April 28, 2015

Vietnam's dairy giant Vinamilk eyes cattle feed businesses

Vietnam's biggest dairy company Vinamilk will set aside VND4 trillion (US$186 million) for mergers and acquisitions (M&As) this year, mainly in the cattle feed sector, the company announced.

"Multinational companies today expand their operation by M&A. Therefore, acquiring other firms is also part of Vinamilk's growth strategy," said Mai Kieu Lien, chairwoman of the company, adding that it was critical to retain its current market position in the segment.

Vinamilk's board of directors has given the nod to the new initiative that involves partnering with other firms to develop the cattle feed business.

Last year, it has built two dairy farms, adding to the total of seven farming facilities.

Additionally, Vinamilk plans to invest further in the parent company (VND258 billion), Vietnam Dairy Cow Co Ltd (VND387 billion) and Lam Son Dairy Company (VND12.6 billion).

Abroad, the company has completed the acquisition of US-based Driftwood Dairy, which generated a 460% profit growth last year, and integrated its sales of some US$120 million.

The company also revealed that it is negotiating with two foreign partners to set up a milk powder factory in Europe.

Vinamilk aims to achieve US$3 billion in profit by 2017 and become one of the world's top 50 dairy companies. Lien has affirmed that the goal is feasible, but first, for 2015, the company's revenue and profit need to rise some 10-13% to VND39 trillion and VND6.83 trillion respectively.