Export Coffee Processing and Roasting Joint Venture Company
MIGA issued separate guarantee contracts to McCullagh International, L.P., of the United States for its equity investments in the establishment of two coffee processing facilities in Vietnam. The project enterprises, the country's first foreign joint ventures in coffee processing, will have a significant economic impact by enabling Vietnam to export processed robust a coffee rather than green beans for processing elsewhere in Asia.
The first facility, Net Cafe, is a coffee processing and roasting facility in Nha Trang, northeast of Ho Chi Minh City. MIGA coverage of $1.1 million was issued against the risks of currency transfer, expropriation, and war and civil disturbance. The joint venture is with Mascopex, a subsidiary of the largest government-owned coffee trading company, Union Coffee Company. Net Cafe will clean, dry, grade, and bagrobusta coffee beans for export, using advanced technology that meets international quality standards. Total annual output of processed coffee is expected to reach 10,000 metric tons.
The project will have a significant positive impact on the local economy and the social development of the region. All of its raw materials will be purchased from local farmers, as will most noncoffee inputs. Once operational, Net Cafe will provide permanent employment for approximately 30 local workers. During the peak season an additional 30 workers will be hired. Along with medical benefits and meals, local staff will receive extensive training in plant operation, quality control, marketing, and business management.
The other coffee processing facility, Krong Ana Joint Venture Export Coffee Processing Company (Anacula), is located in Dac Lac Province. MIGA's $0.8 million guarantee covers McCullagh's $0.9 million investment against the same risks covered for the Net Cafe investment. Krong Ana Coffee Factory, a state-owned cooperative, owns 35 percent of Anacula. Anacula will use an advanced manufacturing process similar to that used by Net Cafe, which will ensure that the coffee meets international quality standards. Anacula will have the same positive developmental impacts as Net Cafe.