the ‘springboard’ for a lot more. In this case, the big Vietnamese processing plants that have contracted to Indian companies are likely to be ‘orphaned.’ They will have to find their own way to survive.
Nong Nghiep comments that it is high time for Vietnamese enterprises to start investing in African plants, for while Vietnamese enterprises have vacillated, the Indians have cemented their firm positions in the market.(VietNamNet/NNVN)
Comentários