Lao Cai attracts investment in the agricultural processing sector

A 600-billion-VND factory in the cinnamon heartland

Lao Cai identifies agriculture as one of its priority sectors for attracting investment. The province's goal is not merely to attract more projects, but to channel capital and technology into production and deep processing, elevating agricultural value and gradually establishing a large-scale commodity production sector.

This also represents part of Lao Cai's growth equation. To contribute to the double-digit growth target, the agricultural sector needs to create extra value directly from advantageous products, rather than relying primarily on expanding acreage or yields. Among these solutions, deep processing and attracting enterprises to participate from production to consumption are regarded as key directions.

A prime example is the cinnamon and star anise processing plant with a total investment of around 600 billion VND constructed right within the raw material zone; alongside a high-tech pig farm worth nearly 50 billion VND currently under development... Though operating in different fields, both aim toward large-scale production, technology application, and elevating the value of agricultural products.

For Lao Cai, cinnamon is a primary crop with a vast raw material zone. However, products currently exist mainly in raw or preliminarily processed forms, meaning the resulting value does not match potential. Therefore, attracting enterprises to invest in deep processing right inside raw material areas will help diversify products, lift the value of cinnamon trees, and increase local production value.

In Xuan Quang Commune, the Vietnam Cinnamon and Star Anise Production and Export Joint Stock Company (Vinasamex) is investing in a processing plant across an area of approximately 10 hectares. According to initial approvals, the project held a total investment of over 411 billion VND. During execution, after supplementing items and costs to satisfy practical requirements, the total investment capital has reached around 600 billion VND.

Ms. Nguyen Thi Huyen, General Director of Vinasamex Company, revealed: In Phase 1, the plant is projected to reach an annual capacity of approximately 15,000 tons of cinnamon and 5,000 tons of star anise. In addition, the facility can produce 500 tons of cinnamon essential oil, 500 tons of star anise essential oil, and about 972 tons of cinnamon-derived products each year. The plant is expected to go into operation in September 2026.

Notably, the project invests in deep processing right within the raw material zone. Instead of mainly preliminarily processing cinnamon and star anise, the plant will manufacture higher-value product lines such as essential oils, essences, plant extracts, active ingredients, and natural molecules serving food, pharmaceutical, cosmetic, flavoring, and healthcare industries.

"Investing in a factory right within the raw material zone helps our unit remain more proactive in production while unlocking deeper value from cinnamon trees. Not only cinnamon bark, but leaves, branches, and several previously low-value by-products can also be utilized to produce essential oils," Ms. Huyen shared.

This approach unlocks the ability to capture nearly the full value of the cinnamon tree, rather than focusing solely on a few traditional products.

Accompanying the factory is the raw material zone. For the factory supply area alone, the unit has partnered with 900 households to develop 1,500 hectares of organic cinnamon. Across its entire network up to the end of 2025, the unit maintained partnerships with approximately 4,007 households across over 7,734 hectares of organic and sustainable raw material zones.

Farmers participating in the chain receive guidance on organic farming protocols, farming logs, standards control, and certification support. Depending on corporate policy across each period, standardized organic materials are purchased at prices 5-10% higher than conventional goods.

Upon commencing operations, the factory aims to generate around 300 local jobs. About 2,000 households in the locality and neighboring areas will have opportunities to access organic cultivation knowledge, quality requirements, and guaranteed off-take mechanisms.

Lao Cai Province also maintains support policies to develop raw material zones serving processing and export. Under Resolution No. 21/2025/NQ-HDND, qualified cinnamon material zone projects of 500 hectares or larger can receive funding support for international organic certification, UEBT certification, growing area codes, and part of the expenses for participating in international trade activities as prescribed.

Thus, linking deep processing with raw material zones not only elevates cinnamon value, but also helps increase incomes for local residents.

Nearly 50 billion VND invested in a pig farm

Beyond agricultural and forestry processing, Lao Cai is drawing investment into large-scale agricultural production. In the livestock sector, Minh Anh Company has been investing nearly 50 billion VND to build and develop a pig farm across an area of over 5 hectares.

The farm operates at around 7,000 heads per batch, with 2 batches per year, for a total of about 14,000 heads annually. Rather than small-scale backyard farming, the project is invested in a concentrated manner, applying slatted floor housing, herd management, and monitoring systems to boost productivity and curb epidemics.

The farm also invested in a closed-loop wastewater treatment system integrated with biotechnology to treat waste, control odors, and increase post-treatment water reuse capacity. These represent crucial requirements as livestock farming shifts from household scale to concentrated commodity production.

Mr. Do Viet Hung, Director of Minh Anh Company, stated that before making the investment decision, the unit surveyed numerous areas. Through research, they found that Northern Vietnam still holds ample opportunities to develop comprehensively invested, large-scale livestock farms with strict biosecurity controls.

Lao Cai also fulfills suitable conditions for investment selection. "Being a border province bordering China with a border-gate system favorable for commerce, we identify investing in the livestock farm in the immediate future; once operations stabilize, we will continue researching other stages to step-by-step establish a complete production chain," Mr. Hung stated.

Once operating stably, the farm is projected to generate 30-50 direct jobs for local laborers. Tasks center primarily on livestock techniques, veterinary care, operations, environmental treatment, maintenance, and management.

Beyond direct workers, farm operations will drive demand for transportation, animal feed, inputs, equipment, veterinary supplies, and technical services. The unit also does not intend to stop merely at raising around 14,000 pigs per year.

According to Mr. Hung, after the farm operates stably, Minh Anh Company plans to explore phased investments in breeding stock, animal feed, veterinary services, slaughter, preliminary processing, deep processing, and product distribution.

Partnerships with local livestock farmers are also being calculated. "Local residents can participate in the production process. Our unit can support breeding stock, technical guidance, biosecurity protocols, and market outlets. When multiple parties join, project efficiency will extend far beyond the farm perimeter," Mr. Hung shared.

If this plan is deployed, multiple production and service activities can develop around a single farm. Farmers, cooperatives, input and feed suppliers, transport providers, veterinary services, slaughtering, and processing facilities can all participate.

Evidently, the cinnamon processing factory and the large-scale livestock farm are two of the projects Lao Cai Province has attracted to accelerate processing and commodity production, elevate agricultural value, generate jobs, and contribute to provincial growth in the coming time.

$ 1 = VND 26,340 - Source: Vietcombank.