HCMC – The local leading milk producer Vietnam Dairy Products Joint Stock Co. on Saturday received a license from the Ministry of Planning and Investment to set up its presence in New Zealand, the company said in a statement on Sunday.
This is the company’s first project outside Vietnam that would pave the way for it to further penetrate the global milk market, said the milk processor commonly known as Vinamilk. It will buy a 19.3% stake in New Zealand-based Miraka Limited Company which has built a high-class powder milk factory at the center of North Island in the country, Vinamilk said in the statement sent to the Daily.
Vinamilk said that the factory in New Zealand, costing 121 million new Zealand dollars (some VND1.62 trillion) and having annual designed capacity of 32,000 tons of powder milk, would officially operate in August next year. The factory, which uses fresh milk supplied by farmers in New Zealand as feedstock, will sell its products widely on the global market.
The outbound investment project is in line with Vinamilk’s plan to expand its processing capacity and to secure more fresh milk material supplies for its production.
On the home front, Vinamilk has lately developed five cow farms in five provinces of Tuyen Quang, Thanh Hoa, Binh Dinh, Nghe An, and Lam Dong, with the total herd of 5,000 cattle head. The company expects to import 1,000 more cows this year.
Mai Kieu Lien, chairwoman and CEO of Vinamilk, told local reporters in a meeting last Friday that the company forecast its demand for fresh milk in the next five years at 1.3 billion liters annually, but the current local supply was about 200 million liters only. Therefore, the company is developing its own farms.
“We target to secure 40%-50% of fresh milk material demand from our own farms by 2015,” Lien said.
Vinamilk is deploying several projects to enhance its production in the country. The company will put into operation its US$30-million milk factory in Danang City by August next year, which will mainly produce yoghurt and liquid milk products.
By late 2012, two more factories of Vinamilk will operate.
The first one is a US$120-million liquid milk factory with an annual designed capacity of 400 million liters in the first phase and 800 million liters in the second phase. Meanwhile, the other one costing over US$100 million will produce powdered milk for kids with an annual designed capacity of 55,000 tons, four times higher than the current capacity of Vinamilk’s factory now.
Vinamilk currently has 250,000 distributors and retailers, selling nearly 10 million milk products a day. It now has a market share of 40% in Vietnam.
Lien said the company’s local sale revenue in this year to date has amounted to about VND9.6 trillion, equivalent to the whole revenue of last year.
Besides the local market, Vinamilk is also strong in export, obtaining about US$80 million in revenue every year. Its main export markets are the Middle East, Cambodia, the Philippines, and Australia.
In related news, Vinamilk is considering to raise product prices to compensate rising input costs. The company’s CEO said that Vinamilk was calculating to harmonize product prices with the price of fresh milk purchased from farmers.
