Vietnam’s dairy products gain large local market share
Updated at Thursday, 17 May 2018, 14:36
The Hanoitimes - Dairy firms in Vietnam have expanded their production rapidly and met local demands in recent years, helping the country reduce the product’s imports.
According to reports from the Viet Dragon Securities Company (VDSC), the proportion of import dairy products in the total domestic consumption dropped from 33 percent in 2014 to 22 percent in 2015, 20 percent in 2016 and 19 percent in 2017.
The reduction was thanks to the strong development of domestic production in recent years. For example, Vinamilk, the nation’s leading dairy producer, has increased its production capacity from 400 million liters to 600 million liters per year and will continue to increase to 800 million liters this year.
Vinamilk will increase milk output to 800 million liters this year
In addition, domestic dairy producers tend to expand their cow farms to better control the material supply and ease the reliance on material imports. Over the last five years, the scale of dairy farms has steadily increased, with the total number of milk cows rising from over 140,000 in 2011 to nearly 300,000 in 2016.
As consumers tend to be choosier about food hygiene, domestic companies now focus on developing new products that meet consumers’ taste and high requirements.
Vinamilk is developing its organic products, while other companies focus on developing alternative dairy products from vegetation. Quang Ngai Sugar has black sesame soya milk and green tea milk, while IDP has corn milk products.
Vinamilk, after taking up the United States (US)’ Driftwood, plans to launch condensed milk and creamer into the market with the Driftwood brand. It has joined forces with Miraka to make products in New Zealand and has set up Vinamilk Europe with headquarters in Poland.
NutiFood, Vietnam’s largest private dairy producer, jumped to the No 1 position in specialized dairy market segment with products designed to improve digestive system, height, weight, and products for malnourished children.
Nutifood early this year signed a contract with an American distributor in January to sell its Pedia Plus infant formula line in the market, taking a step forward in tapping one of the world's most challenging markets for nutritional supplements. Nutifood targets to earn $20 million from the American market in the first year, growing to $100 million in the next five years.
Vietnam’s dairy producers also expect to boost exports to Thailand when the Vietnamese product shipped to the market enjoys a zero percent tax rate under the ASEAN Trade in Goods Agreement (ATIGA) this year.
According to the Ministry of Industry and Trade, Thai dairy market has high potentials, valuing at some $3.4 billion in 2016. Annual consumption of dairy products in the country averages at roughly 35 liters per capita. Thailand currently imports dairy products mainly from New Zealand, Australia, Indonesia, the United States and the Netherlands.
According to the Vietnam Dairy Association (VDA), Vietnam currently has about 60 enterprises producing and trading dairy products with more than 300 brands.
The country consumed over 1.33 million liters of milk in 2017, up 6.6 percent compared to 2016. Consumption of powdered milk totaled 127,400 tons, up 10.4 percent over 2016.
The dairy industry reported total revenue of VND100 trillion in 2017, an increase of 10 percent over 2016, of which powder and liquid products made up 75 percent.
The Department of Livestock Production under the Ministry of Agriculture and Rural Development targeted to increase the country’s milk output by 14.1 percent this year.
Tran Quang Trung, chairman of VDA, said the dairy industry has been growing rapidly by 15-17 percent in recent years. Domestic producers now spend money and effort on both research and processing with attention paid to developing material areas, rather than relying on imports.