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Tracing the supply chain for coffee in Viet Nam
15 September 2009
By Dzung Pham and Phil Culik, Kraft Foods Global Inc.

Phil and Dzung at the United Nations Office in Ha Noi (Photo: Dzung Pham and Phil Culik, Kraft Foods Global Inc.)
In early July 2009, Phil and Dzung arrived in Ha Noi to start their two week mission as Corporate Volunteers on behalf of Kraft Foods Global Inc. The pair was selected to work with the United Nations Industrial Development Organization (UNIDO) and several national partners in the coffee industry.

The heat, humidity, new scenery and, in particular, the constant roar coming from “swarms of motorbikes” heightened the anxiety of the new arrivals. This apprehension, however, proved to be unfounded and was quickly dispelled by the hospitality, politeness and, at times, friendly curiosity shown by the many “Hanoians” with whom the visitors soon came into contact with their first taste of the city.

Later, a quick visit to UNIDO’s office in downtown Ha Noi to meet Junichi Mori, the gentle, hard-working UNIDO Industrial Development Officer, and Betty Nguyen, the cheerful UNV Programme Officer, officially launched the Coffee Traceability Mission. The friendly manner of the staff in the UNV office put the Kraft team at ease and feeling more confident that they were among friends.

The Viet Nam Coffee Traceability Mission forms part of a broader effort, financed by the Swiss State Secretariat for Economic Affairs (SECO), to strengthen capacities in Viet Nam related to standards, testing and conformity infrastructure in the coffee sector. This helps to ensure the effective implementation of World Trade Organization (WTO) obligations such as Technical barriers to Trade and Sanitary and Phytosanitary commitments.

In 2001, Kraft Foods Global Inc. became the first private company in the United States to form a partnership with the United Nations Volunteers (UNV) programme. Continuing this partnership, this year Kraft provided support for its employees to form nine teams of volunteers who would, in Kraft’s name and vision, share technical expertise with food colleagues in new cultures and situations in places as diverse as Nepal, Madagascar, Jordan, Ecuador, Bosnia-Herzegovina and Viet Nam.

Phil, a Category Quality Manager from Kraft Foods North America, Planters Division, in East Hanover, New Jersey has, like most Americans, a distant and singular knowledge of Viet Nam. And, despite being a Vietnamese expatriate, Dzung, a Quality Manager with Kraft Foods in Melbourne, Australia, could only visualise Ha Noi through what he knew from literature or had seen in other media.

During their time in Viet Nam, Phil and Dzung, together with members of UNIDO Viet Nam and the Directorate for Standards, Metrology and Quality (STAMEQ), conducted a detailed study into the status of traceability of the whole supply chain for coffee in Viet Nam.

Following consultative meetings with a number of stakeholders of the Traceability project at the policy level, Phil and Dzung’s first stop was Buon Ma Thuot, a city in Dak Lak province, and one of the largest population centres in Viet Nam’s Western Highlands. The coffee industry in Viet Nam has grown exponentially from a modest 20 thousand tons in the 90’s to 1200 thousand tons in 2008 making Viet Nam the world’s largest producer of Robusta coffee! Most of this growth had been in the Western Highlands region. The team were to collect their most useful field data from the many coffee plantations in and around this mountainous city.

In Buon Ma Thuot, the team stayed in two hotels which had been in business for only a few months. As one of the first Americans ever to set foot in the place, Phil became the focus of much attention to the extent that the hotel staff decided to set up signs in English to warn their new American friend of the danger of an as yet unfinished elevator shaft. Phil’s memory of Dakruco: “great bunch of folks!”

The team at Thang Loi’s – one of the plantations in Dak Lak province (Photo: Dzung Pham and Phil Culik, Kraft Foods Global Inc.)
During the three short days in Buon Ma Thuot, the team had the opportunity to meet with a number of key players in the supply chain of coffee beans, and visited planters and collector-processors where the team viewed plantations and talked with farmers and workers whose hard work was at the source of Viet Nam’s growing coffee industry.

Life on coffee plantations is still tough. To supplement their income, coffee farmers grow hard wood, cocoa or duran trees to support the pepper vines which in turn provide the necessary shade to nurture the coffee plants, which are the main source of income. However, with research efforts to improve the quality of the coffee plants at Western Highlands Agro-Forestry Science and Technical Institute (WASI), and support from organisations such as UNIDO, the quality of life for coffee farmers is beginning to improve.

From plantations, coffee beans are collected and processed by collector-processors, before being tested by Cafecontrol. Then, a small portion (5%), is turned into consumer products for local consumers, and the rest is shipped to roasters around the world by enterprises.

The arrival in Ho Chi Minh city from Dak Lak in the middle of the night marked the completion of the first week of the project. With the weekend free the Kraft team switched to tourist mode. Being a first-time visitor to the city, Phil struggled to fit in all his activities: walks in the rain, shopping in Ben Thanh central market, a fun motorbike ride to Cho Lon market… So many things to do in so little time!

The following Monday, the Kraft team met with management of the Cafecontrol office in HCMC before going to visit the largest testing facility managed by STAMEQ in Bien Hoa province. The hospitality and the intelligence of the hosts left a lingering respect and admiration in the visitors’ mind.

The subsequent interviews with representatives of three large coffee buyers with offices in the city completed the Kraft team’s planned activities in Ho Chi Minh city. The whole supply chain for coffee was now covered. It was time for the team to return to Ha Noi and get ready for wrapping up its mission.

The audience participating in the UNIDO – Kraft - UNV Traceability Project presentation in early July 2009 (Photo: Dzung Pham and Phil Culik, Kraft Foods Global Inc.)
The team’s presentation of its findings and recommendations to an audience of stakeholders at the conclusion of the mission marked Kraft’s fulfillment of yet another successful UNV mission.

Preparing for a project like this Kraft-UNV mission involves much work and effort. Two weeks are not a lot of time for travelling to three regions of Viet Nam, and meeting so many different people. Then there is the follow-up and the responsibility to give back some of what you received. Despite this, it has perhaps been Phil and Dzung who benefited most from the mission

Phil expresses his appreciation: “The opportunity to participate in a UNV mission on traceability and share what knowledge we have with the coffee industry in Viet Nam was a great feeling. The folks we spent time with were sincerely interested in our experiences in our home countries and their application to the Vietnamese coffee industry. Upon completion of the mission, we truly felt that we had contributed some new learning to the industry that will be useful down the road.”.

The experience of a new culture, interacting with seemingly total strangers who willingly opened their arms to welcome the two into their world, has left an indelible impression in Phil’s mind. Seeing the energy, the enthusiasm of the Vietnamese people going about their work has warmed Dzung’s heart and re-enforced his belief in a bright future for the Vietnamese people.
 
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