Vietnam shines in dairy sector

April 16, 2018

Vietnam appears to be leading the Asean region in milk production, with Vinamilk standing in the spotlight. Apart from venturing into functional milk-based products, the company is also investing in organic milk production and has launched a 20,000-head dairy cow project. Today we bring you some top notes from Vietnam’s dairy sector:

New Zealand dairy leader eyes Vietnam market
Vinamilk to produce functional food
F&N plans for 18.25% stake in Vinamilk
New 20,000 head dairy cow project in the offing
Priority on organic milk production
Vinamilk targets USD2.4b revenue this year
TH Group modernises human resources management

New Zealand dairy leader eyes Vietnam market
New Zealand’s leading exporter of dairy products, Fonterra Group, and Deosan Dairy Equipment Company have expressed their desire to invest in Vietnam. Fonterra Group CEO, Lukas Paravicini, said Vietnam is an important market for Fonterra. The company provides raw materials and nutritional products for this market. Meanwhile, Deosan intends to support Vietnamese farms with milking equipment, veterinary services, farm management and design, and quality management systems. Both parties noted that the dairy market in Vietnam is developing strongly and is considered one of the most attractive markets in the world.

Vinamilk to produce functional food
Vinamilk in Vietnam has just signed a strategic partnership with DHG Pharma for functional food production. Vinamilk will study the addition of special vegetable protein which is a strong product line of DHG Pharma to its yoghurt and powdered milk products. The two companies will coordinate the production of functional foods, build co-branded products, develop existing items, and exploit the distribution network of each party. “In the past 5-7 years, the two companies have exchanged experiences and this cooperation has defined a stronger platform for cooperation in the field of functional foods production,” said Madam Mai Kieu Lien – General Director of Vinamilk.

F&N plans for 18.25% stake in Vinamilk
F & N Dairy Investments has officially completed the purchase of 6.6 million shares of Vietnam Dairy Products Joint Stock Co (Vinamilk, VNM). This has raised F&N’s ownership in Vinamilk to 17.25%. F & N has registered to buy 14.5 million shares of VNM between March 27 and April 24. If the transaction is successful, the fund will raise Vinamilk’s ownership to over 264.9 million shares, equivalent to 18.25%. “Strategic investment in Vinamilk allows us to reduce our dependence on key markets such as Singapore, Malaysia and Thailand, and participate in the dynamic growth in Vietnam’s economy,” said Charoen Sirivadhanabhakdi, a Thai billionaire who acquired F & N Dairy Investments, a wholly-owned subsidiary of Singapore’s F & N.

New 20,000 head dairy cow project in the offing
Vinamilk has inaugurated the first of five farms at the Thanh Hoa Hi-tech Dairy Farm complex in Vietnam. The farm, built on 40 hectares and costing USD 32 million, has 4000 dairy cows. It meets Global GAP standards for farm management and pure fresh milk quality, using Dairy Plan management technology developed by GEA Farm Technologies (USA). Fresh milk is collected and transported via cold pipes at 2-4 degrees Celsius. According to the project’s roadmap, from now until 2020, four other farms in the complex will be completed, including an organic dairy farm, thereby upgrading the scale of Thanh Hoa Vinamilk hi-tech dairy farm to meet the target of 110 million litres of milk per year. “This farm contributes to the development of advanced and sustainable agriculture,” said Madam Mai Kieu Lien, General Director of Vinamilk.

Priority on organic milk production
Vinamilk is prioritising developing farms for organic dairy farming, specifically expanding organic farms in Da Lat and Thanh Hoa provinces. This is to meet the increasing demand for premium organic milk, according to Vinamilk’s Annual General Meeting on March 31, 2018. Besides the two mentioned farms, Vinamilk is also planning to find a breeding area in the South and Central Vietnam. The company is confident that it will speed up the development of organic milk in the near future. Vinamilk launched its organic dairy operation in 2017 and is the first company in Vietnam to successfully produce this high-quality milk.

Vinamilk targets USD2.4b revenue this year
Vinamilk targets to achieve USD 2.4 billion in revenue (up 8.5% over the previous year) and USD 470 million in profit (up 4.6%) this year. According to Mai Kieu Lien, General Director of Vinamilk, its market share in milk is 58%. “Growth must be based on supply – demand and market movements. To achieve a 1% market share in the dairy sector, Vinamilk has to grow above 7%. In addition, the growth rate of enterprises also depends on different industries,” she said.

TH Group modernises human resources management
Vietnam’s largest private dairy producer TH Milk has introduced SAP solutions for human resource management to help the company boost productivity, improve employee satisfaction, and optimise management.  SAP SuccessFactors integrates core human resource management tools such as introductory training for new employees, collaborative tools and social networking, management training systems (LMS), management performance management, recruitment, training and retraining of succession teams, talent management and HR analysis. Prakash C Balakrishnan, TH Group’s Human Resources Director, revealed: “At present, TH Group has 6500 employees. This is expected to increase as TH True Milk grows.”