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Dairy producers run a race to develop material areas
It is not the technology, but the capability to control the material sources which will determine who can dominate the dairy market.
According to IDP, a dairy producer, the demand for fine fresh milk would be increasingly high because of its high nutrition. Meanwhile, the supply of the products remains short due to the material shortage. Domestic sources now can satisfy only 30 percent of the material needed, while the other 70 percent has been imported from New Zealand, the US, EU and Australia.
Vinamilk, the leading dairy producer in Vietnam, collects 60 percent of the total fresh milk from farmers. The other producers - Friesland Campina VN, TH, Hanoi Milk, IDP – also have the high demand for milk material.
With 1.2 million tons of imports every year, Vietnam lists itself among the 20 top dairy product importers in the world.
Domestic materials for domestic fresh milk products
Developing the material areas of their own to use domestic materials instead of imports is the business plan that dairy producers would focus in 2014.
TH Milk is believed to be the first company which kicked off the material area development program with the project on breeding milk cows on an industrial scale in Nghe An province, implemented with the technology transfer contract signed with Israeli Afimlkv.
Under the project, TH plans to develop farms and pastures on an area of 8,100 hectares, aiming to create a herd of 203,000 milk cows by 2020. By the end of 2013, when the first phase of the project finished, $350 million out of the total $1.2 billion worth of project’s capital had been injected in the project.
TH Milk plans to import 10,000 more cows from Canada in 2014, while it would expand the farm No. 2 for cow breeding and pasture development.
Vinamilk has also reportedly made heavy investments in a plan to develop its material areas, focusing on two things – setting up modern farms of its own and cooperating with local farmers to improve the cow farming efficiency.
By the end of 2012, Vinamilk had had five farms with 8,200 milk cows in Tuyen Quang, Nghe An, Thanh Hoa, Binh Dinh and Lam Dong. It plans to pour more money to develop the farms in Thanh Hoa, Ha Tinh and Tay Ninh provinces to have 25,500 milk cows by 2015 and 28,000 by 2016.
FrieslandCampina Vietnam (FCV), when arriving in Vietnam to develop the milk material area development program, focused on collecting milk from farming households. However, in 2013, before marketing Sua Chon product, it ran a series of marketing campaigns with the message that its products are made of 100 percent pure fresh milk.
According to Mark Boot, General Director of FCV, the company’s projects on the establishment of a center on training farmers and a part of a 12 hectare farm in Ha Nam province would be completed in 2014.
This is a part of Dairy Zone project expected to be implemented within 5-7 years. The project belongs to the Food Safety Program cooperated between the Dutch and the Vietnamese governments. Under the program, Ha Nam provincial authorities provide 66 hectares of land to FCV which would develop a sustainable milk cow breeding area.