Investing in a modern processing factory, helping the Biovalley organic cashew brand reach further
Investing in a modern processing factory, helping the Biovalley organic cashew brand reach further
Truecoop, BioValley’s organic cashew cooperative, has established partnerships with farmers across three districts in Ninh Thuan province: Ninh Son, Bac Ai, and Thuan Bac. Together, they are cultivating cashews that meet the stringent organic standards of the US (USDA), EU, and Japan (JAS).
Sustainable Production
Mr. Huynh Van Thoi, Vice Chairman of Truecoop’s Board of Directors, emphasizes the cooperative’s dedication to developing sustainable cashew cultivation practices. This commitment ensures that consumers receive high-quality, traceable, and organically certified cashews. Ninh Thuan’s favorable natural conditions, already known for grapes and apples, have proven ideal for cashew cultivation.
“It took us visiting numerous other provinces before we finally decided to settle in Ninh Thuan,” Mr. Thoi reveals.
Truecoop’s success is further bolstered by its qualified workforce, comprising university graduates and postgraduates. The cooperative’s organizational structure aligns with modern cooperative models, and its engineering and technical departments are well-equipped to implement advanced technologies in production and management. This young, knowledgeable team has been instrumental in driving Truecoop’s sustainable development.
Supporting local farmers in meeting international organic standards has been a challenging endeavor. While farmers possess traditional knowledge, adhering to these rigorous standards requires time and effort.
Cashew nuts will gradually gain a foothold in the market if there are cooperatives like Truecoop.
To address this, Truecoop not only works closely with farmers but also allocates 25% of its profits to a welfare fund that supports farmers with seedlings, technical equipment, and training. The cooperative aims to foster a collaborative partnership with farmers throughout the entire production and business process.
Truecoop also actively engages with businesses, the government, and farmers to build a comprehensive value chain, from production to processing and consumption, while accessing supportive policies.
In April, Truecoop signed an agreement with the Ninh Thuan Youth Union to support and connect with local students through the “3 Good Students,” “3 Training Students,” and “5 Good Students” programs. This initiative provides students with opportunities to experience the cooperative’s working environment through visits and internships, helping them understand the value of cooperatives and develop a collaborative mindset.
Expanding Market Reach
Truecoop’s strategic vision and practical approach have propelled it into a sustainable production model, earning Fairtrade Flocert certification since 2018. Cashew trees planted on hillsides, barren lands, and protected forests not only contribute to reforestation and erosion control but also increase farmers’ incomes.
Truecoop’s investment in a modern processing plant has enabled it to purchase cashews directly from farmers for processing and packaging, adding value to this agricultural product. The cooperative currently manages 4,081.80 hectares of certified organic cashew orchards, involving 2,516 households.
Truecoop supplies organic cashew nuts to five leading Vietnamese cashew exporters, reaching markets in Europe, South Korea, the US, and China. The cooperative also guarantees 100% product consumption for its members, with 1,808 tons of raw cashews purchased and sold in 2022, resulting in a revenue of 54.2 billion VND. In 2023, Truecoop’s revenue reached 150 billion VND, a 278% increase compared to 2022.
Truecoop plans to expand its cashew cultivation area in Bac Ai and Ninh Son districts, investing in processing facilities and providing technical training to farmers. The cooperative aims to achieve 5,000 hectares of certified organic cashew orchards by 2025. Additionally, Truecoop is diversifying into other high-quality agricultural products, such as jackfruit, apples, grapes, and oranges, with a commitment to purchasing these products from local farmers.
Overcoming Financial Challenges
The Ninh Thuan Department of Agriculture recognizes Truecoop’s contribution to enhancing the value of cashews in the region and opening up export opportunities. The cooperative’s well-structured investment in the value chain has enabled cashews to reach international markets. Farmers participating in Truecoop become owners of their land and acquire expertise in producing organic cashews to international standards.
However, Truecoop, like many other cooperatives in Ninh Thuan, faces challenges in accessing credit and preferential loans due to a lack of collateral or inadequate assets. Even when loans are accessible, credit limits are often low and based on the personal assets of cooperative members, without considering the feasibility of loan plans or providing mechanisms for seasonal working capital loans. This hinders the cooperative’s ability to expand production and purchase products from members, particularly in the seasonal agricultural sector.
For instance, in 2023, Truecoop could only meet 70% of the demand from customers with pre-existing contracts. This was due to limited working capital and the inability to secure loans, forcing board members to use personal assets as collateral to ensure the purchase of all seasonal produce from members and farmers.
Despite these challenges, Truecoop’s focus on developing a value chain and meeting international standards is a promising approach. Facilitating access to capital for Truecoop and other cooperatives in Ninh Thuan will be crucial in promoting sustainable agricultural development in the region.