VietNamNet Bridge - Dairy producers have poured big money into milk-cow farming projects in order to control input materials and win the competition in the domestic market.

 

According to the Vietnam Milk Association, the domestic total fresh milk output in 2014 was 550 million liters, of which 450 million liters were used to make fresh milk products, while the remaining was used to make yoghurt. 

A report showed the total sale of liquid milk was 914 million liters. As such, the domestic fresh milk output just can satisfy nearly 50 percent of the market demand. 

The demand is expected to increase sharply in the time to come from the current low level of 15 liters per head per annum, which is much lower than that of Thailand (35 liters per head per annum) and Singapore (45 liters).

Therefore, analysts believe that the input fresh milk output will be the factor to determine who will win the stiff competition in the market.

Mai Kieu Lien, chair and CEO of Vinamilk, the nation’s leading dairy producer, said that developing input material areas was the most important part in the company’s development strategy. 

In 2006, Vinamilk pioneered farming milk cows when pouring VND500 million into a milk cow farm. By the end of 2014, Vinamilk had had seven farms with 11,000 milk cows. 

Besides, it is moving ahead with the two huge farming projects, including one on breeding 8,000 cows in Tay Ninh and 25,000 cows in Thanh Hoa province.

Meanwhile, TH Milk, right from the very beginning, decided to make heavy investment to develop milk cow farms. It has injected $350 million so far into farming projects, utilizing Israeli technology to make products.

TH Milk, which organizes production on a large industrial scale, has material growing areas large enough to provide food to 30,000 cows.

Beginning developing milk cows in 2009, TH Milk now has 65,000 milk cows each of which can provide 40 liters per day. The figure is expected to increase to 137,000 cows by 2017, while the investment capital would increase to $1.2 billion. 

Once the goal is reached, TH Milk would be able to satisfy 50 percent of the total fresh milk materials of the country, and if so, TH Milk may become the Number 1 milk producer in Vietnam instead of Vinamilk.

Even IDP, which operated in the past as a small scale business, is now also following a program on developing milk cow farms throughout the country, though IDP, which owns Ba Vi brand, now mostly distributes products in the northern provinces.

Smaller producers including Moc Chau, Long Thanh and Hanoi Milk are also making investments to develop input material areas.

DNSG