Vietnam's entry into the World Trade Organization (WTO) will heat up the domestic milk market with the increasing participation of foreign milk producers.
Experts believe that more and more foreign investors will found milk processing plants in Vietnam, once the country joins the WTO, thus creating a more competitive dairy market.
Rien De Groot, Executive Director of Dutch Lady Vietnam, also said that Vietnamese producers should begin thorough preparations to compete with foreign firms in the near future as international integration will put high pressure on the local firms.
“Vietnamese consumers are expected to favor foreign products when their prices fall,” the executive director noted.
Rien also highlighted that domestic milk producers should further cut prices of their products as a tool to sharpen their competitiveness against the invasion of foreign ones.
A recent survey conducted by a market research company showed that the dairy market has been growing quickly with an average growth rate of 20 per cent per annum.
Vietnamese consumers are now tending toward fresh milk and sterilized milk rather than condensed milk. It is estimated that 200 million liters sold under 50 different trademarks are consumed every year.
Most dairy products consumed in the market are produced from imported powdered milk. The nation’s dairy cow population can meet only 20 per cent of demand, and producers have to reconstitute milk from imported powder.
Until now, locally produced milk has dominated the domestic market as it is far cheaper than milk imported from Australia, New Zealand, Thailand and Malaysia. With limited market share in the Vietnamese dairy market, foreign milk products usually retail for VND5,000-8,000 more per carton.
Unofficial statistics shows that twenty companies are specializing in the import and trade of milk powder, and are turning over around US$200 million every year. About 250 products produced from milk powder are available in the market.
Vietnam imposes a 30-40 per cent tax on milk powder imported from Europe and America, and 10-15 per cent on the products imported from ASEAN member nations.
According to the Ministry of Planning and Investment, there are six operational projects to produce dairy products. The biggest, capitalized at $32.2 million in the Vietnam – Singapore Industrial Zone is run by F&N Vietnam Food Company.
Experts have announced impressive growth of 20 per cent per annum in milk production. In 2005 alone, growth registered at 22 per cent with total revenue of VND13 trillion (US$822.8 million), promising new business opportunities for dairy producers.
Youth
Vietnamese
