The rapid increase in milk production has led to a decline in import turnover and created a good sign.
*Imports increasingly decrease
The import of milk products is declining when domestic dairy companies increasingly expand production capacity to meet domestic demand better.
At the end of 2017, the milk industry attained the revenue of 100 trillion dong, up 10 percent from 2016, according to the statistics of Vietnam Dairy Association. The major driver came from powered milk and liquid milk with 75 percent of the industry’s revenue growth.
According to the report of Viet Dragon Securities JSC (VDSC), this proportion has been maintained for many years now. This shows that the consumption trend of dairy products in Vietnam still has not changed much.
In terms of production structure, the import proportion of dairy products is declining as domestic dairy companies expand production capability to meet domestic demand better.
According to the report of Viet Capital Securities Company, Vinamilk has just raised its dairy plant capacity from 400 million litters per year to 600 million litters per year and will continue increasing to 800 million litters per in 2018.
VDSC said in 2017, though the import turnover of dairy products rose two percent to $868 million, it only accounted for 19 percent of the total value of the entire industry, lower than in 2016.
Besides, domestic producers have increased expanding farms to be active in input sources, reducing the dependence on raw materials from abroad.
*Improvement of quality to compete
In the context that consumers give increasingly high preference on high quality food, companies in the industry choose to develop new products that meet demand, typically Vinamilk’s organic products.
In addition, the development of alternative dairy products from plants is also a new direction that is captured by companies in the industry such as Quang Ngai sugar with black sesame soybean, green tea or International Dairy JSC (IDP) with popcorn milk.
To reduce the reliance on imported materials and to compete with domestic and global corporations in Vietnam, in recent years, Vinamilk has focused on developing dairy farms to be active in fresh milk sources.
Vinamilk also completed the acquisition of the U.S’s Driftwood to launch two products including condensed milk and creamer to the market with the brand of Drifwood, and associate with Miraka to product milk in New Zealand as well as establish Vinamilk Europe Company in Poland.
Currently, Vinamilk’s traditional markets mainly focus in the Middle East and Asean. The company is continuing to explore the African market and aspire to penetrate into high quality demanding markets such as Japan and Canada.
Nutifood has started to change market position when moving to keep the first position in the special treatment milk segment (helping to improve digestion system, height, weight for malnourished and stunted children) in Vietnam.
In the middle of February, an important milestone with Nutifood was the signing of a contract to export ready-mixed powered milk for anorexia i.e. Pedia Plus to the U.S market with Delori partner.
Tran Thanh Hai used to say that “In order to enter the U.S market, Nutifood is forced to meet stringent standards of the U.S Food and Drug Association (FDA). Nutifood plant is tested and certified with FDA standard by Michelson Laboratories (the U.S) an independent organisation”.
Vu Kim Hanh, President of Vietnamese businesses for high quality products, said NutiFood is a pure Vietnamese company.
Right from the beginning, the company has chosen to study and produce nutrition milk to provide to local people. From a start-up business, Nutifood has existed steadily in a harsh milk market and has risen to compete strongly with foreign businesses.
Tran Quang Trung, Chair of Vietnam Diary Association said the milk industry, after growing at an average speed of 15-17%/annum, is gradually heading towards modern and sustainable development. To compete, companies in the dairy industry have focused on studying, processing and synchronising from raw materials to finished products instead of depending on importing and distributing.
