October 18, 2006

Friesland to build second dairy plant in Vietnam

Dutch dairy group Friesland Foods, best known for its Dutch Lady brand, announced plans for a second dairy plant in Vietnam last week.

The EUR17 million (US$21.3 million) plant, which would concentrate on ready-to-drink products, would allow the company to meet strong demand for its products in the rapidly growing Vietnamese dairy market.

To be situated in Phu Ly in the northern province of Ha Nam, the plant is scheduled to start operating in January 2008.

The company would add 225 people to its current staff of 1,200.

The company had its first factory in Vietnam in 1968 and now supplies products to approximately 80,000 sales outlets from three distribution centres.

Growth of dairy products sales in Vietnam are surging at an astonishing rate of 25 percent. More than 60 percent of the country's population is under 20 years old, and with the government implementing a milk programme in schools, continued growth in milk demand is expected.

Although a US$600 million dairy market expected by 2010, analysts say the current industry can only supply about 10 percent of demand, which meant the rest of it had to be met by imports.

Vinamilk, the market leader in the country, controls approximately 40 percent of Vietnam's milk market.