Entrepreneur Le Quang Luyen: “Cashew investment should be located in Binh Phuoc”

Mr Le Quang Luyen, Member of the Executive Board of the Vietnam Cashew Association (VINACAS) and President of the Board of Members of Phuc An Co, Ltd, has many years of experience and dedication to the cashew industry. He has invested a big sum of money and applied advanced science and technology to create added value for cashew products, helping Vietnam and Binh Phuoc province assert cashew products on international markets. Quoc Hung reports.

You are well known for your dedication to the development of the cashew industry. What do you think about the current development of the cashew industry of in Vietnam in general and Binh Phuoc in particular?
With more than US$3 billion of export value in 2016, Vietnam is currently the largest cashew exporter in the world. And, in Vietnam, the province of Binh Phuoc has long been considered the capital of the Vietnamese cashew industry and attracted many processing companies.

US$3 billion of export value is not a small number. The cashew industry is playing an increasingly important role in the economy. However, such export value does not mean a very high profitability for the cashew industry because most of companies cannot perform deep processing, where added values is generated for cashew nuts. We are just exporting simply processed nuts with a lower rate of profitability.

At present, just a small share of cashew nuts is salt-roasted, mainly for domestic consumption and for export to China, not to other major markets like the United States and Europe. To to develop the cashew industry sustainably and generate added values for this industry, we must go to final products with high standard, more potential markets. And to do so, we must conduct market research, invest in processing technology, and even prepare capital.

Binh Phuoc is considered the capital of the cashew industry but up to 70 per cent of inputs are reportedly imported. This reality plus other inadequacies results to the value of the cashew industry. What do you think about this?
Binh Phuoc is described as the capital of Vietnam’s cashew industry because it has the largest cashew tree acreage in the country, with about 143,000 ha. The province also leads the country in output and cashew nut processors. In spite of holding such advantages, the export value and actual value of cashew trees that the province gets are still very low because most of cashew companies are small. They cannot directly export their products to foreign countries but cooperate with companies in other localities, particularly Ho Chi Minh City, to do this. And, export value is counted for those localities.

Binh Phuoc province presently harvests 300,000 tonnes of cashew nuts a year. This accounts for a small part of the export value of US$3 billion the sector achieved. Local processors now have to import up to 70 per cent of inputs to generate that export value. In other words, our true export value comes from manpower export rather than product itself.

The government of Binh Phuoc province and cashew companies like us are aware of this reality. We are seeking ways with the province to solve the weakness.
Against the backdrop of input reality, for you, what solutions should the cashew industry in general and Binh Phuoc province in particular take to tackle it?
In my opinion, the most fundamental and effective solution to the input issue is increasing productivity, especially in the current context of increasing land scarcity. In recent years, Binh Phuoc has cooperated with other provinces and the Vietnam Cashew Association to seek solutions to develop, improve and especially enhance the crop yield. In the past, a hectare of cashew trees harvested from 800 kg to 1 tonne. By applying transplant and tending techniques, the yield has risen to 3 tonnes at present.

Besides, in order to stabilise the input supply, we have to cooperate with African countries, especially West Africans, to buy their raw materials. In April 2017, the Vietnam Cashew Association joined the mission of the Ministry of Agriculture and Rural Development and the Ministry of Foreign Affairs to work with the Government of Côte d'Ivoire (Ivory Coast) and Ghana to discuss on cashew industry cooperation. Accordingly, the Vietnamese side pledged technical assistance to boost productivity in these countries and they pledged to continue supplying raw materials to us.

Côte d'Ivoire has 700,000 ha of cashew trees, but the yield is only 200 - 300 kg per ha. If we are able to help them increase productivity to 1 - 1.5 tonnes per ha, the output will be then very big.

Africa has abundant cheap cashew nut sources. Should Vietnamese companies directly invest there?
Some Vietnamese companies have invested in Africa in a bid to take advantage of abundant input sources but I have no idea whether they are successful or not. Investing in Africa, they will face difficulty in recruiting qualified labourers. Low work skills and poor labour sense result in low productivity there.

During the working session with the Government of Côte d'Ivoire in April 2017, the host not only asked us to provide technical assistance, but also suggested we transfer processing technologies. I had an honour to give my remark and I said “Our Vietnam does not conceal the technology. Our current achievements as the largest exporter of the world is resulted from a lot of failures and costs.” Thus, I recommended them this approach because processing requires technology, engineering and workmanship. Weak workmanship and low sense of labour are the biggest difficulties of African countries now. The host agreed with our opinion and pledged to continue long-term cooperation with Vietnam.

As for domestic input supply, what will localities and enterprises need to support farmers to develop cashew trees?
There is no other way but processors and farmers must go together. Cashew growers want to sell their products to producers and the latter also wants to buy products from the former.

At present, the leaders of Binh Phuoc province and the Vietnam Cashew Association are now working to connect farmers and businesses via region-based production cooperatives. I think this is a good, right and timely direction to help farmers to grow cashew trees and enterprises feel confident with local materials.

Cashew trees play an increasingly important role in socioeconomic development and poverty reduction. So, do you think it is necessary to have specific policies?
Cashew trees have already supported farmers to end poverty and they are now helping them to well-being. To achieve sustainable development, I think that the government should have specific policies or certain incentives to develop the cashew industry, e.g. incentives for fertilisers, pesticides, finances, and fair and sustainable consumption.

After a long time doing business with Binh Phuoc province and experiencing ups and downs of the cashew industry, how do you assess the current investment climate of Binh Phuoc province, especially in the cashew industry?
In my point of view, the investment environment in Binh Phuoc province is very good. Particularly, if companies, both domestic and foreign, intend to invest in the cashew industry, they should invest in Binh Phuoc province because this is the producer of best cashew nuts in the world and of course the best in Vietnam.
Binh Phuoc shares the border with Cambodia, which presently advocates developing the cashew industry. Without the intention of processing the nuts, the neighbouring country will be a big supplier for investors.

In Binh Phuoc province, they will be able to recruit high level and experienced cashew workers, which cannot be seen in any other localities. In a nutshell, Binh Phuoc is an appealing investment destination for cashew investors.

Cashew trees are important to Binh Phuoc, only after rubber. I personally see that the Provincial Party Committee and the Provincial People’s Committee are very keen on the development of the cashew industry.