VN coffee growers near bankruptcy

Monday, Aug 17, 2015 08:00

In March, Nestle opened an $80 million decaffeinated coffee factory in Dong Nai Province's Amata Industrial Park. — Photo baodongnai

DONG NAI (Biz Hub) — Coffee prices have dropped to record lows in southern Dong Nai province, pushing coffee growers, particularly small enterprises, to the verge of bankruptcy.

At the same, large foreign-funded growers, such as Nestle and Neumann Kaffee from Europe, are gaining ground.

Coffee prices have continuously fallen are now hovering around VND36,500 (US$1.7) per kilogram, the lowest price in years.

This has led to tonnes of coffee from previous harvests being left in farmers' warehouses.

According to Dong Nai's Department of Statistics, coffee bean exports fell by 63,000 tonnes in the first seven months of last year to slightly more than 134,000 tonnes. Export revenue of almost $271 million was down 47 per cent year on year.

Nguyen Van Thu director of G.C Food Limited Company in Trang Bom district said his company was processing coffee to export to the US.

Currently, the price of unprocessed coffee is at the lowest level while foreign companies continue expanding.

Thu said his company had begun investing in coffee processing with a view to exporting the finished product globally. In the first seven months of this year, it exported 100 tonnes of coffee products to the US market.

It is expected that by the end of the year, the company will export another 200 tonnes.

Recently, the Germany-based Neumann Kaffee group opened a coffee processing factory in Long Thanh district, the second facility of the company in Viet Nam. The group has 46 factories in 28 countries.

The Swiss company Volcafe Vietnam has just opened a processing plant with a capacity of 100,000 tonnes of coffee products a year.

In March, Nestle opened an $80 million decaffeinated coffee factory in Dong Nai Province's Amata Industrial Park. The new facility, the second phase of the Nestle Tri An plant, will produce decaffeinated coffee for use in Nestle plants all around the world.

This is the first decaffeinated coffee factory in Viet Nam and Nestle's second globally.

Viet Nam is the second biggest coffee exporter worldwide behind Brazil. — VNS

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