Vietnam

Singapore’s Jayangti Pte. Ltd. is investing VND288 billion (US$16.2 million) in a new instant coffee plant in Dray Bhang commune, Cu Kuin district, Dak Lak province in the coffee-rich Central Highlands .

The plant, which is expected to break ground in June and to be completed in May, 2011, will have an annual capacity of 6,000 tons of instant coffee and will be the largest facility of its kind in the country.

Dak Lak has been trying to attract foreign investors to the region for some time and has given growers easy credit to upgrade storage and processing equipment in an attempt to raise the quality of the coffee produced locally and make it more attractive for exporters.

This latest investment follows the opening in 2008 of a coffee processing plant with an annual capacity of 100,000 tons of coffee beans in Dak Lak’s capital city of Buon Ma Thuot by Netherlands-Vietnam Co. Ltd. using capital raised by foreign investors.

Dak Lak is capable of processing only 20% of the 400,000 tons of coffee beans it produces and accordingly it earns between US$50 to US$100 a ton less for its coffee than other regional producers, according to the processing department of the Ministry of Agriculture and Rural Development To redress this imbalance, Dak Lak province is aiming to maintain its coffee-growing acreage at 150,000 ha and its production at something around 400,000 tons while increasing the percentage of processed coffee to 15%-20% of its bean output by 2015.

Meanwhile, year-on-year Dak Lak province coffee exports from January to May have dropped by 30% to 125,000 tons of coffee with an export value of US$192 million.