Vietnam's dairy industry attracts local and foreign investors

 

 

Foreign and domestic companies invested heavily in Vietnam's young and burgeoning dairy market in 2014.

 

In mid-December, VinaCapital Vietnam Opportunity Fund and Daiwa PI Partners of Japan announced that they would invest US$45 million in International Dairy JSC (IDP-Ba Vi brand).

 

VinaCapital and Daiwa hold a 70% share of IDP,while the family of Nguyen Tuan Khai and the general director of IDP Tran Bao Minh own the remainingstake.

 

VinaCapital's CEO Andy Hosaid this Vietnam's dairy sector has great potential for development in the future. IDP is currentlya top-five milk producer in Vietnam with 2014 revenue estimated at US$80 million. With $460 million in additional capital, IDP is set to launch new products soon.

 

A representative of Daiwa PI Partners, Go Fujiyama, said this is the first investment of Daiwa in Vietnam's dairy industry.

 

He said in 1960 the per capita milk consumption in Japan was 12kg,which increased to 28.8kg in 1970 and further to46.6kg in 2010. Vietnam's per capita milk consumption presently stands at 14kg.

 

According to him, though the growth chart in Vietnam maynot be similar to Japan, future demand for milk in Vietnamwill continue to increase.

 

India'sNova Groupadmits that its Anova Milk JSC brand is currently not popular in Vietnam.So, to increase its competitiveness, the companyisworking with Kerry Group from Ireland in the development and supply of formula milk.

 

Vo ThuyAnh, CEO of Anova Milk Joint Stock Company, an affiliate of Nova, said the two sides would introduce the Anka product line for children in late March or early April before beginning research to develop other nutritional products. Anka milk products would be of high quality but 20% cheaper than similar products in the market, she said.

 

Vietnam's biggest dairy producer Vinamilk, which holds half of the country's dairy market, has continued to invest in new products and expand its network at home and abroad.

 

Following the construction of two large plants producing powder and liquid milk in the southern province of Binh Duong, with a combined investment of more than VND4 trillion, Vinamilkhasundertakena $23 million project in Cambodia, of which the company holds a 51% stake.

 

Speaking at the Vinamilk shareholders' meeting early last year, Vinamilk Chair Mai Kieu Lien expressed concern about the decline of the company's milk share in the domestic market in the face of increasing competition.Consequently, the company's profit growth has declined although its revenue has increased.

 

Hoang AnhGia Lai Group, which has never distributed or produced milk, alsosigned a cooperation agreement with Nutifood and Vissan last year to develop dairy cattle and build a milk processing factory. The total investment for this project is VND12 trillion, of which Vissan and Nutifood contributed 50% of capital. The full report can be read here: /contents/06-12-2014/236999c8-7a0a-4571-9180-00c84b48f4e4-a181.html