Animal Feed in Demand as Ranchers Ramp up Operations in Vietnam

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Source: www.vir.com.vnHANOI – Demand for animal feed in Vietnam has increased sharply as farmers and livestock ranchers increase activity in the nation following its economic recovery.

In 2013, Vietnam imported 9.2 million tons of animal feed and additives, worth US$4.5 billion, a 27.46 percent increase year on year. Products imported include: protein-rich feed (soybean, meat and fish powder) and energy-rich products (wheat, corn, bran).

In the first seven months of 2014, Vietnam spent US$1.97 billion importing animal feed and supplemental foods, mainly from Argentina (32.8 percent), USA (14.8 percent) and China (10.9 percent).

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The compound feed industry in Vietnam has grown at the rate of 13-15 percent annually. In 2013, the demand for animal feed, poultry feed and fish feed was 17 million tons. This figure is expected to be 18-20 million tons in 2015 and rise to 25-26 million tons in 2020.

In total, there are around 200 animal feed producers in Vietnam – 20 of which are foreign firms. Foreign firms of note are C.P. Group (Thailand), Cargill (USA), De Heus (The Netherlands), Proconco (France) and New Hope (China).

Despite its small presence, foreign firms currently hold 70 percent of the market share, worth US$4.2 billion. Many of them are planning to expand their businesses in Vietnam as the current production only meets one third of the market demand.

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In May 2014, the U.S.’s Cargill completed its US$20 million expansion project in the central province Binh Dinh. The annual capacity of the compound feed mill increased from 60,000 tons to 240,000 tons. Coming to Vietnam 19 years ago, Cargill now has eight compound feed mills with a total capital registered at US$117 million in the country.

Hoa Binh province just gave permission to China’s Tongwei to build an animal feed mill production line in May 2014. The project is worth US$10 million. The plant is expected to produce 200,000 tons of animal feed from late 2015.

The Dutch animal feed producer De Heus is building a US$30 million factory in the northern province of Vinh Phuc. This will be its fifth factory in the country. Nguyen Thai Van, the company’s spokeperson also said the firm has planned to build two more plants by late 2015.

Even though Tequhope, a Chinese compound feed producer, only has one factory in Vietnam at the moment, it has planned to build 12 more animal feed plants in Vietnam by 2020.

From October 15th to 17th, Ministry of Agriculture and Rural Development’s Livestock Production Department is hosting an event in Ho Chi Minh City to provide foreign investors with more information on attractive investment policies. According to the department, around 250 husbandry firms from over 30 nations have already registered to join.

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