Vietnam dairy producers target Chinese market

Vietnam’s dairy products will enter the Chinese market following the signing of documents between the two governments.

Vietnam dairy producers target Chinese market

As such, great opportunities have been opened for Vinamilk, TH True Milk and Masan.

In late April, three agreements on the cooperation in the field of agriculture were signed between Vietnam’s MARD and China’s General Department of Customs. 

One of the three documents was the protocol on veterinary and public health requirements for Vietnamese dairy exports to China. It includes the legal basis to facilitate the exports of Vietnam's dairy products to a potential market with 1.4 billion consumers.

According to World & Research, with economic development and improved living standards, the dairy product consumption level has been increasing rapidly, reaching 31.79 million tons in 2017. The CAGR increased steadily by 2.7 percent in 2013-2017. Meanwhile, the CAGR in dairy product output was only 2.1 percent.

A report of the Chinese customs agency showed that in 2018, the country imported 2.74 million tons of dairy products of different kinds, an increase of 7.8 percent over the same period last year, with total import turnover of $10.65 billion, an increase of 14.8 percent.

FAO reported that the WMP (whole milk powder) volume China imported in 2018 increased by 10.6 percent over the year before, while SMP (skim milk powder) by 11 percent. Chinese consumers have turned their back to domestic dairy products for the last decade after the ‘melamine crisis’.

Meanwhile, FAO reported that the WMP (whole milk powder) volume China imported in 2018 increased by 10.6 percent over the year before, while SMP (skim milk powder) by 11 percent. Chinese consumers have turned their back to domestic dairy products for the last decade after the ‘melamine crisis’.

According to Fiinpro, Vietnam’s dairy market is controlled by five big players, Vinamilk, Nestle Vietnam, Nutifood, Frieslandcampina and TH Milk.

VInamilk, the nation’s leading producer, for the first time in the last five years saw profit decreasing in 2018 (VND10.206 trillion in 2018 vs VND10.278 trillion in 2017).

 

However, the figure represented a 60 percent growth rate compared with 2014.

However, Vinamilk’s CEO Mai Kieu Lien is optimistic about the company’s growth. Vinamilk’s products are exported to more than 40 countries and the brand has the biggest advantages among Vietnamese producers in conquering the Chinese market.

VInamilk has 12 milk cow farms including two organic farms meeting European standards.

TH True Milk’s major products are fresh milk, yoghurt and nut milk. The company also has great advantages in materials with 45,000 cows.

Masan, a big consumer goods manufacturer, plans to join the dairy market from 2021. There has been no information showing that the group has kicked off the plan. However, sources said Masan may ‘take a shortcut’ with M&A deals.

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