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  • Proposing solutions to restructure the cashew industry

    Sep 24th, 2019

    In 2019, Vietnam's cashew industry is facing a new turning point when it is overcoming the stage of recession and crisis to recover again. However, cashew industry still has many potential risks with inherent shortcomings.

    Need a "big" in the industry

    From 2006 to 2018, Vietnam replaced India to become the world's largest cashew exporter. Thanks to the orientation of the State, namely Vietnam Cashew Association (Vinacas), the Vietnam cashew industry has been unified and promoted the synergy from the raw cashew trade, production - processing and trade. workers and export companies, especially throughout, are the contribution of cashew processing machine manufacturing companies, improving processing productivity, helping Vietnam's cashew industry to flourish and maintain its No. 1 position. in the supply chain of export kernel around the globe.

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    Vietnam cashew industry has not had a "big man" that is really strong enough (Image: Processing cashew nuts at NM of Tan Long Group).

    In 2013, the cashew industry in Vietnam reached over US $ 2 billion in export turnover for the first time, in 2018, it reached US $ 3.5 billion (in the first 8 months of 2019, the export output reached a record high ever. now with over 250 thousand tons). In general, Vietnam's cashew industry is still growing well, attracting hundreds of small and large enterprises to participate in export processing. However, the Vietnamese cashew industry, despite its large export turnover, always has many potential risks and does not have a solid foundation for development.

    One is from the raw to the cashew, although in general Vietnam is the largest producer and exporter of cashew kernels in the world, but it is under the control and major impacts of Indian businesses or businesses. Indian descent. They completely impose the game at home "Vietnam" on the transaction of raw cashew, especially on payment conditions that are completely unfavorable for domestic buyers.

    Meanwhile, the quality and reputation, commitment to the contract is very low, the majority do not follow the terms of the contract signed. The evidence is that Vietnamese enterprises, particularly small businesses that do not have enough conditions to check the quality of goods at the port of loading, are severely damaged or "contract" for contracts when prices rise, or deliver goods. Not the signed quality.

    With such a snatching and discredited business culture, the invisible enterprises from India have spread that business style to some Vietnamese enterprises in order to "retaliate", often retaliate. each other. Consequently, the whole Vietnamese cashew industry is affected in general by low commitment and lower credibility.

    Secondly, Vietnam cashew industry is inherently weak in structure due to scattered resources. Currently, there are more than one thousand enterprises and household economy participating in the supply and export supply chain of cashew kernels.

    On the one hand, it is easy to be misled by foreign companies, on the other hand, it shows that the cashew industry does not have a strong enough company to counterbalance with foreign companies to stabilize the market, with safe sales methods. more for buyers in Vietnam.

    At the same time, it can help representatives of manufacturers to best control the quality of imported raw cashew raw materials, transparently trading the right quality and price suitable to the market by applying synchronous solutions of resources. key logistics, finance, distribution ...

    Private way of Tan Long

    Although in recent years, the cashew industry has regressed due to the overheating of export processing enterprises, however, Tan Long Group Joint Stock Company (Tan Long) also sees both opportunities and challenges. when the decision to join the cashew industry began in 2019. Nevertheless, Tan Long's participation in the cashew industry is the result of a serious and careful market research process. Tan Long has built a long-term strategic project instead of seeking a temporary profit in the form of "muddy water".

    In the activity of purchasing raw materials in West Africa in the countries of Ivory Coast and Guinea Bissau, Tan Long always appoints a group of 20 people to directly organize purchasing in each country. This group of operations includes purchasing, trading, logistics, inspection, warehousing, etc.

    As a result, although the purchase volume in Ivory Coast is about 20 thousand tons and the corresponding figure in Guinea Bissau of 24 thousand tons in 2019 is a very modest figure, Tan Long has succeeded in tight control. Strict quality of each shipment, proactive delivery schedule. The most special thing that customers who buy products of Tan Long in any form of transaction are satisfied and assured of raw material production, proactive in planning business plans.

    In its development strategy of cashew production and business, Tan Long always tries to build a solid foundation from raw material purchasing, investment in facilities for processing and eventually production. participating in exporting and distributing to domestic and foreign retail markets. With such clear principles and goals, and being aware of the development trend of Vietnam cashew industry in particular and the global cashew industry in general, Tan Long said that Vietnam cashew industry in general needs some solutions. solutions to stability and development.

    One is to form a leading strong domestic enterprise with enough capacity to counterbalance foreign businesses that are deliberately manipulating and destroying Vietnam's cashew industry with a plan of subdividing and differentiating them to ease. easy to acquire.

    Secondly, it is necessary to form a chain of links between splitting furnaces and small companies to unite to create strength and maximize competitive advantages in production and processing. In addition, screening the market, limiting non-reputable transactions, building technical barriers to protect industry structure, avoiding many businesses taking advantage of barriers to enter the cashew industry in the low segment to earn transient profits, snapping in a "easy to come and go" style.

    “Some lessons to be learned are: Always promoting internal resources with success is the application of techniques and technologies, helping to increase production and processing productivity, reduce costs; always enhance the competitiveness on all fronts of purchasing in Africa and export sales in consumer markets; always be honest and keep commitments and credibility in all transactions to create the root of long-term sustainable development. ”

    (Mr. Tran Vu , Director of Cashew Processing Plant of Tan Long Group Joint Stock Company)