Vietnam’s biggest dairy company plans to open a plant in Myanmar this year and is preparing to enter Indonesia and China.
The Myanmar factory will be Vinamilk’s second in Southeast Asia after acquiring its first in Cambodia. It is in discussion for one joint venture in Indonesia.
Myanmar is one of Vinamilk’s strategic markets to offset declining revenues in the Iraqi market, which once accounted for 60 percent of its exports. In 2017, Vinamilk reported falling exports for the first time in 20 years due to political tensions in the Middle East.
In the latest year for which export figures are available, 2017, it shipped products worth VND7.4 trillion ($312 million), a 4.2 percent decline from the previous year.
The company is also preparing to enter the Chinese market later this year. Chinese authorities are expected to sign a draft protocol in April this year allowing Vietnamese dairy products to be exported.
Vinamilk is planning a change in export strategy.
“The company will move from traditional exports to intensive cooperation with distribution partners in new key markets, and gradually build production facilities in potential markets such as Myanmar,” Vinamilk chief executive Mai Kieu Lien told shareholders in 2018.
She added that the company has set aside $750 million for acquisitions, building new facilities and setting up cattle farms between 2017 and 2021.
It now has 13 plants and 10 dairy farms in Vietnam, a plant each in the US, New Zealand and Cambodia and a subsidiary in Poland.
In all, it has three wholly-owned foreign subsidiaries: Driftwood Dairy Holding Corporation in the U.S, Angkor Dairy Products Co., Ltd, in Cambodia, and Vinamilk Europe Spo’stkaz Ograniczona Odpowiedzialnoscia in Poland.
It holds a 22.81 percent stake in a joint venture with Miraka Dairy in New Zealand and has a Thailand-based trading office.
Last year the company paid $19.74 million to buy a 51 percent stake in Laotian company LaoJagro Development Xiengkhouang Co., Ltd, to set up a series of hi-tech beef and dairy farms based on Japanese technology.
Vinamilk’s products are available in 46 countries and territories, including some demanding markets such as Japan, the US, Australia, New Zealand, and Canada.
Last year the company reported profits before tax of VND11.52 trillion ($499.26 million), up 12.05 percent from the previous year, on revenues of VND52.63 trillion ($2.28 billion), down 2.93 percent.
