Nguyễn Trung Kiên, CEO of Nafoods International, who brought Vietnamese purple passion fruit to 50 countries worldwide, accounting for 9% of European passion fruit import volume, has always nurtured a vision of a sustainable green agricultural economy along Nafoods Group's value chain.
Nguyễn Trung Kiên
Nafoods is known for its exported passion fruit products. So to date, the product cassion fruit from Nafoods has been exported to how many countries? Which is the main market, sir?
Nafoods passion fruit is currently exported to 50 countries worldwide, including markets in Europe, the Americas, Australia, Canada, Japan, and South Korea… Europe is the main market, accounting for more than 70% of Nafoods' exports. In particular, Nafoods passion fruit holds an 8-10% share of Europe's annual imports of concentrate. Other markets—the United States, Canada, Australia, South Africa, Japan, and South Korea—account for 30% of Nafoods' passion fruit exports, but its market share and volume there remain small compared with competitors.
What is the greatest difficulty in exporting passion fruit today?
Although a key agricultural product that is easy to cultivate and economically rewarding, passion fruit faces many obstacles and difficulties in reaching export markets worldwide.
First, Vietnam grows the Asian purple passion fruit variety, while the global market is accustomed to and prefers yellow passion fruit from South America: Ecuador, Peru, Colombia… When exporting, we therefore spend considerable time on branding and marketing to convince customers that purple passion fruit is not only comparable in quality but superior to yellow passion fruit.
Second, Vietnamese passion fruit exports face significant tax disadvantages worldwide. Currently, Vietnam's biggest competitors in passion fruit concentrate in the European market are Ecuador and Peru. Their passion fruit exports to Europe enjoy a 0% tariff thanks to trade agreements between the parties. Meanwhile, the Vietnam–EU Free Trade Agreement has not yet been approved, so our passion fruit exports to the EU still face import duties of 7-9%, putting them at a substantial price disadvantage against competitors.
In the coming period, Nafoods will step up exports to promising emerging markets such as China, Japan, South Korea, Southeast Asia, Australia, New Zealand and South Africa. However, Europe, the United States and Canada remain its traditional markets with the greatest consumption capacity. We therefore hope Vietnam will soon approve trade agreements to strengthen the competitiveness of Vietnamese products and businesses in the global market.
What is Nafoods’ goal in 2016 for conquering the global passion fruit export market?
In 2015, Nafoods Group exported more than 2,000 tonnes of concentrated passion fruit juice. The target for 2016 is to export 2,500 to 3,000 tonnes. We remain focused on our main European market while developing the US, Australian, Canadian, New Zealand and Japanese markets, all TPP member countries. I believe the TPP is a major opportunity for Vietnam.
However, Nafoods' biggest goal in 2016 is to capture 30% of Europe's imported passion fruit concentrate volume. It will also gradually increase its share in other markets, especially TPP and ASEAN members, to balance exports between Europe and elsewhere at 50-50%. Europe currently accounts for 70% of Nafoods' exports.
Nafoods has many products, yet you chose passion fruit as the main export product. Why?
When Nafoods identified its core products, we saw that many fruit and vegetable products faced intense competition from China, Thailand and the Philippines. Only products such as passion fruit gave us a competitive advantage. With other products, such as pineapples, lychees and bananas…, we did not have the competitive advantages of regional rivals. We were also at a disadvantage in taxation. Furthermore, while developing passion fruit cultivation, we found it to be the most suitable crop in Vietnam. Although passion fruit first appeared in Taiwan, Thailand, Malaysia and China 30 years ago, Vietnam is still the most efficient place to grow it.
To reach its target of 30% of Europe's passion fruit market, Nafoods must have a strategy for developing its growing areas. What will it do next to maintain and strengthen passion fruit's number 1 position?
Nafoods' passion fruit concentrate is widely used in Europe and is becoming increasingly well known. Nafoods' purple passion fruit product grows by no less than 30% annually. To meet market demand and achieve its goal of capturing 30% of the European market's volume, Nafoods must first develop a sustainable raw material growing area with systematic, long-term planning to ensure higher yields and stable annual concentrate production of 5.000-7.000 tonnes.
Nafoods' development direction includes planning 3 passion fruit regions: the Central Highlands, Nghệ An, and Mộc Châu. Nghệ An and Mộc Châu will supply the factory in Quỳnh Lưu, Nghệ An, while Gia Lai in the Central Highlands will supply the new factory beginning construction in Long An.
To strengthen and maintain passion fruit’s number 1 position, first, Nafoods built a global, sustainable green agricultural value chain for passion fruit, encompassing seedlings, cultivation, development, purchasing, processing and exporting passion fruit products. Nafoods is the first company with a passion fruit seedling institute, providing disease-free seedlings throughout Vietnam through technology transferred from Taiwan. Second, Nafoods has an agricultural development center that supports both its own cultivation and farmers in developing raw-material growing areas. Third, Nafoods continuously invests in technology to develop factories that process and produce quality products meeting the requirements of the most demanding markets. Fourth, Nafoods invests in branding passion fruit so that mentioning passion fruit brings purple passion fruit to mind, and mentioning purple passion fruit brings Nafoods Vietnam to mind.
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