VBCF signed a VND 9 billion investment agreement with SSC

A VND nine - billion investment agreement between Vietnam Business Challenge Fund (VBCF) and Southern Seed Corporation (SSC) was signed today. This inclusive business model is expected to help 2,200 low income households, majority of which are Khmer ethnic minorities, in Tra Vinh province step out of poverty.

VBCF has decided to invest VND 9.1 billion, as part of the total investment of VND 42.38 billion in SSC’s inclusive business model that promotes the shift from low-yield rice cultivation to corn seed production in Cau Ngang and Tra Cu districts, Tra Vinh province. Khmer farmers involved in this business venture will be trained by SSC in seed corn cultivation techniques and F1 hybrid corn production. This business partnership between would help increase the income of Khmer farmers by 57.7%, and the profit by almost three times. This inclusive business venture is expected to create many jobs for the local low income people by including them in the value chain of the SSC, from cultivation through to harvest and processing.

Mr. Han Phi Quang, SSC’s CEO said: “Local farmers were used to rice cultivation practice which depended heavily on rains hence causing low productivity and income instability. By partnering with SSC, farmers will be provided with seeds, finance and technical assistance to develop F1 hybrid corn area.”

“Beside Tra Vinh, this business model will be scaled up to other areas in Mekong Delta, creating a F1 seed corn specialised production hub. This will contribute to improving the production capacity of local seed corn which gradually substitutes the imported hybrid seed corns” - Mr. Quang added.

The SSC’s inclusive business model is among more than 20 business ventures, out of total 400 applications submitted since early 2013, that have been selected by VBCF. Mr. Ayala’s, VBCF Executive Manager, said: “Unlike many other companies that are used to working with skilled farmers and large suppliers, SSC takes the risk of working with small holders especially with those from ethnic minority groups, which requires a lot of efforts from the company. VBCF is willing to share this risk and we challenge the company to do their best in improving the lives of low income people while ensuring the profitability for the company.”

Since its first launch in late 2012, VBCF has selected more than 20 companies that have demonstrated a high potential to achieve innovation, inclusion and commercial viability with a wide range of business models, including:

· Increasing value in the Vietnamese rice industry by introducing Japonica rice seeds

· Introduction of bio char technology for corn production

· Sustainable farming of scallops

· Production and commercialization of F1 seeds in Vietnam

· Affordable water filters for low income households’ access to high quality water

· Centralized water treatment plant to improve low income households’ access to high quality and affordable water

· Medicinal plants production with ethnic minorities in compliance with international sustainable farming standards

· Mobile banking to provide affordable financial services to the low income people

· Energy efficiency lighting solutions

After two rounds of call for proposals, VBCF has to date committed a total funding of close to USD 9 million to the best inclusive business ventures.

Source: VBCF

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