Foreign enterprises hold sway over animal feed market

Mar 18th at 22:40

18-03-2013 22:40:42+07:00

The sharp poultry egg price increases in early 2013 has caused a headache to the Ministry of Agriculture and Rural Development (MARD). If the livestock product and animal feed markets continue being controlled by foreign firms, more “price fever attacks” would occur.

Businessmen believe that pushing the poultry egg prices up in early 2013 was a planned move taken by the foreign enterprises which have been dominating in the livestock industry.
The market prices then escalated dramatically, surprising all economists and shocking housewives. It was because CP Vietnam, a livestock company, which now holds the biggest market share, unexpectedly raised the sale prices.

Who is CP Vietnam, then?
Official information sources say CP Vietnam has the chartered capital of VND1.224 trillion, in which Thai CP Foods holds 29.18 percent of the stakes and Hong Kong’s CP Porkphand holds 70.82 percent.

About the influences of CP Vietnam in the domestic market, Nguyen Van Phong, Director of the Audit Office of Japan in Vietnam, said not only having influences to the poultry egg market, CP Vietnam is one of the biggest enterprises in the agriculture production in the country.

Joining the Vietnamese market in very early in 1993, CP Vietnam then set up an animal feed factory in the southern province of Dong Nai. It has been unceasingly expanding its business in the three main business fields, including animal feed production (with the system of 8 factories that make feed for pigs, poultry farming and aquaculture), livestock farming and processing food.

Managing Director of CP Vietnam--Sooksunt Jiumjaiswanglerg, said that the company would gather strength to make food processing and instant food products in the time to come. In implementing the ambitious plan, CP Vietnam moves ahead with the establishment of a clean food distribution chain.

The managing director said the company has set up over 3,000 retail points out of the 10,000 retail points it plans to set up nationwide.

CP Vietnam reportedly obtains the annual growth rate of 29 percent per annum. The company, together with some other foreign invested enterprises, now hold 60 percent of the animal feed market.

As such, according to Nguyen Xuan Duong, a senior official of the Ministry of Agriculture and Rural Development, the enterprises now control the domestic market and define the market prices.

Though the domination of foreign enterprises in the livestock and animal feed markets was anticipated, the rapid growth of CP Vietnam and other foreign invested enterprises still go beyond the expectations.

Vietnamese Masan will be a redoubtable rival?

Masan, a big consumer goods manufacturer, has reportedly spent 96 million dollars to buy 40 percent of stakes of Pronco, a move which showed that the big guy plans to penetrate more deeply into the food market.

However, analysts say it’s too early to say if Masan is capable to compete with CP Vietnam in the food processing sector.

Vissan, another Vietnamese enterprise, has also reportedly spent big money to expand its distribution network. It has opened 70 more fresh food retail shops in HCM City in an effort to compete with CP Vietnam.

However, analysts have once again shown their doubts about the Vissan’s capability to compete with the foreign company, because CP Vietnam jumped into the food market once it has well controlled the animal feed and livestock markets already.