November 20, 2003

 

 

San Miguel Acquisition of Taiwan Tea Corp Proofs Lucrative Pig Farming & Feed Milling Markets in Vietnam

 

The US$35.5 million acquisition by San Miguel Corp. of Taiwan Tea Corp.'s 100% stake in TTCV Investment (BVI) Co. Ltd. based in Vietnam is seen as proof that pig farming and feed milling have become lucrative markets for foreign players.

 

Since 1995, foreign companies have started to pour capital into Vietnam's feed milling industry and the market has then witnessed many mergers and acquisitions.

 

Local poultry and cattle farmers need more than 10 million tons of feed a year, show figures from the agriculture department of the Ministry of Planning and Investment. Only one-third of the demand is now satisfied, hence local and foreign companies have plentiful room for expansion on their business. 

 

Preliminary statistics of the Vietnam Animal Feed Producers Association indicate that the country has 130 animal feed mills with annual output of three million tons. More than half the mills are located in the southeastern region, especially in Dong Nai Province.

 

Currently, 15 foreign-invested companies and joint ventures with foreign involvement are holding a 50% share of the domestic market.

 

Key players include Cargill of the U.S., C.P of Thailand, Proconco and Guyomarch of France, TTC of Taiwan, NewHope of China, and Cheil Jedang Group of South Korea.

 

Investors are also keen on the pig farming and meat market. In a bid to attract investment, the Government has adopted policies to develop the country's high-quality pig breeding and meat production sectors.

 

Vietnam now has 65 breeder pig farms owned by State-run companies. More than 1,000 private enterprises and four foreign-invested companies namely C.P, Dai Viet, TTCV Investment (BVI) Co. Ltd. and France Hybrides, are also involved in the sector.

 

The Ministry of Agriculture and Rural Development is drafting an ordinance on plant variety and livestock farming. According to Tran Kim Anh, deputy head of the agriculture department, this ordinance will create more advantages for investors committed to the industry.