Cooperative creates multi-value chain from banana cultivation

The humble banana plant, a familiar feature of rural landscapes throughout Viet Nam, has become the foundation for a diverse portfolio of value-added products at a cooperative in Hue City.

That cooperative is the Huong Tra Banana Fiber and Agricultural Services Cooperative. What sets it apart is its strict adherence to circular economy principles: nothing goes to waste, as by-products from one stage of production become raw materials for the next.

A diverse range of banana-based products

Although it was established only in October 2025, the cooperative has already developed a 25-hectare raw material area spanning the communes of Huong Tra, Binh Dien, and Hung Loc in Hue City.

To accelerate the development of its production system, the cooperative partnered with Musa Pacta JSC, a pioneer in banana fiber technology in Viet Nam. Through this collaboration, it has adopted technical processes covering the entire production chain, from seedling propagation and cultivation to crop management, harvesting, and processing.

Musa Pacta also provides equipment, such as banana stem-splitting and fiber-extraction machines, while guaranteeing the purchase of the cooperative's commercial output. As a result, despite its recent establishment, the processing facility has reached a capacity of approximately 100 metric tons of fresh bananas per month, creating jobs for around 50 local workers.

Under its circular banana value chain model, virtually every part of the banana plant is utilized to produce a wide range of products. In addition to its core products of industrial-grade banana fiber and handcrafted goods, the cooperative has diversified its product portfolio to include green banana flour, soft-dried ripe bananas, banana blossom tea, banana wine, and banana vinegar.

Through the skilled craftsmanship of local artisans, banana stems are stripped, dried, braided, and woven into ropes of various sizes, then transformed into bags, baskets, brooms, paper, and other uniquely designed products. Huong Tra banana fiber is highly regarded for its durability, softness, flexibility, and exceptional resistance to mold and shrinkage. Even the residual banana pulp, which would otherwise be discarded, is composted into growing media and organic microbial fertilizer, returning valuable nutrients to the soil and completing the circular production cycle.

Sharing what inspired her to pursue this model, Hoang My Linh, Director of the Huong Tra Banana Fiber and Agricultural Services Cooperative, said she was born into a farming family and grew up surrounded by rice fields and farmland, giving her a deep appreciation for the value of farmers' labor. After learning about circular production technology that uses every part of the banana plant, she was determined to introduce the model to her hometown.

"It would be equally accurate to say that I chose zero-waste agriculture or that this model chose me", Linh said.

According to Linh, the banana fiber industry has been established and steadily developing for nearly two decades in countries such as the Philippines, India, and China. She believes the sector has tremendous growth potential if developed strategically, particularly as environmentally friendly materials continue to gain popularity worldwide. The cooperative has received ongoing support from the Hue City Cooperative Alliance and local authorities to develop its business model, promote trade, and expand market access.

Driven by green financing

Launching a circular economy model requires substantial upfront investment, particularly during the early stages of infrastructure development and production line installation. Recognizing this, the Huong Tra Banana Fiber and Agricultural Services Cooperative proactively sought financing from the banking sector.

According to the cooperative, it has secured bank financing to support working capital, invest in processing facilities, and purchase raw materials, thereby enabling it to better organize production and strengthen partnerships with growers in its raw-material areas.

However, to expand its operations and enhance competitiveness, the cooperative believes that additional green financing policies tailored to circular-economy business models are still needed. Linh said she hopes the banking sector will introduce dedicated green credit programs aligned with ESG (Environmental, Social, and Governance) standards.

"The global banana fiber market has been growing rapidly for years, driven by rising demand for environmentally friendly materials. Once our cooperative can demonstrate a closed-loop, zero-waste production process, we need preferential green financing with more competitive interest rates and higher credit limits. That would provide a powerful incentive for circular agriculture enterprises like Huong Tra, easing financial pressures, enabling us to confidently establish ourselves as a 'green business', and helping Vietnamese agricultural products become more competitive in global markets," Linh said.