Despite accounting for some 65 percent of Vietnam’s market share, foreign animal feed producers are continuously expanding production to further dominate the country’s fertile market.

Vietnam consumes some 16 million tons of animal feed yearly

With an annual growth rate of 10-15 percent, the feed industry remains attractive to foreign investors. With the rising number of foreign investors in the sector, Vietnam is today the leading country in ASEAN and the 10th in the world in animal feed production.

Reports from the Ministry of Agriculture and Rural Development showed that the country has 239 feed plants, of which 61 are foreign-invested firms. Though Vietnamese animal feed producers outnumber foreign peers, they holds a market share of just some 35 percent while the remaining 65 percent belongs to foreign producers.

Despite the domination, many foreign feed plants are planning to further expand production in Vietnam to catch up rising demands.

According to Montri Suwanposri, general director of C.P. Vietnam, the company has 10 animal feed and seafood production plants with total output of 4.2 million tons per year in Vietnam. C.P is expected to continue expanding production in this field in the time to come.

Other foreign feed producers such as CJ, De Heus and Haid have also planned to increase output of their existing plants next times.

Efforts to regain market share

Industry insiders said that animal feed production requires high technology and huge investment, in which local producers are often weaker than FDI companies.

Le Ba Lich, chairman of the Animal Husbandry Association of Vietnam, also admitted that foreign firms have stronger financial capacity, experience, modern production line and especially appropriate distribution strategies to expand their market.

Besides, Dong Van Hoa, deputy director of Thanh Binh Company, said that to attract customers, FDI firms have also provided a full package solution for its partners and customers that supplies feed and one or all of its support products and services such as livestock breeds, farming equipment, technical advisory services, processing and consumption.

Farmers thus prefer products of foreign companies as the companies’ completed production and consumption chains have helped them cut costs and have a stable consumption.

Hoa suggested that domestic firms must join hands with each other to provide completed supply chains from the farm to the table if they want to survive.

Recently, some domestic large companies such as Masan, Hoa Phat, Hung Vuong and Vingroup have also made big investments in the feed industry to provide completed supply chains with the expectation of regaining local market share.

Specifically, Masan has bought Proconco, Anco, Green Feed to become the second largest livestock feed supply in the country and became the largest Vietnamese corporation in feed production. Meanwhile, Hoa Phat Group has so far also put into operation a feed with the capacity of 200,000 tons per year.