This year, in addition to firmly maintaining domestic market, export strategy of Petro Vietnam Fertilizer and Chemicals Corporation (PVFCCo – member of Viet Nam National Oil and Gas Group – PVN) is to consolidate fertilizer consumption markets in Cambodia, Myanmar, as well as further develop other markets in the region.
From the beginning of this year, Representative office of PVFCCo in Myanmar has coordinated with customers to receive first batch of exported Phu My Fertilizerdelivered as scheduled, safely. Myanmar is considered as a highly potential market to Vietnamese fertilizer producing companies strategising export plans to this market because this is the country having large agriculture-forestry area, with a total annual fertilizer demand of 1.5 million tons. According to PVFCCo, despite competing against unofficial cross-border urea products imported from other countries to Myanmar, by having excellent packaging designs, superior product quality, Phu My Fertilizer will definitely be preferred by farmers in Myanmar. It is yet to mention that thanks to convenient transportation (freights from Vietnam to Myanmar only take 3-5 days), when exporting to this market, large fertilizer corporations in Vietnam will achieve more competitive advantages than shipments imported from other countries. Costs of transporting fertilizers from Vietnam to Myanmar are also much lower than from other countries. This is also a competitive advantage to PVFCCo during its brand expansion process in Myanmar market.
Apart from Myanmar market, in order to promote fertilizer exporting strategies to Cambodian market this year, at the end of 2013, PVFCCo signed a fertilizer business cooperation memorandum with Nitrogen Chemicals and Fertilizer Cambodia Ltd. (NCFC). In accordance with this memorandum, PVFCCo and NCFC will corporate to distribute Phu My Fertilizer products with high quality at reasonable prices in Cambodian market in order to promote agricultural development and support famers in this market. Reportedly, NCFC is a member of the Royal Group of Companies; the Royal Corporation that focuses on multi-sector investments with financial capabilities, operating in many industries in Cambodia. PVFCCo established a branch in Phnom Penh since 2011 and has far exported 32,500 tons of fertilizers to this market. In addition to signing agreements to distribute products to major agents, PVFCCo Branch has also offered direct sales to small agents based in provinces so as to develop distribution system and deploy many technical supporting activities to Cambodian farmers. PVFCCo organised a demonstration of utilising Phu My Fertilizer in Cambodia and it is, in fact, shown that given reasonable usage of fertilizer, productivity has increased from 3.0 to 3.5 tons/hectare to 6.0 to 8.0 tons/hectare. Cambodian market is chosen so that Vietnamese enterprises can export fertilizer because this Temple symbolic country is pretty close with Vietnam in terms of geography and bilateral relations. Cambodia is also known as an agricultural country with 75% of the population farming. However, because of poor farming approaches, there is a gap on the market for fertilizer, plant protection products… In a market like Cambodia, there are also other Vietnamese fertilizer, plan protection products producing enterprises in addition to PVFCCo such as Five Star International Group, Binh Dien Fertilizer Joint Stock Company, An Giang Plant Protection Joint Stock Company… being in presence. It has not been mentioned of Chinese fertilizer products being massively exported to this market.
Reportedly, current challenge for Vietnamese enterprises entering this market is the relatively high cost to deliver fertilizer products to the distribution system of Cambodia. On the other hand, people”s purchasing powers remain low. This requires PVFCCo, in particular, and fertilizer producing enterprises of Vietnam in general, to endeavour, exploit the competitive advantages regarding quality, convenient transportation, low costs … in the process of expanding the brand.
