VIETNAM TEA INITIATIVE MARD & UNILEVER VIETNAM PPP FOR SUSTAINABLE AGRICULTURE DEVELOPMENT TASK FORCE UPDATE HANOI - 11 TH APRIL, 2014

VISION & OBJECTIVES “MADE IN VIETNAM TEA” equivalent of “MADE IN VIETNAM COFFEE” 1.To help Vietnam increase its export of tea through enabling Vietnam’s designated tea growers and processors to achieve 4.0* Quality Index minimum 2.Specifically, to increase annual tea procurements from Vietnam by Unilever to 30, ,000 tons of R.A certified tea.

APPROACH TWO PILLAR APPROACH: INTEGRATING AGRONOMY AND PROCESSING INTO ONE SUPPLY CHAIN Working with Tea Farmers for Sourcing Sustainable Tea and Improving Quality and Yields of Tea Leaf Working with Selected Tea Processors for Improving Tea Quality to Export Index and Improving Good Manufacturing Practices

PHASE 1: COMPLETED ( ) Quadruple import quantity from Vietnam within < 2 years to 12,000 MT (end 2012) with improved quality GOOD MODEL FOR PHASE 2

NOW IN PHASE 2 (2013 TO 2015) Key Deliverables: 1.Direct investment in tea processing facility 2.Expand farmers’ network to more farmers in more provinces (based on Model refined in Phase 1) 3.Achieve EXPORT target of 30,000 – 35,000 MT / year (fully RA certified)  Tea processing cooperation  Tea processing investment  IDH cooperation IN ACTION

PHASE 2: PROGRESS TO DATE Tea processing cooperation A long term manufacturing contract has been signed with a selected partner – My Lam Tea processing investment Direct investment in 1 CTC line factory in Yen Bai province. Final stage of investment licensing (Van Hung) IDH-Unilever-RA agreement Agreement reached on a 3 year joint project to scale up the work with farmers on the integration of smallholders into Quality and Sustainable Tea Supply Chains in Vietnam

IDH - UNILEVER - RA COOPERATION PURPOSE: To integrate Smallholders into Quality and Sustainable Tea Supply Chains in Vietnam so as to accelerate and up scale viable and sustainable Tea production and trade in Vietnam.

IDH – UNILEVER - RA COOPERATION 1.Scope: to improve the long-term economic, environmental and social sustainability of Vietnamese small holder tea farmers and tea factory owners via provision of training on the Sustainable Agriculture Network Standard that can lead to RA certification. 2.Target provinces: Phu Tho, Tuyen Quang, Lam Dong, Yen Bai, Vinh Phuc & Nghe An 3.Direct impacts: > 23,000 farmers 4.Budget: Euro 440,000 5.Duration: Nov 2013 – Dec Progress: Launched in Jan 2014 in Hanoi; VECO contracted for field training/FFS; 1 st TOT conducted; 2 nd TOT April 2014

CHALLENGES/ SUPPORT 1.Permit to NGOs who provides training of farmers: Need permits for them to provide service in 6 provinces (currently only in Phu Tho) 2.Publicize the assessment of factories (as A=good, B=need improvement, C=not good) so that we can praise A factories and encourage B & C factories to improve. 3.Suggestion to take action/ close factories that do not operate according to the standard (which is set by MARD) to improve overall tea quality 4.Control of pesticides usage in Vietnam tea plantations

THANK YOU