Dairies battle for market share

Dairies battle for market share

Dairy producers are battling to maintain market share as new competitors enter the market. The domestic market is estimated to be worth about US$3 billion, and is already crowded with domestic and foreign players such as Vinamilk, FrieslandCampina, Ba Vi, Moc Chau, Da Lat and Long Thanh.

But TH True Milk has made a big splash on the market, already seeing earnings of VND2 trillion ($US98 million) and accounting for 33 per cent of the fresh milk market. This was expected to rise to 50 per cent by 2017, with overall earnings to climb to VND23 trillion ($1.1 billion), said a representative of TH True Milk.

FrieslandCampina Viet Nam holds 30 per cent of the local market, putting it in second place overall after Vinamilk, according to FrieslandCampina Viet Nam 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 per cent 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 per cent of the domestic condensed milk market, 90 per cent of the yogurt market, 50 per cent of the processed milk market, and 25 per cent of the fresh milk market.

Vinamilk general director Mai Kieu Lien predicted Vinamilk would be able to increase its market share by 1-2 per cent per year and would increase its share of the fresh milk market from 25 per cent to 40 per cent. 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 Viet Nam 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 Viet Nam in the coming years will only meet 22-25 per cent of the local demand," Lien said. "So, the dairy industry in Viet Nam has great potential for development in the future."

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