Vietnamese dairy producers seek foreign markets

Vinamilk is the leading dairy producer in Vietnam which holds 54.5 percent of liquid milk market share, 40.6 percent of powdered milk, 33.9 percent of drinkable yoghurt, and 84.5 percent of yoghurt market share.

Vinamilk was once the only big dairy producer, buy it now has to compete with many rivals. These include Friesland Campina (FC), the owner of Dutch Lady brand which is the second largest liquid milk producer with 25.7 percent.

In the powdered milk market segment, Vinamilk has to compete with Nutifood. Grow Plus+ product of NutiFood is the best known children’s specialized powdered milk with 39.3 percent of market share. The company also holds 37.4 percent of ready-made powdered milk market share, according to Nielsen.

Analysts say that pursuing foreign markets is a wise strategy in the current market conditions. The dairy producer has invested in the US (owns Driftwood), Cambodia (Angkormilk), New Zealand (22.8 percent of Miraka shares) and a subsidiary in Poland.

Vinamilk’s products are exported to over 40 countries. It is also seeking to purchase one more company in the US market.

“If our products can enter the US market, this would help us penetrate other markets as well,” said Vinamilk’s CEO Mai Kieu Lien.

However, Vinamilk’s exports remain modest. In the first half of the year, the export turnover decreased by 6.8 percent compared with the same period last year. The distributor in the Middle East has cut imports because of economic difficulties in Iraq.

HSC, a securities company, commented that Vinamilk needs to seek a new driving force for growth  through M&As.

NutiFood regains strength

The dairy producer has resumed high growth after incurring a heavy loss 10 years ago. It reported high revenue of VND10 trillion in 2017.

With specific products which target niche markets and reasonable prices which are 10-15 percent lower than rivals, NutiFood is developing well in the powdered milk market segment.

Its powdered milk market share increased from 10 percent in 2017 to 15 percent thanks to low- and medium-end products.

In early 2018, after 18 years of operation, NutiFood became the first Vietnamese enterprise which can export ready-made powdered milk Pedia Plus to the US market. The company hopes it will gain export turnover of $20 million from the US market in the first year.

It also exports products to Southeast Asia and China, but with modest volume.

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