Dairy diplomacy yields stronger ties with Vietnam

After suffering decades of civil war and foreign incursions, as well as a decade of Stalinist rule that ended only in 1986, Vietnam has become one of the better-performing economies in the developing world, especially in agriculture, and Israeli technology has been a cornerstone of that progress.

The two countries are currently working on a free trade agreement, and to date Israel has trained hundreds of Vietnamese in agriculture, aquaculture, livestock, dairy milk production and education.

Providing assistance in dairy milk production, Israel’s Afimilk, supplied Vietnam with 30,000 cows, which had already produced 500,000 liters of milk a day by the end of 2012.

Economic relations are set to move to the next level, after a visit last month by a delegation of Israeli agricultural technology companies. Led by the Israel Export Institute and with the assistance of the Commercial Office of the Ministry of Economy in Vietnam, the delegation visited companies in Ho Chi Minh City (Saigon) and met with clients and potential business partners, and participated in a well-attended seminar for Vietnamese companies on importing Israeli technologies, and exporting agricultural products to Israel.

The visit comes at a critical time for Vietnam’s agricultural sector, according to Tsafrir Asaf, the commercial attache of Israel’s Economics Ministry in Vietnam. Agriculture has been a major engine of growth for Vietnam, where the economy has grown by an average of 5% over the past decade.

Vietnam is a world leader in exports of rice, coffee, seafood and more. However, these gains have been achieved at a high cost, said Asaf, with poor farming techniques degrading the quality of water resources and land, causing major outbreaks of disease in fish and animals, and eventually leading to a decrease in agricultural production in recent years.

Vietnam realized that it needed better farming technology in order to increase production levels, and as a result the government is keen to increase trade relations with Israel, said Asaf. “Vietnam has a clear understanding at all governmental levels that their objectives will be achieved only through the implementation of advanced technologies in all areas of the agricultural sector. The central government and the provinces are trying to promote this process, and many private companies are also examining ways to improve the product quality of their yields.”

“These processes have produced many opportunities for Israeli companies, particularly in aquaculture and post-harvest,” said Asaf, adding that, traditionally, breaking into the Vietnamese market is a slow process for foreign companies – and the fact that Israel was there “first,” having already build up a relationship with the government and many private companies, gives Israeli firms a better chance of getting chosen for contracts and projects.

Ohad Cohen, Director of the Foreign Trade Administration in the Economics Ministry said that Israel is “witnessing a steady growth in its relative share of exports to Asia. In 2012, Israeli exports to Vietnam doubled and crossed the billion dollar mark.” Companies in the delegation signed a number of agreements with local Vietnamese governments and companies, said Cohen, and more Israeli companies are expected to visit in the summer, he added.