Dairy producers are battling to maintain market share as new competitors enter the market. The domestic market is estimated to be worth about $3 billion, and is already crowded with domestic and foreign players such as Vinamilk, FrieslandCampina, Ba Vi, Moc Chau, Da Lat and Long Thanh.
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| A production line of Vinamilk |
FrieslandCampina Vietnam holds 30 percent of the local market, putting it in second place overall after Vinamilk, according to FrieslandCampina Vietnam public relations manager Nguyen Ngoc Kinh Luan.
"To achieve such a large market share and increase competitiveness, the company has improved quality from raw materials to production technology," Luan said.
The company's dairy farms produced 60 million litres of fresh milk annually, accounting for around 25 percent of the domestic demand for raw materials, he added.
"Milk demand is going to keep rising sharply, especially in this Year of the Dragon, with many families thinking it's a lucky year to have babies," he said.
Meanwhile, market-leader Vinamilk currently accounts for 80 percent of the domestic condensed milk market, 90 percent of the yogurt market, 50 percent of the processed milk market, and 25 percent of the fresh milk market.
Vinamilk general director Mai Kieu Lien predicted Vinamilk would be able to increase its market share by 1-2 percent per year and would increase its share of the fresh milk market from 25 percent to 40 percent. Under its development strategy through 2017, the company expected to become one of the 50 largest dairy producers in the world.
Vinamilk has dairies in New Zealand in addition to its 10 in Vietnam operating at full capacity and projected that it would increase the number of cows at its farms from 9,500 head in 2012 to 28,000 in 2016. It has built the Lam Son Dairy Plant in the central province of Thanh Hoa at a cost of VND276 billion to serve the markets in Thanh Hoa, Nam Dinh, Thai Binh and Ninh Binh provinces. The plant would begin production next year.
"According to the Ministry of Agriculture and Rural Development, fresh milk production in Vietnam in the coming years will only meet 22-25 percent of the local demand," Lien said. "So, the dairy industry in Vietnam has great potential for development in the future."
