Domestic firms strive to find foothold in cattle-feed market
Domestic firms strive to find foothold in cattle-feed market
Masan Group, one of Vietnam’s largest private companies, has announced that it had successfully purchased 99.99 percent of the stock in Sam Kim Co Ltd and renamed the company Masan Nutri-Science.
The acquisition has helped Masan Group to hold as much as 52 percent of the shares in Vietnam French Cattle Feed JSC (Proconco) and 70 percent in Agro Nutrition Company (Anco).
With the possession of a major stock in the two companies, Masan Group is showing its desire to be a leading platform to serve the growing animal feed sector.
It also nurtures the ambition of holding up to 50 percent of the market share by 2020.
Experts are confident in the group’s success in this field because Proconco is the number one pig feed producer while Anco is the second overall animal feed player in Vietnam.
Besides, Masan Group has strong capacity to mobilise capital sources from big foreign partners as well as advantages built on its past attainment in the consumer goods sector.
The cattle-feed sector also pins hope on two other companies, namely Hung Vuong and Hoa Phat – which are expected together with Masan Group to create a strong domestic trio.
Hoa Phat entered the feed market in last March by launching its animal feed subsidiary that has an annual capacity of 300,000 tonnes per year and chartered capital of 300 billion VND (13.9 million USD). It aims to occupy 10 percent of the market share in the next five years.
Meanwhile, Hung Vuong has joined the market since 2007. With its merger and acquisition ( M&A) strategy, the company strives to hold more shares in small companies such as Viet Thang (over 90 percent); Agifish (85 percent); and Sao Ta (over 51 percent).
The company looks to increase cattle-feed production to 1.5-1.8 million tonnes per year by 2018 and rake in 18-20 trillion VND in sales by 2020.
The ambitions of domestic firms are obvious, but to change the status quo with foreign ones, which are limited in number but hold about 60 percent of the market share, is not simple at all according to experts.
The animal feed market in Vietnam is growing rapidly with the average growth of 10-13 percent annually. Vietnam currently tops the Association of Southeast Asian Nations (ASEAN) and ranks 12 th around the world in terms of producing industrial animal feed.
Experts are quite optimistic about the sector’s growth in 2015, which strives to record an increase of 5-5.6 percent in production value over the previous year.
Currently, Vietnam needs about 16 million tonnes of animal feed per year, worth about 6 billion USD. It is forecast the figures will climb to 25-26 million tonnes per year and will be worth tens of billions of dollars by 2020.
