Investing in preservation and processing to reduce risks, increase value and complete the agricultural production and consumption chain has been a long-standing topic. In the current context, investing in cold storage and deep processing is becoming more urgent.

However, the construction of cold storage systems has not received due attention.

Improve the quality of agricultural products

Agricultural products are one of the important industries, contributing positively to the overall export turnover of the whole country, the annual output of Vietnamese agricultural products always maintains growth. Accordingly, agricultural products not only meet the consumption needs of 100 million people in the country but also contribute significantly to exports, earning foreign currency for the economy.

However, currently, the export of Vietnamese agricultural products still has many limitations, for example: the preservation, preliminary processing, and processing systems are still lacking, not modern and not synchronized, leading to quite high post-harvest losses. According to statistics, the loss rate of agricultural products accounts for 25-30%. This has affected the competitiveness of Vietnamese agricultural products. Many times, orders have been returned by partners, seriously affecting the competitiveness in the market, the brand, and reputation of businesses as well as the country.

To solve this situation, experts say that it is necessary to use cold storage to preserve agricultural products. Because, any unit that builds a good product preservation system will be more proactive in storing goods for partners as well as serving its own processing.

Accordingly, after harvest, agricultural products are stored in cold storage, the products will be preserved longer without having to be sold immediately. This will help regulate output, bring products to many locations, especially export transportation with longer preservation time. This entire chain allows us to balance supply and demand, have a better position to negotiate selling prices. In particular, we can completely export items to other markets at better prices. Agricultural products, especially fruits, have seasons, and are sometimes mass. Having cold storage will reduce losses, maintain prices, and extend the time to sell in distant markets.

Ms. Nguyen Thi My Dung in Xuan Bao commune (Cam My - Dong Nai), has been working in agriculture for more than 30 years, so she understands the concerns of farmers. When there is a shortage of goods, traders search everywhere, competing to buy, but when the harvest season is bad, more than half of the agricultural products are classified as waste, with low prices. There were times when agricultural products were left to wilt and rot in the garden because they could not be eaten, and no one bought them. The idea of ​​investing in cold storage was also born from that. After many years in the profession, Ms. My Dung currently has 5 cold storages, with an average capacity of 4 tons/warehouse. Frozen durian and jackfruit products are sold to confectionery and beverage companies for export, fresh and dried. During the harvest season, more than 100 workers do jobs such as operating cold storage, harvesting and loading goods, and peeling fruit.

Also in Cam My district, Toan Thang Import-Export Trading Company Limited is one of the successful examples thanks to the gradual investment in cold storage to preserve and process durian products. At a time when fresh fruit products are facing difficulties in consumption due to the severe impact of the Covid-19 epidemic, the Company can still process 30 - 50 tons of fresh durian per day and purchase and freeze hundreds of tons of fresh durian. Currently, the enterprise has exported products to China; Hong Kong, Taiwan (China); Thailand.

According to Mr. Truong A Vung, Director of Toan Thang Import-Export Trading Company Limited, this is a premise for the enterprise to continue to upgrade quality standards, expand processing scale, and consider exporting to more demanding markets such as Canada, the United States, Japan, etc.

In order to serve the agricultural transportation sector and promote the export of fruits and agricultural products to the world market, since 2019, THACO has put into operation a fruit cold storage facility with an area of ​​4,800m2, with a capacity of 2,400 tons at Chu Lai Port (Quang Nam).

The investment in the cold storage system has contributed to promoting the development of agricultural logistics services and completing the value chain throughout THACO's agricultural sector; at the same time, meeting the urgent need for transporting agricultural products in the Central Highlands - Central region, promoting the export of Vietnamese agricultural products, gradually building Chu Lai Port into a center for receiving and transporting exported fruits.

Lack of cold storage

In fact, the development of cold storage in our country is still limited, supply cannot meet demand. There are places where there are too many projects, and there are also localities that have not found a modern cold storage with enough capacity to receive and preserve export goods.

According to food and foodstuff enterprises, currently, the number of cold storage and preservation warehouses is still very limited, greatly affecting the storage and transportation capacity of enterprises. That has reduced the value of products, affecting transportation and storage time. Meanwhile, the Government and localities still do not have mechanisms and policies to support, encourage and invest in this field as a common national policy from the Central to the local level.

Toan Phat Refrigerated Warehouse - Ben Luc, Long An

From this, it can be seen that the use of cold storage to preserve agricultural products brings superior results compared to traditional preservation methods. Helps reduce loss rate, improve quality, ensure food hygiene and safety. Provides the market and consumers with clean, low-cost, and healthy products. In addition, it helps businesses and investors gain high profits.

Therefore, to move towards large-scale, professional and stable agricultural production, investing in cold storage to preserve products after harvest as well as during processing is very important.

Mr. Truong Dinh Hoe, General Secretary of the Vietnam Association of Seafood Exporters and Producers (VASEP), said that in the seafood industry, cold storage capacity has not met the demand, so when the Covid-19 epidemic occurred, the shortage of warehouses became more serious, affecting the export and storage activities of businesses.

According to Mr. Hoe, cold storage is not only a necessary condition for businesses to purchase all shrimp and fish produced by farmers, but also helps businesses to reserve large sources of goods, promptly meeting export contracts when market demand increases.

According to statistics, the country currently has 48 cold storage facilities providing agricultural and aquatic product preservation services with a capacity of about 700,000 pallets (equivalent to 700,000 tons) and thousands of cold storage facilities with a total storage capacity of an estimated 2 million tons of products serving certain markets, mainly for export. In the fruit and vegetable industry alone, the annual harvest output reaches more than 15 million tons. While the total capacity of cold storage facilities is less than 2 million tons, this figure is quite different from actual demand. In the context of difficult export, the lack of cold storage facilities puts businesses under a lot of pressure when storage costs increase, goods are stagnant without storage, causing significant losses.

The current status of cold storage facilities in the Mekong Delta and Southeast only meets 30% of market demand. In particular, the Mekong Delta has only 6 small-scale cold storage facilities, and smart cold storage services have not yet developed.

Mr. Do Hoang Phuong, Director of Global Import-Export Food Joint Stock Company (Bac Giang), said that the company has invested in a cold storage with a capacity of about 700-800 tons of lychees, but there were times when there was not enough storage space so they had to rent a cold storage from another company, leading to increased production costs.

In addition, there are tens of thousands of refrigerated vehicles and refrigerated containers serving the transportation of agricultural and aquatic products... However, the number of cold storage facilities has not yet met the needs of preserving agricultural and aquatic products for fresh preservation and export processing.

Along with that, the warehouse infrastructure at border gates has not yet met the needs of storing import and export goods, especially the cold storage system. There is a lack of equipment for lifting, lowering, loading and unloading goods. Currently, the loading and unloading of agricultural products is mainly done manually, causing significant impacts on product quality as well as import and export activities.

In addition to agricultural products, seafood export is also the industry that occupies the largest area of ​​cold storage. Currently, the supply of cold storage is concentrated in the southern provinces, of which about 60% of the market share is held by foreign investors.

Ms. Trang Bui, Senior Director of JLL Vietnam Market, said that because the Vietnamese cold storage market is still quite fragmented, cold storage service providers with relatively large market shares such as Emergent Cold, Minh Phu Gemadept, ABA, Hoang Phi Quan, Lotte, An Viet Cold Storage, Phan Duy, Satra, Meto, Alpha, Transimex... can only meet a very small part of the market, and have not yet integrated many services in cold storage.

Why is cold storage development difficult?

The benefits of investing in agricultural product preservation, including cold storage systems, are clear, but not many farmers, cooperatives, and even businesses are interested in developing this system.

Analyzing this issue, ThS. Tran Thi Anh - Nguyen Thi Tho (Hanoi University of Industry) shared that the majority of logistics personnel in agricultural services are still very inexperienced and lack understanding of the specific characteristics of agricultural products, so many businesses consider cold storage chains as expensive, ineffective investments with low added value..., leading to the situation where agricultural supply chains are interrupted and dispersed, causing our country's agricultural products to lose value, increase prices when consumed domestically and reduce competitiveness in the international market...

On the other hand, the characteristics of agricultural products need to ensure freshness and only have value for a short period of time, so logistics services require a different level of professionalism and investment in warehouse and yard infrastructure is also more expensive than many other types of goods..., therefore, many logistics businesses are not "interested" in the field of cold storage for agricultural products. All of the above factors have been and are hindering the development of Vietnam's agricultural product exports.

On the other hand, the characteristics of agricultural products need to ensure freshness and only have value for a short period of time, so logistics services require a different level of professionalism and investment in warehouse and yard infrastructure is also more expensive than many other types of goods..., therefore, many logistics businesses are not "interested" in the field of cold storage for agricultural products. All of the above factors have been and are hindering the development of agricultural product exports in Vietnam.

From the perspective of cooperatives and small and medium enterprises, the development of cold storage is "stuck" in the cost aspect, because to develop such cold storage, a large amount of capital is needed. Specifically, the cost is up to tens, even hundreds of billions of VND, beyond the capacity of cooperatives and small and medium enterprises.

Photo: Toan Phat

Thanh Binh Cooperative (Trang Bom - Dong Nai) currently has 70 hectares of bananas. In addition, the Cooperative also buys output for many farmers in the region. The Cooperative is implementing a plan to build a processing plant. Regarding the investment in a cold storage system, Director of Thanh Binh Cooperative Ly Minh Hung said that each day the Cooperative exports more than 20 tons of bananas, but the cold storage capacity for preservation is only 5 tons, which is "not enough". "We are working with the bank to find a way to arrange capital, invest in a system of production, processing factories, and product preservation warehouses, but at the present stage, this is still a difficult problem," Mr. Hung shared.

Similarly, Mr. Dam Van Dua, Director of Dong Cao General Service Cooperative, Trang Viet Commune (Me Linh - Hanoi), confided that the Cooperative really wants to invest in a cold storage system to preserve, pre-process, and process agricultural products, but does not have the economic potential.

In particular, in some localities, land funds for building cold storage and processing agricultural products after harvest are also an obstacle for cooperatives and small and medium enterprises.

Specifically, each month, Uyen Diep Vietnam Durian Cooperative, Ea Yong Commune (Krong Pak - Dak Lak) purchases and exports thousands of tons of fresh durian. In the near future, the unit plans to process more frozen products. However, finding land funds for cold storage at this time is not easy.

Mr. Nguyen Tien Diep, Director of Uyen Diep Vietnam Durian Cooperative, said: “Enterprises are searching, buying, and building by themselves, there is no planning for warehouses for the durian industry. We hope to have a plan for a certain stage of production and separation according to standards”.

Need support policy

Preserving agricultural products to reduce post-harvest losses always plays an important role in agricultural production. To optimize agricultural productivity, investment in cold storage systems should be considered a top priority by enterprises and cooperatives.

Therefore, the State needs to plan and attract investment in building agricultural logistics centers and cold storage for classification, preservation, and preliminary processing to ensure the quality of fresh agricultural products and increase the added value of products. Increase investment in logistics infrastructure for agricultural products, especially in key and concentrated agricultural production areas. In particular, focus on investing in cold chains (cold storage, refrigerated trucks, refrigerated containers, etc.). Along with that, it is necessary to form large-scale raw material areas and processing factories to serve exports.

Providing a solution to this problem, Mr. Dao Quang Vinh, Director of Vinh Anh Food Joint Stock Company (Thuong Tin - Hanoi), said that the authorities need to advise the Government to have a policy with preferential loan interest rates for logistics enterprises, agricultural product processing and preservation to promptly support logistics services and preservation of agricultural products.

In addition, some experts also said that in order to achieve the highest efficiency when investing in cold storage construction, localities need to plan cold storage systems suitable for each production area and the characteristics of each type of agricultural product such as lychee, dragon fruit, longan, etc., not to be spontaneous as is currently the case. Along with that, it is necessary to prioritize investment in small-sized cold storage for cooperatives and small and medium-sized enterprises so that these units can proactively purchase agricultural products for farmers in the context of large harvest volumes.

According to Deputy Minister of Agriculture and Rural Development Phung Duc Tien, to increase the added value of agricultural products, it is necessary to implement many solutions, including prioritizing the construction of cold storage. The Ministry will propose to the Government to have mechanisms and policies to support taxes and loan interest rates for enterprises investing in cold storage systems. In the immediate future, the Ministry of Finance needs to consider exempting taxes, wharf rental fees, electricity bills, and cold storage services for enterprises processing agricultural, forestry, and aquatic products...

In addition, continue to improve and maintain the development of transport infrastructure, the system of large ports, and deep-water ports to ensure that large-capacity ships can operate. Improve the operational efficiency of existing ports to ensure that vehicles can circulate smoothly. Thereby, shortening transportation time as well as transportation costs for goods, especially agricultural products.

Source: Kinh Te Nong Thon Newspaper