Tapping Vietnam's reliance on imports

The new Interflour and CBH initiative of CI Trading began operations in November with John Spillane at the helm.

The independent grain trading company is buying grain of all types into the country and selling manageable quantities to the local market in Vietnamese dong.

Mr Spillane said the attraction of buying small amounts of grain suited local importers who have limited storage capacities but growing needs for grain.

He said selling in the local currency was an advantage over any foreign marketers and came with credibility as being a Vietnamese business.

"Interflour has a port and warehouse here and an opportunity was identified where we could trade grain and leverage off this," Mr Spillane said.

"No other flour miller has a port and we can use the port access and storage to offer a better system."

Mr Spillane moved to Ho Chi Minh City last year and prior to this, worked in marketing and trading with CBH in Perth.

He joined the co-operative in 2012 as a part of the CBH graduate program following completion of a degree in physics and a masters in financial maths.

Born in Ireland and raised in Scarborough, Mr Spillane said the agricultural industry knowledge he gained while working for CBH has helped him grasp the importance of the commodities coming out of Australia to the South East Asia region.

"At first it was a very big learning curve, but fortunately the graduate program that CBH developed rotates you through the trading area, other parts of the business and to visit growers," Mr Spillane said.

"You're given the opportunities to understand how the industry works.

"Trading doesn't automatically require a background in agriculture but it does mean you have to understand it to do it properly."

Mr Spillane said heading up CI Trading was breaking completely new ground for both himself and the part CBH-owned Interflour business.

"We have plans and goals for the business but I think every achievement along the way will be as important," he said.

"We are importing grain from mainly Australia, but we can import grain from any origin and sell it locally.

"We buy a bulk quantity of grain and we then sell that locally in contracts to flour millers and feed millers."

Proximity to Australia and the promise of quality grain puts WA growers in a good position to supply Vietnam and be the source of much of Mr Spillane's grain purchases.

"Most of the time proximity works very well in terms of freight advantage, but every now and then you get a price discrepancy where grain is cheaper elsewhere and is in bulk but not in Australia," he said.

"The Vietnamese like WA grain and that is always a consideration.

"It's a market that works naturally very well for Australia with a freight advantage and a history of using Australian grain at a good price.

"Australian grain does get switched out for other origins at times but it's generally regarded as high quality and that is more appealing than some other origins.

"When you buy Australian grain you know you're going to get what was in the contract, this protein and falling number, that is going to arrive, there's no ifs or buts.

"There's not going to be a hidden issue, they know exactly what they're getting and they are willing to pay for that."

Mr Spillane said growth in wheat needs in Vietnam had opportunities that grew exponentially with the population.

"We've started a brand new business here, there's 101 things to do but we have to take each step as it comes," he said.

"We have to get out, we have to meet customers, we have to become associated with anything to do with buying and selling grain.

"The challenge this market poses and the opportunities it presents in terms of where the company may be in three years and realistically what we may achieve in three years is phenomenal."

Rachael Oxborrow travelled to South East Asia as a guest of CBH Group.