July 29, 2011
Marubeni, Dong Nai Food collaborate in feed milling
Marubeni Corporation and Dong Nai Food Industrial Corporation (DOFICO) have agreed to jointly manage DOFICO's feed milling segment, as well as launch an integrated food output and supply system focused on the distribution of meat products.
The partnership is one of Marubeni's steps to market grains not only to the existing import markets, but also to expand total volume by participating in feed milling enterprises in emerging markets.
With rising global demand for grain, Marubeni seeks to secure a stable supply of grains and expand its sales channels across the world. Marubeni sold 20 million tonnes of grains in FY2010, and plans to market 25 million tonnes by FY2012.
DOFICO, a state-owned company of Dong Nai Province, has its own meat processing facilities and nationwide distribution network. DOFICO also holds a 25% stake in Proconco, Vietnam's largest native-capital feed producer that has more than 10% share in the country's market. Proconco's feed production was 1.2 million tonnes in 2010, and plans to expand to 3.5 million by 2020.
DOFICO plans to construct an integrated livestock complex slated to be named AGRO-PARK, to be situated in the Dong Nai Province Key Economic Zone 60 kilometres east of Ho Chi Minh City. The complex will include a large-scale livestock farm and a meat processing plant.
Marubeni plans to utilise its subsidiaries, most notably the Marubeni Nisshin Feed, to provide technical expertise, such as feed production and quality control, to its participation in the integrated food production and supply system.
Vietnamese demand for meat and poultry is expected to grow 50% in the next five years, and expand in tandem with the recent rapid development of its economy.
Growth in the feed industry is likewise anticipated. Vietnam produces about 10 million tonnes of animal feed a year, with the top four millers controlling 40% of the market.
With competition intensifying among small and middle-sized millers, as well as a heightened awareness of quality control, mergers and acquisitions within the industry are expected to increase.