Investment and Startups

Attracting South Korean businesses to invest in Vietnam’s agricultural development

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04 May 2022, VN: South Korean enterprises’ investments in the development of high-tech and sustainable agriculture in Vietnam are still modest compared to the enormous potential.

During a recent working visit to South Korea, the MARD delegation led by Deputy Minister Le Quoc Doanh visited the country’s leading agricultural enterprises, including Hi-Tech Farm Agriculture Co.Ltd, a subsidiary of the Royal K Group, Charmfre Company, and SK Forestry Company (under SK Group).

The meetings are intended to attract and promote South Korean firms investing in agricultural development with the appliance of advanced and sustainable following the two countries’ strategic agricultural cooperation approach.

During the working session with Royal K Group, Chairman Ko Young Hak stated that the unit possesses strength in the sectors of technology, research, and application in high-tech agriculture. Royal K has been learning and exchanging knowledge with Vietnamese agriculture since 2019, and in February 2020, Hi-Tech Farm Co., Ltd. (a Royal K Group company) and Cao Bang province signed a Memorandum of Understanding on developing cooperation in smart agricultural projects.

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The two parties exchanged information and agreed on several issues and directions, as well as tasks, to prepare for the completion of the Investment project on the smart farm of Hi-Tech Farm, which was valued at USD 22 million and covers 30 hectares, with hectare dedicated to King’s Strawberry variety production.

The remainder of the land is being designed to construct a farm, seed development center, and auxiliary operations. Apart from Cao Banh, Hi-Tech Farm conducted research and offered collaboration with other provinces in Vietnam, including Hanoi and Ho Chi Minh City.

Deputy Minister Le Quoc Doanh expressed his praise for the technologies and strategy adopted by Hi-Tech Farm, stating that the method is not only suitable for South Korea, but also for other countries. Vietnam is an agricultural country, however, due to the country’s rising urbanization, competition for agricultural land is also escalating. As a result, the application of technologies such as Hi-Tech Farms is critical in Vietnam.

The deputy minister proposed that Royal K Group quickly promote investment initiatives in Vietnam. Additionally, he committed to accompanying and assisting those projects.

During the working session, Hi-Tech Farm (a subsidiary of Royal K Group) and the Partnership for Sustainable Agriculture Vietnam (PSAV) Office signed a Memorandum of Understanding on collaboration in areas where the two parties have potential and strength. The agreement will serve as the impetus and foundation for agricultural cooperation and development, particularly in high-tech agriculture.

Charmfre Company is a chicken raising and processing unit. This is South Korea’s first enterprise to invest in current European technology lines ranging from rearing chickens to producing chicken feed, slaughtering, and preliminary processing to finished product processing, packing, and automated storage. Additionally, it is the first to prioritize the welfare of poultry (farming, storing, and appropriate exploiting conditions, mitigating and not causing unnecessary pain when harvesting and experimenting). Salted chicken, ginseng stewed chicken, and fresh chicken are the company’s featured and best-selling goods.

Representatives of Charmfre revealed during the working session with the Delegation that the unit researched and planned to join the Vietnamese market five years ago. Following a two-year delay due to Covid-19, the corporation is expected to resume market research and investment planning in Vietnam.

The company urged the Vietnamese government, the Ministry of Agriculture and Rural Development, and other stakeholders to facilitate procedures and provide incentives for investment enterprises, such as land allocation, market development assistance, and so on so that the company can proceed with the investment quickly.

Charmfre believes that the unit’s participation would result in the creation of additional jobs for Vietnamese employees and the development of new career opportunities in rural areas. Simultaneously, the Company indicated its desire to transfer technology and collaborate with Vietnamese enterprises and farmers to boost the Vietnamese poultry industry’s competitiveness.

Deputy Minister Le Quoc Doanh stated that the Vietnamese government’s common policy is to facilitate and incentivize FDI enterprise. MARD encourages firms participating in agriculture to prioritize the processing of high-value-added goods, investing in depth rather than simply in large-scale, quantity-oriented projects.

He also underlined that the Ministry will provide favorable conditions to assist and accompany investors, emphasizing that South Korean firms can easily meet Vietnam’s processing, research and technology, and environmental guaranty standards.

At the discussion with SK Forestry Company (a subsidiary of SK Group), Chairman Inbo Chung explained that SK is one of South Korea’s largest financial conglomerates, covering several industries from telecommunications to chemicals and placing a premium on forestry development. SK partnered with Tra Vinh province in 2018 to establish a Memorandum of Understanding on Mangrove Rehabilitation. Apart from planting trees to rehabilitate mangroves, SK launched a social enterprise called “Manglub” to solve local unemployment and encourage Tra Vinh province’s development.

SK will continue to execute the mangrove rehabilitation project in Vietnam as part of its ESG (Environmental, Social, and Governance) management practice objectives. Additionally, SK I is highly interested in programs that promote forest planting and protection, as well as the carbon certification trade, in Vietnam’s northern mountainous region.

The group views it as a new investment segment with enormous potential in terms of economic growth and compliance with social and environmental responsibilities. SK aims to expand into the fields of agricultural and animal husbandry in Vietnam through the application of modern technology in resource management and preservation, carbon measurement, and certification.

Deputy Minister Le Quoc Doanh applauds SK Innovation’s initiatives and commitment to responding to climate change, as well as its contribution to addressing environmental challenges in Vietnam throughout the years, and expected the firm to continue various projects that foster such social values.

He stated that mangroves, termed Asia’s lungs, are being degraded as a result of irresponsible development and environmental issues, resulting in abnormal climate conditions such as global warming and sea-level rise.

Vietnam, like nearly other countries located in the Mekong river, is confronting mangrove deforestation. As a result, mangrove rehabilitation efforts have a special significance. Simultaneously, the deputy minister requested that SK organize a working group to visit Vietnam as soon as possible to explore and design investment projects for forest management and protection, carbon credit trading, and carbon emission reduction in forestry, farming, and livestock production sectors.

Deputy Mayor of Gimje City stated during a working session with Gimje Smart Farm Innovation Valley (Jeonbuk) that the smart farm innovation valley has been under construction since 2019 and was completed in 2021.

To ensure that learners may start their own business after 20 months of training, South Korea constructed farm areas equipped with greenhouses, IoT technology, irrigation systems, and environmental control systems.

Deputy Minister Le Quoc Doanh complimented Gimje City on the successful launch of the Smart Farm Innovation Valley. The Deputy Minister emphasized that Vietnam should learn about the approaching model that establishes a close connection between research, training, and technology application transfer and replication in a closed model.

Additionally, the Deputy Minister intended for agricultural collaboration between South Korea and Vietnam to be as fruitful as industrial and cultural cooperation.

During the working sessions, Deputy Minister Le Quoc Doanh stated his desire for South Korean partners to have a more comprehensive understanding of the investment climate in Vietnam agriculture by offering thorough information and requirements to promote bilateral agricultural cooperation.

On this premise, the Vietnamese Ministry of Agriculture and Rural Development would accompany and assist Korean investors in leveraging the potential of Vietnamese agriculture through a high-tech platform to achieve sustainable development goals.

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