Investment Potentials In The Cashew Nut Business
Investment Potentials In The Cashew Nut Business
CONTENT 04 ABOUT MY LE Co,. Ltd 06 MY LE Co, Ltd
08 BINH PHUOC PROVINCE 12 CASHEW INDUSTRY POTENTIAL IN VIETNAM 14 Cashew industry potential in vietnam 16 Cultivation area, productivity (period 2008 – 2013) 17 Cashew industry potential in vietnam
18 CASHEW GLOBAL MARKET 19 The cashew market 20 Vietnam’s cashew Trade Flows
26 INVESTMENT PROPOSAL
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About 4 | www.myle.vn
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MY LE Co, Ltd My Le Co, Ltd established in 1993, is a major company in the cashew business in Binh Phuoc province. Our trademark logo has known as:
Development orientation
Charter Capital
USD 6.85 million
General Director
Pham Thi My Le
Head Office & Factory
DT 741, Long Hung Commune, Bu Gia Map District, Binh Phuoc Province
Branches
In Dong Xoai, Phuoc Long, Loc Ninh, Bu Dop
Business scope
• Processing, Trading Cashew nuts, other Agricultural products • Cultivation, Processing of Oolong tea • Production of snacks made from cashew
Source of material
• Purchase from local and African suppliers (10,000 tons)
Capacity
• • • •
Major markets
USA, Europe, Hong Kong, China.
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Space area for factory and warehouse: 38,000sqm Labor: 500 workers Processing capacity: 1,000 tons of raw cashew/month Export turnover: USD 15 million/year
1/ Short term: • Capital investment to collect raw cashew > Processing for export • Cashew nut collection in large quantity for export (no processing) • Import cashew (both raw and cashew nuts) in large quantity for distribution to local dealers My Le company has been assessed and found to conform with the requirements of TCVN ISO 220000:2007 / ISO 22000:2005, which issued on 27th Jun 2013
Competitive Advantages • Located right in the supply source area; Good connection with many suppliers. • Profound experience in the cashew processing and exporting. • Recognized brand name, Stable quality > better export price compared to other businesses.. • Large export market
2// Long term: • Upgrade the factory, investment for new technology, cooperation with farmers to set up new organic plantation areas > Production of high quality cashew and by-products for export
Demand for investment capital Working Capital: to purchase raw cashew for processing, to create cashew reserves for the year round operation Fixed Capital: Equipment investment (shell and peel removal machine, color separation, sorting machines) and Factory expansion.
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Province 8 | www.myle.vn
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China
BINH PHUOC PROVINCE
BINH PHUOC PROVINCE
Hanoi
Laos
Binh Phuoc is a western province located in the south-eastern part of Vietnam, being at the junction of 3 regions: the Highlands, the Southern economic hub and Cambodia (240 km borderline). Total land area: 6,871.5 square km, in which: • Forest land: 51.3% • High quality soil: 61.17%
Binh Phuoc Province enjoys natural conditions, good climate and quality soil (61% of land area) which render this region suitable for plantation of industrial trees (rubber, cashew, coffee, pepper). This is an important source for industrial development and export processing.
The traffic system is well developed with main arteries (National Road 13 and 14). Waterways navigation uses Saigon and Dong Nai rivers. In the future, the Trans-Asian Railroad , passing by Binh Phuoc province, will connect Viet nam to Cambodia, Laos, Thailand, Myanmar, thus opening up prospective trade potentials and economic development.
Climate: sub-equatorial monsoon. Temperature: stable, 250C - 260C.
TT. PHÚ RIỀNG
TÂY NINH
Thailand
Danang
HUYỆN BÌNH LONG TX. ĐỒNG XOÀI
Nha Trang
HUYỆN CHƠN THÀNH HỒ DẦU TIẾNG
ĐT. CHƠN THÀNH
TT. TÂN PHÚ
ỐC
QU LỘ 13
Ho Chi Minh City
755
KHU CÔNG NGHIỆP
KHU DÂN CƯ
Binh Phuoc
Cambodia
ĐT
BÌNH DƯƠNG
KHU CÔNG NGHIỆP
HUYỆN ĐỒNG PHÚ
VỊ TRÍ KCN ĐỒNG XOÀI 3
Đi TX Thủ Dầu Một
ĐỒNG NAI
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Cashew 12 | www.myle.vn
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CASHEW INDUSTRY POTENTIAL IN VIETNAM Since 2006, Vietnam occupies the 4th position in terms of annual raw cashew production and 1st position in terms of export quantity. Nevertheless, every year Vietnam has to import 50% of the raw material from Africa, Cambodia, Indonesia.. In 2012 Vietnam exported 223,000 tons of cashew nuts (Turnover: USD1.48 billion). During the 9 first
months of 2013, export quantity amounts to188,000 tons (Turnover: USD 1.19 billion), denoting an increase of 16.5% in quantity and 9.3% in value as compared to 2012. Average export price: USD 6,300 / ton. Việt Nam cashew nuts are exported to over 100 world markets, USA being the major market, followed by European ones.
Binh Phuoc Province has become the capital of cashew, in which its Phuoc Long district has the largest cashew plantation area. Binh Phuoc records 167,590 ha of cashew land (mainly cultivated by farmers’ families), accounting for 34.28% of total cashew land of the entire country. Average production: over150.000 tons/year.
There are 180 businesses and 119 cashew processing facilities generating USD 84.60 million in turnover, accounting for 33% of the province industrial production value. Binh Phuoc is in the process of building its own cashew brand name.
Export Markets
USA 35%
China 20%
European 27%
Other countries 18%
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CULTIVATION AREA, PRODUCTIVITY (PERIOD 2008 – 2013)
CASHEW INDUSTRY POTENTIAL IN VIETNAM
Year
Land cultivated (ha)
Productive land (ha)
Productivity (tons/ha)
Yield (tons)
2008
157,526
131.866
1.16
154,077
2009
156,054
143.481
0.93
134,545
2010
155,746
144.413
0.96
139,982
2011
148,020
140.711
1.07
150,592
2012
143,067
138.982
1.07
149,424
June 2013
139,636
137.921
1.02
140,680
Cashew production process
Improvement of value for cashew products
Raw cashew collection -> Removal of nutshell and peel -> Production of final product (cashew candy, snacks, cashew milk)
Invest to produce value-added products: Salted/ roasted /spicy /assorted cashew, Candy, cookie, Cashew powder..
By-products: Nutshell oil (the shell accounts for 60% of the nut): refined oil, cardanol oil, wood adhesives..
Invest for raw cashew storage facilities and equipment for nutshell oil production (2 companies are investing for cardanol refineries in Baria-Vungtau and Dong Nai provinces)
Binh Phuoc Cashew tree is regarded as a major plant with competition advantage and the government encourages farmers to implement intensive cultivation with a view to improve productivity and quality. Situation: • Cultivation area is diminishing in recent years -> Need to upgrade cashew plantations, plant more trees on bare hills. • Cashew yield is also decreasing because of lowering productivity -> Higher imports of raw cashews.
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Cashew 18 | www.myle.vn
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THE CASHEW MARKET The year 2013 was characterized by price stability on kernels and reduced volatility on RCN The stability of prices has rebuilt confidence among buyers and discouraged speculation in kernels though the RCN market still thrives on speculative activity. The USA was the star performer with imports in 2013 going up by 19% to end of November, the second best year of all time.
VIETNAM’S CASHEW TRADE FLOWS
We may well see an even better demand trend in 2014, if USA buyers decide to promote again on the basis of the price stability and relatively attractive pricing. In Europe, imports were positive. Indian demand also showed continued good growth with some indications of price sensitivity emerging based on Rupee depreciation against the US$.
5.00 4.75 4.50 4.25
Total imports of RCN: 31 thousand tonnes Côte d’Ivoire 37% Cambodia 17% Indonesia 15% Nigeria 12% Ghana 8% Guinea - Bissau 4% Benin 3% Other 4%
VIETNAM Local production of RCN: 340 thousand tonnes
Total exports of cashew kernels: 176 thousand tonnes USA 29% China 22% Netherlands 14% United Kingdom 4% Russian Federation 2% Canada 2% Other 19%
4.00 3.75 3.50 3.25 3.00 2.75 2.50 2.25 2.00 1.75 1.50 1.25 1.00 Oct-13
Jul-13
Apr-13
Jan-13
Oct-12
Jul-12
Apr-12
Jan-12
Oct-11
Jul-11
Apr-11
Jan-11
Oct-10
Jul-10
Apr-10
Jan-10
Oct-09
Jul-09
Apr-09
Jan-09
Oct-08
Jul-08
Apr-08
Jan-08
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Total imports of cashew kernels: 2 thousand tonnes Singapore 18% Area Nes 15% Netherlands 14% Côte d’Ivoire 10% India 9% Nigeria 9% Indonesia 5% Tanzania 5% Mozambique 5% Brazil 4% Other 8%
Total exports of RCN 0.1 thousand tonnes USA 50% China 22% Australia 21% Malaysia 5%
Sources Import & export data: ITC Trademap, 2012 Production data: Red River Foods, 2011 www.myle.vn | 21
LARGER PRODUCERS OF RAW CASHEW
LARGEST GLOBAL EXPORTERS OF CASHEW KERNELS
BAL CONSUMPTION OF CASHEW KERNELS
LARGEST GLOBAL IMPORTERS OF CASHEW KERNELS
Between 2001 and 2011, global output of rawcashew increased steadily, with an interruption of growth in 2010. Global production is dominated by Asia, accouting for 50% of global production, followed by West Africa, which accounts for 34%. Both regions have increased their output between 2001 and 2011. While showe a gradual increase, West African output grew strongly, by 12% annually.
Being the main global cashew processors, Vietnam and India are the largest exporters of cashew kernels. Especially Vietnam managed to expand its cashew exports considerably in the past decade. However, since 2009 exports started to decline, party due to increased pressure on processing and a slowing down of global demand due to severe price increases.
• The global market for cashew kernels is growing steadily at an average of 7% annually.
The EU/EFTA and the United States are by far the largest importers of cashew kernels, accounting for 36% and 33% of the global imports, respectively. In 2011, total EU/EFTA cashew kernel imports amounted to 114 thousand tonnes, equivalent to €679 million.
200,000
(tonnes)
• India is the largest global consumer of cashew. kernels, accounting for 30% of total consumption and amounting to approximately 150 thousand tonnes in 2010. • Although Vietnam is one of the largest processors of cashew, it has a small domestic market for cashew kernels. Only 5% of its output in consumed domestically.
(in tonnes, 2011)
180,000 160,000 140,000 120,000 100,000 80,000 60,000 40,000 Source: Red River Foods, 2011
20,000
India 28%
Guinea-Bissau 6%
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2011
Mozambique 4%
2010
Ivory Coast 17%
2009
Other Latin America 0.3%
Other Wesr Africa 3%
2008
Other Asia 4%
2007
Brazil 7%
2006
Nigeria 4%
2005
Indonesia 4%
2004
Other East Africa 0.5%
2003
Benin 4%
2002
Vietnam 14%
2001
Tanzania 4%
Source: ITC Trademap, 2012 Vietnam
India
Netherlands
Brazil
Tanzaia
Source: Fitzpatrick, 2010
Source: ITC Trademap, 2012
Other 4%
Middle East 6%
Non - EU Europe 4%
Other 2%
India 30%
North America 25%
Afiraca 3%
Netherlands 13%
China 5%
EU 17%
Brazil 2%
Fermany 8%
Other Asia 5%
UK 4%
Other EU/ EFTA 12%
Arab Emirates 5% China 3%
Other Europe 3%
Japan 2%
US 33%
Other Asia 8%
Canada 3%
Australia 4%
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EU/EFTA CASHEW KERNEL IMPORT DEVELOPMENT
Within the EU/EFTA market, the Netherlands is by far the largest importer, accounting for 36% of total imports, followed by Germany (21%) and the UK (10%). This figure shows that cashew kernel imports of many countries fell considerably after their peak in 2007. Only German and Italian imports continued growing.
60,000
(in tonnes)
50,000
40,000
30,000
20,000
10,000
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
Source: ITC Trademap, 2012
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Investment 26 | www.myle.vn
Based on development potential and future prospect, the Company is looking for cooperation, joint venture with partners to invest and expand the business with a view to: • Increase Capital for collection and storage of raw cashew. • Invest for modern equipment, upgrade production facilities, increase production output > replacing manual labor by mechanical equipment. • Process and produce value-added products (cashew milk, roasted & salted cashew, snacks, candies..) to supply to supermarkets abroad for higher profitability.
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MYLE MAIN OFFICE AT Highway 741, Long Hung Commune, Bu Gia Map District, Binh Phuoc Province, Vietnam Contact details: Ms Tran, My Tam Deputy director Mobile: +84.933.232.203 Email: mytam1708@gmail.com | Email: mytam@myle.vn www.myle.vn