Vietnam’s dairy makers are accessing more opportunities to increase exports, but companies need to enhance their competitiveness in foreign markets and develop a concentrated production scale.
Vietnam’sdairy makers are accessing more opportunities toincrease exports, but companies need to enhance theircompetitiveness in foreign markets and develop a concentrated productionscale.
The export value of dairy productsand fresh milk reached 48.6 million USD in the first three months ofthe year, with the main export markets in Iraq, Hong Kong, mainlandChina, Afghanistan, the Philippines and other countries, including the UAE,Laos, Myanmar and Japan.
Exports are expected to growstrongly this year as domestic enterprises are targeting expansionof their overseas markets.
Two of Vietnam's dairygiants, Vinamilk and TH True Milk, have been expanding investment inother countries.
Vinamilk has invested in freshmilk and dairy product and processing in the US, New Zealand, Cambodia, Poland,Laos and Myanmar.
This year, Vinamilk investedin its first factory in Myanmar to meet the increasing demand for milk andmilk products there.
Milk consumption in Myanmar,which has a population of 55 million, is 10 litres per head per year,very low compared to other markets in the region, such as Thailand with 36litres and Malaysia with 53 litres.
TH True Milk recently invested ina 2.7 billion USD project to raise cows and process milk in Russia.
Exports of milk and dairyproducts are also expected to increase sharply in the future after theProtocol on exports of Vietnamese milk and dairy products to China, a market of1.4 billion, was inked on April 26
According to the Food andAgriculture Organisation's 2018 global dairy market report, China produced 25.6million tonnes of milk, down 1.1 percent from 2017. In order to meet domesticconsumption of milk and dairy products, the country annually imports 14.6million tonnes of milk.
Nguyen Quoc Toan, acting Directorof the Ministry of Agriculture and Rural Development's Agro Processing andMarket Development Agency, told local media at a recent conference in Hanoithat there was great potential for exporting milk and dairyproducts to China.
However, Toan saidthat Vietnamese exporters faced challenges because milk fromAustralia and New Zealand has occupied a large market share in the Chinesemarket. “Vietnamese milk exports to China are promising but they willface competition from these two giants,” he said.
“To expand Vietnam’s exportmarket in the coming time, businesses in particular and the dairy industry ingeneral should prioritise the modernisation of milk and dairy product processingtechnology that meets the requirements of China in the spirit of theProtocol signed recently,” Toan said. "At the same time, productdevelopment should meet the demand of other potential markets such asIndonesia, Malaysia, the Philippines and Singapore.”
TH Group Chairman Ngo Minh Haitold diendandoanhnghiep.vn that the door for milk and dairyproduct exports to the Chinese market has initially opened,but not all businesses in Vietnam's dairy industry would be able to enter.
“China has technical barriersthat force us to overcome. Companies must ensure two important requirements,including maintaining quality and product standards, and ensuring origin,” Haisaid.
Deputy Director of the MARD’sDepartment of Livestock Production Tong Xuan Chinh said the Ministry ofIndustry and Trade should improve planning and supervisionof the construction of milk processing plants, which must match thevolume of local cattle herds and the consumption market.
Chinh said the MARD wouldcreate a new policy to support the development of dairy farming and milkprocessing in the 2020-2030 period, promoting the industry as well as theexport of milk and dairy products.
“The policy will be submitted tothe Prime Minister for approval,” he added.
Chinh said that links betweencow breeders and milk exporters should be tightened. Fresh milk from breedershas to be sold to businesses as soon as possible becausebreeders lack preservation facilities. If they sell milk tothe market, it is only a small amount.
Dairy enterprises need toreorganise the production of dairy cows in a closed chain, controlling diseasesafety and food safety.
At the same time, modernisationof facilities, raw milk purchasing centres, and modern milk factories must beestablished to meet the export demand of many markets, he added.-VNS/VNA
The doors to export markets have opened after the signing of government-to-government agreements. However, enterprises still have to overcome many challenges.
Domestic milk producers are seeking new growth opportunities as changes in consumption trends and competitive pressure start to be felt.
Tael Two Partners Ltd, one of the two major foreign stakeholders of GTNFood Joint Stock Company, has registered to offload its entire holding in the Vietnamese food company.