Viewed from the investor's perspective: TH Group

(Baonghean)High-tech agriculture is not entirely new in Vietnam. Ho Chi Minh City and especially Da Lat (Lam Dong province) already have many agricultural production facilities following this approach. However, most of these facilities are small farms with limited investment capital, resulting in limited product output.

As for high-tech agriculture, with its large-scale farms, significant investment, and high output, which has created a breakthrough in agricultural production, perhaps only the TH Group has implemented it with its TH True Milk dairy farming and fresh milk production project in Nghia Dan, Nghe An province.

Although there may still be differing opinions surrounding TH True Milk, it can be said that in the near future, when high-tech agriculture becomes widespread in Vietnam, TH Group will be the pioneer in this endeavor.

For TH True Milk to achieve its initial success today and to pave the way for the future, one crucial condition is learning (and the quality of learning).

The key leaders and managers of TH Group have learned, have learned, and have put what they have learned into action.

First, they determined what to learn to help them develop new ways of thinking and doing things. Their focus was on learning the most advanced and modern techniques from leading countries and corporations worldwide in dairy farming, processing, and preserving milk. They learned not only about technology but also about management. They understood that advanced technology can only be most effective when managed using correspondingly advanced methods and tools.

Once they knew what they needed to learn, they sought out true "teachers." "True" here has two meanings: true knowledge and true dedication. Each of these true teachers taught them knowledge, technology, management, operations, and ultimately, practical skills to the farm's staff and workers.

The knowledge and technology they learned are closely linked to the equipment they purchased to build dairy farms and milk processing plants. These instructors are from many different countries: Israel, New Zealand, the Netherlands, the United States… At TH True Milk, you will see that all stages of dairy farming are the most modern in the world, all gathered here. The workers raising cows, milking cows, etc., also have college or university degrees. They are truly modern dairy farmers.

Does this statement, based on the success of TH True Milk, offer us insight into the importance of learning among the people of this academically-minded land?



Automatic milking line. Photo: Le Quang Dung

Following the success of its dairy farming and processing project in Nghia Dan, TH Group is moving towards implementing projects in wood processing, clean vegetable production (TH True VEG), and natural clean medicinal herbs and fragrances, with products including functional foods (60%), pharmaceuticals (30%), and cosmetics (10%), also in Nghia Dan.

The success of the TH Group is due to dedicated investors, government support, and advanced technology. However, a solution to the profit-sharing equation is still needed to achieve complete success. The interests of the enterprise (investors), the State, and the people in the project area—those who will donate land for growing feed for dairy cows, vegetables, medicinal herbs, and forests—must be harmonized and balanced.

Regarding the overall benefit equation, the TH Group has declared: "Placing the group's private interests within the common interests of the nation"... "Not seeking to maximize profits at all costs, but seeking to rationalize the group's interests at all costs." Thus, the solution to the overall benefit equation has been found. And that solution is accurate from both an economic and socio-political perspective. However, each specific project has its own unique benefit equation, and the aforementioned overall solution must be concretized with quantitative figures: how much will you get? how much will I get? and how much will others get?

According to TH Group's calculations, one hectare of land in Nghia Dan, if cultivated by farmers themselves, would yield a value of 50-70 million VND/year, and a maximum of 100 million VND/year. The same hectare, if handed over to the group for exploitation, would be worth 500 million VND, even 1 billion VND or 1.5 billion VND/year. These figures are undeniable. However, the question arises: What do the people gain immediately after handing over the land to the project? Especially when they no longer have land as their primary means of agricultural production, what will they do to earn an income, to survive, to develop? There are still concerns about this. And the fact that the land allocation to TH Group's projects in Nghia Dan is not entirely satisfactory is precisely because of this. Without a precise solution to this specific benefit equation (both economic, political, and social), the success of these projects will certainly be severely limited. There is a principle here: both investors and residents in the project area must share both responsibilities and benefits. First, they must share responsibilities, so that ultimately there are benefits to share and be shared. Any violation (regardless of the cost) will not be accepted by society.

Specifically for the wood and fiberboard processing plant project with a capacity of 8,800 m3 of lumber and 400,000 m3 of MDF fiberboard, TH Group has invested $500 million, possesses the most modern technology (to be imported), has a team of senior experts directly managing and operating it, and is receiving strong support from the provincial, district, and commune authorities. The remaining issue for success is resolving the conflict of interest between the plant and the local people who grow the raw materials.

Our province has had many lessons learned from this problem: growing sugarcane for sugar factories, growing tea for tea factories, growing pineapples for pineapple processing factories… The problem of balancing the interests of wood processing factories with the people who plant raw material forests needs to be studied and referenced from these lessons. Whether needing 100,000-120,000 hectares of raw material forest is difficult or not depends on solving the problem of balancing the interests of the factories and the people who plant the raw material forests. The solution to this problem is not difficult in some respects. In principle, if people who plant forests and sell raw materials to factories earn significantly higher incomes than from other crops, they will certainly dedicate their land to forest planting without fear of competition from other crops. To achieve this, two main issues need to be resolved:

Firstly: Provide support and advice to forest farmers regarding capital, tree species, and planting, care, and harvesting processes to achieve higher and increasingly higher timber yields per hectare compared to current forest planting methods. According to data (which may not be entirely accurate), one hectare of planted forest with a 7-year cycle currently yields 70 m³/ha. If the factory can help forest farmers increase their productivity beyond this figure, their income will increase accordingly.

Secondly: There should be a convenient procurement method coupled with a suitable transportation method that benefits forest growers. Along with that, there should be a favorable purchase price for those who grow the raw materials.

TH Group is arguably the only economic conglomerate in Vietnam currently investing heavily in agriculture using high technology. It's a pioneering enterprise paving the way for the modernization of agriculture in our province and the entire country. Along this path, the group has achieved successes that could be considered "unexpected." However, reaching the ultimate goal still requires much work and many necessary steps, including finding solutions to the overall and specific benefit equation. Is that the case?

Truong Cong Anh