Vietnam Milks EAEU for all its Worth with New Dairy in Russia

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Dairy is among a range of products to benefit from reduced tariffs under the Vietnam-Eurasian Economic Union (VN-EAEU) free trade agreement. The agreement, signed in 2015, has strengthened ties between Vietnam and the bloc, which may soon pay dividends for one of Vietnam’s biggest dairy producers.

Vietnam’s TH Milk is moving forwards with ambitious plans to spend US$2.7 billion on dairy facilities in Russia. This is in line with strengthening trade relations between Vietnam and the Eurasian Economic Union in part facilitated by the VN-EAEU FTA.

The free trade agreement, which came into force in 2016, has seen trade between Vietnam and the bloc – consisting of Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia – bloom in recent years.

It’s estimated that the agreement has facilitated cross border investment in the millions of dollars, including TH Milk’s new dairy in Russia’s Kaluga Region. Notably, the project has only completed its first stage, according to a report by Interfax, but at US$155 million this is still a substantial investment for TH Milk.

Furthermore, the Vietnamese dairy operator intends to have 2,500 cows shipped to the new facility by the end of December, according to the report.

This is a positive step for the production volume of Vietnam’s dairy producers with most of the domestic milk demand currently met by imports.

Vietnam’s domestic dairy market

Vietnam’s domestic dairy market revenue totaled US$4.4 billion in 2017, according to Research and Markets. This pales in comparison to the US$8.4 billion worth of revenue it clocked up in 2021.

Still, these numbers fail to accurately portray Vietnam’s milk demand, with imports in 2021 accounting for a further US$11.8 billion worth of dairy goods consumed.

This is set to grow even bigger too.

With a CAGR of 10 percent, Vietnam’s dairy market is expected to grow from 159.6 kilotons in 2021 to 375.1 kilotons by 2030. This is representative of an additional 370,000 cows that are expected to be added to Vietnam’s dairy industry by 2030, bringing Vietnam’s total herd to 700,000.

Vietnam’s dairy exports

Vietnam’s booming dairy industry, however, is not just for domestic consumption.

In 2020, Vietnam shipped dairy products abroad to the tune of some US$302 million. These products went all over the world, but most notably to Vietnam’s northern neighbor, China, as well as the Middle East, Japan, and the Republic of Korea.

China has inked agreements with a number of Vietnamese dairies to provide milk products to the nation’s 1.4 billion people. Its proximity gives Vietnam a unique edge over its other dairy competitors due to the short shelf-life of a number of dairy products – yogurt, for example.

The biggest milk producers in Vietnam’s dairy market

There are an estimated 200 dairy producers in Vietnam but the top three dairies are responsible for the bulk of Vietnam’s milk production, according to Euromonitor.


Vinamilk currently accounts for about 43 percent of Vietnam’s dairy market. What began as a state-owned enterprise in 1976 has become a national icon. Vinamilk is available throughout Vietnam, claiming a network of 244 distributors with products available for sale at over 140,000 locations.

Like TH Milk, Vinamilk has looked to expand outside of Vietnam. Currently, it is increasing its investment in dairy facilities in neighboring Cambodia to the tune of US$42 million.


The Netherlands’ Friesland Campania has been producing milk in Vietnam since 1995. It is Vietnam’s second biggest dairy producer with just shy of 16 percent of the market. FrieslandCampina’s principal brand, Dutch Lady, can be found on supermarket shelves throughout Vietnam.


Established in 2000, Thanh Tam Nutrition Food Joint Stock Company changed its name to Nutifood Nutrition Food Joint Stock Company (Nutifoods), in 2011. Nutifoods has a third of the Vietnamese dairy market with 7.1 percent. It is estimated that the Nutifoods brand was worth just over US$93 million in 2020.

TH Milk

TH Milk is the youngest dairy producer in the top four in Vietnam. It was established in 2008 and has the fourth biggest share of the Vietnamese dairy market with about 6.1 percent of the market. It is, however, growing rapidly with its aforementioned expansion plans in Russia expected to boost revenue considerably.

What to expect from Vietnam’s dairy market moving forward

Vietnam’s milk consumption in 2021 was just 28 liters per person. This puts it well below regional neighbors like Thailand and Singapore, which registered 35 liters and 45 liters of milk consumed per capita, respectively. This suggests that the market has plenty of room to grow.

To meet that demand, imports will likely continue to rise. This, however, could be countered by Vietnam’s myriad of free trade agreements – including the VN-EAEU – which will provide Vietnam’s dairy producers with vast alternative markets in which to grow.

Overall, though dairy has not always been as readily available in Vietnam or Asia more broadly, Vietnam’s dairy market and its dairy producers appear udder-ly swamped with opportunity.

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