Vingroup, widely regarded as Vietnam’s biggest privately owned company, has said it will be buying Israel technology to use in agricultural projects it is developing.
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The Hanoi-based conglomerate, whose interests range from hotels to online commerce, is making a foray into agriculture, which Israeli sources said could lead to tens of millions of dollars in sales annually for intellectual property, services and equipment over the next few years.
Pham Nhat Vuong, the conglomerate’s founder and chairman, told a press conference two weeks ago that the company would begin developing big commercial farms using Israeli, Dutch and Japanese technology through a newly form unit VinEco.
Among other things, Vuong said he was impressed by the fact that Israel was yielding 300 to 700 tons of tomatoes per hectare, against Vietnam’s 30-60 tons. The aim is to supply fresh produce on a consistent basis and at low costs to its developing supermarket chain and for export. VinEco has been capitalized at a 2 trillion Vietnamese dong ($92 million).
It also represents a toehold for Israeli farm technology in the Vietnamese market, using the same model it has in China in recent years by joining in large agricultural undertakings that require a mix of technology, equipment and services. Industry observers say the model is better than companies trying to sell on a piecemeal basis independent of one another.
Israel’s economic attaché in Vietnam, Tsafrir Asaf, said Vingroup executives and other Vietnamese leaders in the past two years have become acquainted with Israeli companies specializing in irrigation, greenhouse, fertilizer and seed technology.
“Vingroup finished 2014 with a net profit of $178 million and is the biggest private-sector taxpayer in the country. The chairman’s announcement is an incredible opportunity for Israeli companies to export to all of Southeast Asia. The attache’s office is working with Vingroup to help turn the announcement into a sustained reality in Vietnam.”
Niv Morag, head of the water unit at the Israel Export Institute, said he was trying to enlist Vietnamese businesspeople to attend the Watec water technology exhibit and conference this October in Tel Aviv. “We are expecting that more than five groups of senior executives will be coming, among them senior government figures, Vietnamese water companies and representatives of the country’s leading companies,” he said.