December 15, 2010, Vinacafé Bien Hoa (Vinacafé) held a groundbreaking ceremony for an instant coffee processing factory with capacity of 3.200 tons/year at Long Thanh Industrial Park, Dong Nai province. This not only marks an important development of Vinacafé but also has a significant implication on Vietnamese coffee sector, especially instant coffee processing sector. Vietnam Business Forum’s reporter Quoc Hung talks with Mr. Pham Quang Vu, General Director of Vinacafé.   Congratulation on the groundbreaking ceremony for a 3.200 tons/year instant coffee processing factory, how does this event mean to Vinacafe’s operation? The project adds another important milestone to Vinacafe’s development history – an accumulation of quantity in preparation for a leap in quality. The project is built on a land of 4, 95 hectares with a total investment capital of VND 500 billion. It is equipped with the most advanced European technology. The factory is 4 times as big as the second one & 40 times as big as the first factory of Vinacafé. This shows that Vinacafe is always going beyond itself & achieving great progress.

More important, when this third factory starts operation in quarter 1 of 2013, the total instant coffee volume of Vietnam will be twice as much as that at the moment.

How many tons of coffee beans are necessary for this 3.200 tons/year instant coffee factory & what values will this product bring back?

With such a large capacity, it requires about 9000 to 10.000 tons of coffee beans per year. This amount is still modest compared with total coffee volume of Vietnam at the moment but it promises to bring high added values. If we export coffee beans at the moment at US$ 1.800/ton, the added value of instant coffee can be 10 times larger than that.

What are the targeted markets of Vinacafe when the 3rd factory starts operation?

When this 3.200tons/year instant coffee processing factory starts operation, it is expected to serve our traditional markets such as US, China & Asean. In addition, we will export to European markets & create prerequisites for export of our next factories.
 

How do you evaluate competitiveness of Vinacafe’s products in export markets?

Competition is an indispensable factor in export markets. For us, competition is unavoidable. But we are confident of Vietnamese products in general & our Vinacafé products in particular, especially instant coffee products. With long-standing experiences of coffee exporting activities, plus modern technologies, we believe Vinacafe will create good quality products that are highly competitive in the world market. At the same time, Vinacafe has experienced in promotion and marketing activities in foreign markets, especially in China & US, so we believe that Vinacafé will achieve success in export markets.
 

Vinacafé is a strong brand with over 50% market share of instant coffee sector, according to you, what are Vinacafe’s current strength?

We have now many strong points. Firstly, Vinacafé has a long history of producing coffee, a wide experience of processing instant coffee; we own an intellectual property in processing instant coffee that other enterprises do no have. Secondly, due to long history of establishment and development, Vinacafé know what equipment is modern, advanced as well as what technology is for today or for tomorrow. We bring these technologies, equipment & our expertise into the production process & improve quality of products. Thirdly, we are in a corporation specializing in planting & processing coffee, so we have an abundant material source and from this source, we can be proactive in input quality.
 

What is your assessment on the development trend of current instant coffee market?

 
There is an increasing trend of using instant coffee in the world and especially in Vietnam. Back in time, we can see a fast growth of Vietnamese instant coffee from 1990s till now. In 1990s, Vinacafé was the only instant coffee processing factory in Vietnam, until 1995, there were some other factories and many factories are now built. One thing we can easily feel is that instant coffee products become a daily drink at government offices, replacing of tea. In short, the market share and the growth rate of instant coffee are very very high at the moment.
 

Thank you very much!

Reported by QUOC HUNG