VIETNAM – Vietnamese retailing industry needs ‘big guys’ – 7 Jun, 2011

Building up a retail network which can bring facilities to consumers and developing the retail companies powerful enough to lead the market, are the two issues being discussed thoroughly when compiling a strategy to develop retail trade services in Vietnam.

The “tomato flow”

A survey conducted by Cadilhon, a market survey firm, on the flow of tomatoes after harvesting, can show an overall picture of Vietnam’s retail market. After tomatoes are harvested by farmers, they are carried to distributors. The tomatoes consumed by Metro supermarket bring 1.4 percent of the total sales, while 16 other supermarkets bring 0.6 percent of total sales. The other 98 percent of tomatoes are consumed by wholesalers mostly through the vending network and 1600 stable retailers.

The figures cited by Cadilhon show that the traditional sale channel still play a very important role in distributing everyday consumer products, such as food or household articles.

However, analysts have pointed out that in recent years, modern retail channels have been expanding rapidly with the development of some leading brands like Metro, Big C, Saigon Co-op supermarket chains. Not only foreign retailers can come to Vietnam to set up distribution points but foreign manufacturers can also set up trade centers through domestic partners.

However, domestic retailers still hold dim role in Vietnamese market, which still lacks “big guys” who can lead the market. The survey on the “tomato flow” can show that. Meanwhile, in other regional countries, the biggest retailers are domestic ones. In Indonesia or China, for example, four domestic retailers now have the biggest sales, even though the giant Wal-Mart is now present in China, or Carrefour has arrived in Indonesia.

Prioritising to develop “big guys” or giving opportunities to all?

As a marketing expert, Ngo Trong Thanh, Managing director of Mancom, has suggested drawing up a government’s action plan in order to develop retail trade in Vietnam in 2011-2020. Thanh said that it is necessary to define the fields that need to be prioritised to develop and encourage big companies to undertake the role of pioneering and leading the market.

“The success story of Phu Thai as a big distributor, or the story of Saigon Co-op with a large supermarket chain can show the efficiency of retailers in big scale,” Thanh said.

He went on to say that it is necessary to encourage big companies to establish convenience store systems, join food shop chains, or farm produce trade centers.

However, Le Viet Nga, deputy director of the Domestic Market Department under the Ministry of Industry and Trade, which is compiling the programme on developing retail industry, stressed that it is necessary to create equal opportunities to all enterprises. She said that this is the main principle of the legal document the ministry is compiling.

“Will the prioritisation given to big enterprises come contrary to WTO rules and create unfair business environment?” she questioned.

In reply, Thanh said the question needs to be answered by policy makers. However, as a marketing expert, Thanh said that “supporting retail companies” does not mean offering preferences or giving money.

The support can be in different modes. “Assisting enterprises to build up reasonable management tools and helping train the workforce could be the effective support,” he said.

“If all domestic retailers are nearly the same like small eggs, they will be easily crushed when foreign retailers expand their business. The practice of the retail industry development in other countries has shown this,” he added.

Information Intellasia.net

THAILAND – PM Wants Pork and Egg Prices Slashed – May 31, 2011

THAILAND – Prime Minister Abhisit Vejjajiva has authorised the Commerce Ministry to consider ways to reduce the price of pork and eggs without hurting farmers.

Mr Vejjajiva told the ministry that eggs can be reduced by at least 20 satang each and pork should also be cheaper, because the information showed the raw material costs for pork can be cut without any impact on farmers.

According to Bangkok Post, the ministry yesterday reported to the cabinet that egg and pork prices are likely to drop because more supplies are coming on to the market.

The Internal Trade Department reported egg prices as of May 18 at about 2.90 baht each in mixed sizes, and 3.30-3.40 baht each for size three eggs.

The ministry’s price suggestion was 2.90 baht an egg, and 135 baht a kilogramme for pork red meat.

Vachara Kannikar, Deputy government spokesman said the ministry reported that businesses asked to increase prices for 11 products in March, including palm oil, soybean oil, fresh milk, fertiliser, steel, batteries, tyres, electrical wire, soap, lubricant oil and monosodium glutamate.

The ministry allowed increases for only four products – palm oil, soybean oil, fresh milk and fertiliser.

He said Deputy prime minister Suthep Thaugsuban told the cabinet that the ministry has authority to immediately reduce palm oil prices without seeking approval of the National Palm Oil Committee because 47 baht a litre was only a ceiling price.

The farmers also have already sold fresh raw palm oil at less than 6 baht per kg.

Information ThePigSite News Desk

GLOBAL – Financial Innovation & Reforms Vital for All Markets – June 01, 2011

GLOBAL – Financial innovation and reforms are strengthening emerging markets and expanding the market for agricultural productivity investment, according to the Chief Sustainability Officer of Novus International.

Financial innovation and reforms are key to strengthening the economies of emerging markets and providing the risk management tools for farmers and food processors to adopt innovative sustainable agricultural practices. Joyce Cacho, Ph.D., Chief Sustainability Officer at Novus International, Inc., shared this encouraging news during a presentation at the 2011 Ag Innovation Showcase on 23 May. She also said that to improve agricultural practices sustainably, collaboration frameworks of major stakeholder groups – in particular scientists, farmers, processors, commodity exchanges, the finance industry and policy-makers – are critically needed. Under the leadership of Thad Simons, President and CEO of Novus International, a portfolio of partnerships have been developed to support customers in local markets and environments worldwide.

Dr Cacho said: “In developing countries, financial innovations are deepening the financial markets by increasing accessibility to a broader cross segment of the economy. Innovations are also increasing the alignment of financial products with customer needs and lowering financial transaction costs. There is a strong recognition in these countries and emerging market regions that financial reform designed to improve access to the formal economy also magnify the positive impact of other policy changes.”

She participated in the Global Ag Economic Forum, on a panel discussion that opened the Third Annual Ag Innovation Showcase at the Donald Danforth Plant Science Center in St Louis. The event is considered to be the leading international conference focused on exploring innovative ideas and opportunities related to agriculture in solving long term issues in food production and security, environmental and energy concerns.

Dr Cacho said that the value-chain approach to agricultural finance focuses on understanding that farmers are both producers and consumers in economies. It is by bankers having this understanding, and by learning the steps from ‘farm to fork’, that cash flow financing products for primary processors or collectors are developed.

She continued: “In many ways, finance in emerging market countries and regions has grown beyond the focus on microfinance. For example, there is a tremendous push to establish systems of warehouse receipts and commodity exchanges in emerging market regions. These tools help with managing risk across seasons and across distances. This in turn gives farmers more flexibility – more choice – in converting their crops to cash or investments.

“Many developing country economies are charging ahead with expanding the accessibility of finance to bring more of the growing population into the formal economy. For example, deposits made with mobile telephone banking mechanisms are increasing. Community savings organisations, which are the beginnings of credit unions as we know them in North America, are improving in service quality and expanding their investments to include agricultural equipment, where they previously focused on transportation services,” Dr Cacho said.

Novus International, Inc. was a sponsor of the event and a key player in the development of new technologies needed to close the productivity gap between the world’s demand for food and the resources available to produce that food sustainably.

Dr Cacho concluded: “We care about ag financing innovations and reforms because our customers need access to adequate risk management tools as we work with them to develop and implement productivity enhancements, environmental innovations and best management practices. Investing in rural development, reducing energy costs while increasing energy availability, increasing accessibility to quality, nutritious, affordable food, improving environmental management, and addressing social justice are all needed to achieve total food sustainability in emerging economies.”

Information ThePigSite News Desk

NEW ZEALAND – Major feed business created in New Zealand – 19 May 2011

Ballance Agri-nutrients is joining forces with two of New Zealand’s independent suppliers of customised animal feeds to create a new nationwide business focused on meeting farmers’ complete animal nutrient needs from pasture through to supplements.

The company is purchasing a large share of two of New Zealand’s leading animal nutrient manufacturers; Seales Ltd in Morrinsville and Winslow Feeds and Nutrition in Ashburton.

The new operation, Seales Winslow, will be 51% owned by Ballance Agri-Nutrients. The shareholders of Seales Ltd and Winslow Feeds and Nutrition will each own half of the remaining 49% of the new business. Seales Winslow is expected to begin operations by June 1, 2011.

Natural fit

Ballance Agri-Nutrients Chief Executive, Larry Bilodeau, said the two firms were both recognised as leaders in producing high performance compound feeds and additives and were a natural fit with a farmer-owned co-operative focused on higher farm production.

“All three companies take a strong science-based approach to product development and on-farm advice, and this gives us great common ground.

“Better animal nutrition is the greatest single opportunity to boost the productivity of pastoral farming and New Zealand urgently needs to do this.

“We are offering a whole farm nutrient management approach which will improve productivity and animal fertility, health and welfare while reducing agriculture’s environmental footprint,” said Bilodeau.

Platform for growth

Seales Winslow’s inaugural Managing Director is Ross Hyland, current MD of Seales Ltd, who says he is looking forward to leading a nationwide firm able to service the needs of farmers right across the country.

“The new venture will provide a great platform for growth and ensure we can meet the expanding demand from farmers for a complete animal nutrition package.

Winslow Group’s Managing Director and new Board director of Seales Winslow, Craig Carr says the merger creates a New Zealand first with an operation which will now fully link all aspects of nutrition on a dairy, deer or sheep and beef farm.

Ballance Agri-Nutrients and Summit Quinphos will continue to provide shareholders and customers with specialist farm-gate service through their Technical Service Representatives. Seales Winslow will also continue to maintain a team of specialist feed representatives.

Information AllAboutFeed

CHINA – Sinograin for the first time imports US corn – 23 May 2011

China Grains Reserve Corp. (Sinograin), which oversees the central government’s reserves, bought one million tonnes of US corn in March, indicating that rising domestic demand pressures have prompted the nation to seek overseas supplies.

Cheng Bingzhou, the company’s spokesman, confirmed the news to Reuters and added the company has no plan now to import more. Further imports have to balance farmers’ interests while curbing domestic grain price rises, he said.

The company has started to load its first cargo of 330,000 tonnes of corn from a US port, which is expected to reach China in June or July.

After deducting tariffs, value-added tax and other port fees, the cost of the imported US corn would be about RMB 2,100-RMB 2,200 per tonne.

In southern China, domestically produced corn has reached an average price of RMB 2,350 per tonne, and the price may continue to gain as demand for fodder consumption increases.

Falling domestic reserves

Sinograin is the largest policy grain reserve company in China, and it has a mainly domestic focus. The shipment is the first time the company has imported US corn.

China implements strict quota controls over imports of grains including corn, wheat and rice. The National Development and Reform Commission, the country’s powerful economic planner, grants 60% of the quota to state-owned companies, with private enterprises sharing the rest.

Information AllAboutFeed

VIETNAM – Fertiliser maker rush to transfer technology for Cambodians – 26 Apr, 2011

The Fertiliser and Petrochemical Corporation (PVFCCo) under PetroVietnam is boosting the transfer of technology for farmers in at least three Cambodian provinces as part of its overseas expansion scheme.

Deputy general manager in charge of marketing and building distribution system, Nguyen Hong Vinh, said at a press briefing in Phnom Penh on April 23 that his corporation has placed neighbouring Cambodia top priority in its scheme to expand foreign market shares.

The three provinces to benefit from the transfer of technology programme this year are Kongpong Cham, Kongpong Thom and Kondan.

The PVFCCo has launched the programme of technological transfer right after opening its representative office in Phnom Penh in May, 2010. Numerous workshops have been opened and farmers shown around model fields in Bat Dombong, Kongpong Chnang and Ta Keo provinces.

A farmer from Kon Dan province, named Kieng Kheng, said training in farming know-how and use of assorted fertilisers and insecticides made by PVFCCo have enabled him and many farmers in the region to increase rice yields from 3.5 tonnes per hectare to between seven and eight tonnes.

In addition, the Vietnamese company has presented 50 tonnes of nitrogenous fertiliser for poor farmers in Svay Rieng and Pray Veng provinces and donated $25,000 for families of victims of the deadly stampede last November.

PVFCCo is Vietnam’s leading fertiliser maker which accounts for half of the domestic nitrogenous fertiliser market.

Information Intellasia.net

CHINA – China helps set up first feed mill in Fiji – 22 Apr 2011

The Fijian government on Thursday commended China for helping establish the first feed mill in the island nation.

Lt. Colonel Mason Smith, permanent secretary of Fiji’s Ministry of Agriculture, told media that engineers from China are in Fiji to set up the country’s first feed mill at the Koronivia Research Station, as a response to the plight of livestock farmers.

According to the official, it will take Chinese engineers two weeks to set up the mill and another two weeks to train officials of his ministry to operate it. The feed mill would be commissioned in the third quarter of the year.

“The mill will basically be able to produce feed for all kinds of livestock like ducks, goats, pigs, cattle and this will ensure that in times of drought and flooding that we have mill in store to be able to feed our livestock,” Smith said, adding local supply of feed will ease farmers’ production costs.

Local ingredients

Livestock farmers in Fiji have had to put up with steep farm production costs exacerbated by the high costs of supplementary feed.

Local agricultural waste or by-products like refuse from municipal markets and sugar cane tops will be processed and churned into feed pellets, according to local media.

Tomasi Tunabuna, Director of the Animal Health and Production Unit (AH&P), said that the mill was a major achievement for the government in terms of providing conducive environment to livestock.

“It is pretty expensive for farmers to buy imported feed and we find that most of the time if they use feed concentrate, the costs of feed make up more than half the cost of operating the farm,” Tunabuna said.

Information AllAboutFeed.net