September 20, 2012
Foreign feed millers in Vietnam increase market share in 2012
Foreign feed millers in Vietnam have increased their market share to 60% in 2012, up from 40%.
The chairman of the Vietnam National Animal Husbandry Association, Prof Nguyen Dang Vang, spoke to the newspaper Nong thon Ngay nay about support for animal feed producers.
"The number of foreign companies investing in the animal feed production in our country has increased recently. This is an issue we have to examine thoroughly and I''m afraid that my association doesn''t have reliable data on this", Vang said.
However in recent years, the Vietnam feed industry has seen remarkable growth with average gains of 11.8% per annum. In 2010, 10.6 million tonnes were produced, while in 2011 this rose to 11.5 million tonnes. In 2010, the industry grew by US$4.6 billion, of which 64% came from foreign feed companies.
"If in 2010 the market share held by foreign companies was about 40%, this year, the figure is likely to increase to 60%. Currently, there are 57 foreign animal feed companies, of which 41 companies are wholly foreign owned and 16 are joint ventures. The remaining share is divided among the 170 Vietnamese companies. This is an indication of the weakness of Vietnamese companies in the industry a€" their production levels are small, so they are struggling to compete with their foreign rivals", Vang replied when asked about the dominant role of foreign companies in the animal feed industry.
There are positives when foreign companies came to Vietnam as they create competition between all companies a€" both Vietnamese and foreign. In order to compete, Vietnamese companies have to apply advanced technology in their production while improving their management skills.
"But if we fail to keep up with the rapid development of technology, profits will fall and some firms may even face bankruptcy. To avoid such a situation, I think the Government should support Vietnamese companies with human resources, particularly managers, while encouraging farmers to apply new technology in animal husbandry", Vang added.
Foreign companies are strong in capital, so the government should give financial support to Vietnamese livestock breeding companies and farmers.