The Central Highlands province of Dak Lak plans to raise the rate of processed coffee products such as powder coffee and instant coffee to 15% of the local coffee bean output by 2020.
It expects to increase the rate to 20-30% by 2030 to improve the added value of products from coffee – the biggest foreign currency earner in Dak Lak, according to Chairman of the provincial People’s Committee Pham Ngoc Nghi.
To that end, the province has moved to create a favourable investment climate for both domestic and foreign businesses, particularly those specialising in roasting and grinding, to attract investment in processing factories.
The provincial authorities plan to assist coffee processors in applying advanced post-harvest and processing techniques, as well as modern corporate governance process.
The province also offers support to organisations, enterprises and cooperatives to build brands, trademarks or geographical indications for processed coffee products, Nghi said.
Dak Lak has nearly 204,000 hectares of coffee and produces at least 450,000 tonnes of coffee beans each year – the biggest area and output of coffee in Vietnam.
However, there are only 145 processing facilities in the province with combined design capacity of over 32,100 tonnes, accounting for 5.55% of the local coffee bean output.
In 2016, Dak Lak produced only 28,000 tonnes of processed coffee products, including 23,000 tonnes of powder coffee and 5,000 tonnes of instant coffee.
It exported 4,520 tonnes of instant coffee, making up 2.3% of total coffee bean export volume, bringing home more than US$26.8 million which accounted for 7.5% of the province’s coffee export revenue. The remaining processed coffee was sold in the domestic market.
Nghi acknowledged that most locally-based processing companies are private firms whose market access and product advertising capacity remains modest.
Meanwhile, local policies are not attractive enough to persuade Vietnamese and foreign enterprises to invest in coffee processing plants.