Smart Agriculture: Creating a Closed-Loop Value Chain

From losing everything, Mr. Vu Manh Hung has, in just 10 years, transformed into an "agricultural magnate" in Binh Phuoc province. He successfully led the effort to export chicken raised in Thuan Loi commune, Dong Phu district, Binh Phuoc, to the highly demanding Japanese market. His remarkable journey exemplifies resilience and pioneering success in the agricultural sector.

Hung Nhon Group: From Humble Beginnings to High-Tech Agricultural Powerhouse

This success is largely attributed to the astute investment in transforming traditional agriculture into a high-tech, closed-loop production value chain, integrating numerous domestic and international partners, all controlled by stringent European standards.

From Zero to Agricultural Mogul

Mr. Vu Manh Hung, Chairman of the Board of Directors and General Director of Hung Nhon Group, started from humble beginnings, working as a bus assistant and a bricklayer to make a living. However, he always felt these jobs were precarious and sought better opportunities. This led him to Binh Phuoc province to seek his fortune in entrepreneurship.

After accumulating a small amount of capital, Mr. Hung quickly identified agriculture as a suitable path. He swiftly adopted the "cold-house" chicken farming model, a burgeoning sector in the Southeast region.

Unfortunately, his initial foray into entrepreneurship was met with a devastating setback. A severe disease outbreak in 2009-2010 wiped out all his capital. However, adhering to the adage, "failure is the mother of success," Mr. Hung remained undeterred. He borrowed more capital and reinvested, this time meticulously applying German technology to meet market demands.

This correct vision paved the way for a new direction and elevated his business to new heights. Mr. Vu Manh Hung stated, "When people saw me investing all my capital and borrowing heavily for agriculture, many thought I was crazy because farming always faces immense risks. But I decided that anything I didn't know, I wouldn't do, and I would only focus on agriculture."

Following that pivotal failure, Mr. Hung rebuilt his business and achieved remarkable success, with his company now boasting an average annual growth of 20%. From a small-scale poultry farmer, his model has evolved into a leading group, exporting various agricultural products, including chicken meat, to international markets.

Mr. Hung's most significant breakthrough came in September 2017 when over 300 tons of Vietnam's first official broiler chicken were exported to the discerning Japanese market. These chickens were raised at Hung Nhon's farms, owned by Mr. Hung. He is among the few entrepreneurs who have invested millions of USD in high-tech farm systems, adhering to GlobalG.A.P. standards in Binh Phuoc province.

Minister Nguyen Xuan Cuong Praises Hung Nhon's Model

During a recent visit to Binh Phuoc, Minister of Agriculture and Rural Development, Mr. Nguyen Xuan Cuong, noted that Vietnam's agricultural sector achieves an export turnover of over $30 billion annually, with 10 product categories exceeding $1 billion in export value. However, a significant concern for the industry is the absence of livestock products among these top export earners.

Despite this, Vietnam possesses immense production potential. On average, the country can produce approximately 30 million pigs, 300 million poultry, and half a million dairy cows annually. This translates to about 5.2 million tons of meat, averaging 60kg per person, alongside 100 eggs, 10 liters of milk, and 80kg of fish per person annually. Yet, for many years, farmers have struggled with product sales, and agricultural exports, particularly in livestock, have lagged.

Upon inspecting Hung Nhon's fully automated, high-tech agricultural model, Minister Nguyen Xuan Cuong personally witnessed a company that invested in modern equipment from Germany's Big Dutchman Group for 28 breeding farms, creating a closed, automated "cold-house" chicken system.

Thanks to the application of "farm management and traceability" software, the entire cultivation process is digitized, allowing for full traceability of feed and water suppliers for the livestock. Specifically, the 20 broiler farms spanning 20 hectares supply 3 million chickens annually, while 8 laying hen farms employ the most advanced cold-house technology, yielding 320,000 eggs per day, or 130 million eggs annually.

After observing this investment model, the "commander" of Vietnam's agriculture and rural development sector highly commended Hung Nhon, stating that it is the first Vietnamese enterprise to master modern livestock technology. Minister Nguyen Xuan Cuong lauded the efficient and risk-reducing farming model, attributing its success to the formation of a closed value chain that enables Hung Nhon Group to export its products successfully.

Hung Nhon Group's Value Chain: A Strategic Breakthrough for Vietnamese Agriculture Exports

The success of Hung Nhon Group in exporting chicken to the discerning Japanese market is a direct result of its effective value chain partnership. This robust collaboration involves:

• De Heus LLC (Netherlands): Providing animal feed.
• Bel Ga Joint Stock Company (Belgium): Supplying breeding stock.
• Koyu & Unitek LLC (Dong Nai): Handling procurement, slaughter, and export to Japan.

This integrated chain creates a closed-loop system for producing clean chicken meat that meets strict European quality standards and satisfies the demands of even the most rigorous market, Japan.

Minister Nguyen Xuan Cuong affirmed: "Japan is a very strict market, so the fact that the linked chain of businesses, led by Hung Nhon Group, could produce and export chicken meat to Japan is a strategically significant success, opening a new path for Vietnamese agriculture. This demonstrates a promising outlook; if the Japanese market (the most difficult) can be accessed, then other countries will also follow. After chicken, Vietnamese pork, milk, and beef... can also be exported."

Agricultural Breakthrough in Binh Phuoc Province

With the goal of making high-tech agriculture a key economic driver, Binh Phuoc province is actively attracting capable enterprises to serve as models for economic development.

According to Mr. Nguyen Van Loi, Secretary of the Binh Phuoc Provincial Party Committee, the province is accelerating investment attraction into high-tech agriculture to create numerous products under Binh Phuoc's own brand. The province is already renowned as a "capital" for agricultural products such as cashew, pepper, and rubber.

By 2020, Binh Phuoc plans to establish four high-tech agricultural zones:

• Dong Xoai Town: 50 hectares
• Loc Ninh District: 500 hectares
• Hon Quan District: 500 hectares
• Dong Phu District: 50 hectares

These planned zones aim to form the most effective and highest-quality agricultural models to lead, link, and serve as hubs for building key local agricultural product brands. This strategy connects production with consumption, constructing value chains to maximize efficiency.

Binh Phuoc province is actively fostering technology transfer partnerships both domestically and internationally. The goal is to establish robust supply chains for safe, traceable food products. Concurrently, the province aims to build sustainable production and consumption regions by linking businesses, farmers, new-model cooperatives, consumers, and banks.

Prime Minister's Directives for Binh Phuoc's Agricultural Development

During a working session with key leaders of Binh Phuoc province in late August, Prime Minister Nguyen Xuan Phuc provided clear directives for the province's economic development. He emphasized the need to leverage the emerging trend of Agriculture 4.0, specifically focusing on smart agriculture and high-tech agriculture to achieve economic efficiency and create a breakthrough for Binh Phuoc.

Furthermore, the Prime Minister oriented Binh Phuoc to concentrate on developing smart agriculture and in-depth processing of agricultural products. This strategy also involves creating high-quality products that possess a distinct competitive edge compared to those from other localities across the country.

Prime Minister Nguyen Xuan Phuc stressed that Binh Phuoc must develop a diverse agricultural sector, serving as a national model. This approach is expected to contribute significantly to successfully achieving poverty reduction goals, ultimately enabling the province to become financially self-sufficient.

Theo Vietnam+