Wave of investment from agricultural giants

Recently, a big number of giants investing in Thanh Hoa's agricultural sector has created a fierce race and competition for labor force.

Over the years, Thanh Hoa has attracted many major agricultural investment projects, especially in the livestock industry. Photo: Vo Dung.

142 agricultural investment projects in over 5 years

The wave of agricultural investment in Thanh Hoa province began to increase sharply in 2016. However, it was until 2019 that the province really witnessed the "landing" of a big number of large and well-known investors.

November 2019 marked a new milestone in the wave of agricultural investment in Thanh Hoa with the establishment of Viet Avis Food Joint Stock Company, the most modern broiler slaughtering and processing plant in northern Vietnam.

This is a joint venture project between Gia Phu Agricultural Products Joint Stock Company and Master Good Group (Hungary), with slaughtering capacity of 8 million chickens per year and a total investment of about VND 300 billion.

As Mr. Ba Ranh, President of Master Good Group said at this event, the establishment of Viet Avis Food Joint Stock Company would trigger a competition in the poultry slaughtering sector for export in Vietnam.

This not only stimulates investors' curiosity of potential and investment opportunities of Thanh Hoa but also helps the province's agricultural industry develop sustainably.

The fact that Gia Phu Agricultural Products Joint Stock Company and Master Good Group (Hungary) jumped to invest in Thanh Hoa not only created competitions in the domestic market but also immediately drew a number of other major agricultural investment projects to the province.

Many domestic and foreign companies paid attention and registered for certificates of investment or began their investment projects on the agricultural and rural areas in Thanh Hoa. This showed that the investors had trust in the province's mechanism and policy framework for investment.

According to statistics from the Department of Agricultural and Rural Development of Thanh Hoa province, so far the locality has attracted 176 agricultural investment projects with a total investment capital of VND 20 trillion. The total area of the projects was over 3,700 hectares of which there were major projects expected to completely change rural life in the province.

Among these projects there were 7 foreign direct investment projects with a total investment capital of VND 3.9 trillion, an average of over VND 553 billion per project.

Only in the period of 2016-2020, Thanh Hoa attracted 142 agricultural investment projects with a total investment capital of over VND 18.5 billion. The total area of the project was nearly 3,600 hectares.

In addition to attracting major projects, Thanh Hoa also aimed to give priority to the projects applying scientific and technological advances aligned with processing and consumption, contributing towards creating jobs for local workers.

Some of the projects ranging from production to processing, or both, could be mentioned. For examples, Vietnam Dairy Products Joint Stock Company (Vinamilk) invested in the construction of dairy farms with the size of 16,000 cows and a total investment capital of VND 1,600 billion. TH Group is investing in a dairy project with the size of 20,000 cows and a total investment capital of VND 3,800 billion. New Hope Pte.Ltd (Singapore) invested in a livestock farming project with the scale of over 10,000 sows and 500,000 hogs and a total investment capital of VND 1,125 billion. 

Recently, Xuan Thien Group is completing its investment procedures for 18 projects with a total registered capital of VND 32,400 billion. AVG Group plans to invest in a pork processing complex in Nghi Son Economic Zone with a total investment capital of VND 1.4 billion.

Create attraction in the labor market

The representative of the Department of Agriculture and Rural Development of Thanh Hoa province said investing in agriculture was a high-risk investment channel but also full of potential and advantages. Over the past years, Thanh Hoa determined that agriculture was a sector with many strengths and great space for development. Therefore, the province has clearly outlined policies to attract investment in this sector.

In addition to organizing annual investment promotion conferences to attract investment and implement projects, Thanh Hoa has applied preferential mechanism and policies to support investment based on the principle that investors are entitled to the highest incentives in terms of interests while performing their obligation at the least under the framework.

Depending on the size and nature of each project on the basis of the investors' requests, Thanh Hoa will consider and provide special support for the big projects which play an important role in promoting the transition process of the local economic structure and make a breakthrough in socio-economic development of the province.

In recent years, besides policies from the central government such as incentives for investment in agricultural and rural areas, incentive corporate income tax, preferential export and import tariffs, Thanh Hoa issued its own mechanisms and policies to support agricultural development.

The province's project of land accumulation, agricultural reconstruction and support for seed and livestock breed production has been widely deployed in recent years. An effective credit policy, subsidy on interest rate and capital used for these policies taken from the province's budget encouraged enterprises to invest in agricultural and rural areas in the province.

The mechanisms and policies promulgated by the province have received support from businesses and local people, being implemented actively and effectively encouraging enterprises to invest in agricultural and rural areas. Many "giants" with huge potential rushed to invest in Thanh Hoa agriculture, creating fierce competition in terms of labor force and production materials.

Mr. Nguyen Xuan Thien, Deputy Director of Thien Truong 36 Company, one of the enterprises pioneering investment in Thanh Hoa's agricultural sector, said that the interest and investment of investors was the driving force for the province's agricultural businesses to thrive and increase awareness of the value of their products. This would maximize exploitation of the province's potential and advantages in agriculture.

Thanh Hoa's agricultural sector still grows below its potential

Vice Chairman of Thanh Hoa Provincial People's Committee Mr. Le Duc Giang said Thanh Hoa has a very large area of agricultural land with more than 900,000 hectares consisting of three typical ecological zones (mountainous, plain and coastal areas). The province currently has almost 900 enterprises investing in agriculture, more than 700 farms, over 1,100 cooperative groups, 661 cooperatives. 100% of the cooperatives were converted or reorganized in line with Law on Cooperatives 2012.

These are the factors that help Thanh Hoa's agricultural sector make a breakthrough. However, investment in agriculture in the province is in fact still below its potential.