An increasing number of investors are looking to crack Vietnam’s egg market to meet rising demand and explore export opportunities.

Ba Huan JSC recently made a splash when receiving US$32.5 million worth of investment from VinaCapital’s Vietnam Opportunity Fund (VOF). According to Pham Thi Huan, chairwoman of Ba Huan, with additional capital from VinaCapital, Ba Huan is developing a poultry processing plant worth VND400 billion (US$17.56 million) in Ben Luc district in the southern province of Long An. The project is slated to be inaugurated in April or May this year.

The company will also expand two poultry projects in Long An’s Thanh Hoa and Duc Hoa districts, with a VND300 billion (US$13.17 million) investment from VinaCapital. The expansion is expected to raise Ba Huan’s egg production capacity by 20-30%.

Huan said that the egg supplier currently has a local capacity of one million eggs per day. Overall, with the ongoing expansion and fresh investment from VinaCapital, the company aims to achieve a 30-50% increase in productivity one year from now.

Andy Ho, VOF’s managing director, told VIR that VinaCapital will invest US$32.5 million in Ba Huan over the next 12 months. Based on mutual commitments, the fund will consider boosting capital for the second phase of Ba Huan’s expansion.

Ho is optimistic about the outlook of Vietnam’s pasteurised poultry egg market, as consumers are spending more on high-quality, healthy products. Vietnam has huge potential for exports to other Asian markets like Singapore, Malaysia, Hong Kong, and Japan.

VOF thus hopes that Ba Huan will be able to supply its products to those markets over the course of its long-term development.

Meanwhile, Hoa Phat has recently also branched out into egg production by developing two chicken farms in the northern province of Phu Tho and the southern province of Dong Nai.

The farms are expected to raise a total of 600,000 chickens for eggs annually, and will likely begin operation in March. The company aims to supply 20 million high-quality chicken eggs to the market in 2018, with a view to providing 300 million units by 2020.

According to Hoa Phat, the supply of egg products has grown by 6-7% in the last few years. Eggs are a cheap but incredibly nutritious foodstuff, suitable for both high-and low-income segments.

As this supply is projected to grow further in the near future, Hoa Phat will supply eggs to the domestic market via supermarkets, convenience stores, and industrial parks.

Meanwhile, Vinh Thanh Dat JSC produces about 700,000 fresh eggs a day, which can reach up to one million a day in peak season. Besides, the firm is building a processed egg facility to produce instant eggs, salted eggs, and century eggs for convenience stores, as well as for export.

Other notable egg producers in the market include the likes of Dabaco Vietnam, with an output of 300-400 million eggs per year, and DTK Corporation, which is teaming up with Japan’s largest egg producer Ise Foods to build high-tech production facilities, with the intention of exporting to Japan.

Hoang Thanh Van, head of the Department of Livestock Production under the Ministry of Agriculture and Rural Development, told VIR that Vietnam’s egg market looks to have further room for growth in the future. Annual egg consumption per capita in the country stands at 152 units, which is below the global average of 200. In 2017, Vietnam produced nearly 11 billion eggs, surpassing the 10 billion mark for the first time.

According to Van, the current annual output of 10-12 billion eggs only meets domestic demand. The country needs to increase its output for export, as well as produce more high value-added products such as pasteurised fresh eggs, salted eggs, century eggs, and egg powder.

Van noted that Vietnam is exploring potential international markets for locally produced eggs, with a target of exporting one billion eggs. The country will also propose a certain export ratio to local egg producers in the time to come.

It is obvious that the competition in the egg market is becoming more intense with the introduction of new players and the expansion of existing companies.

Truong Chi Thien, director of Vinh Thanh Dat, said that his strategy is to raise duck egg production, as the segment is largely untapped by foreign firms and large corporations. In 2017, his company’s total revenue from duck eggs climbed 40% year-on-year.

VIR