As Vietnam's economy surges ahead of its Southeast Asian neighbors, the country's animal feed sector is experiencing robust growth fueled by steady demand.
As the per-capita consumption of meat in Vietnam grows, the development of domestic poultry, livestock and other sectors creates conditions for the growth of demand for animal feed.
In recent years, animal feed has become one of the most important segments of the Vietnamese agricultural industry. According to a report from the Department of Animal Husbandry, the animal feed industry reached a total output of about 20 million tons in 2024, with an average growth rate of 7.6% per year over the past 10 years. The importance of the industry is reflected by data of the Vietnamese General Statistics Office, according to which the animal feed industry has created more than 300,000 direct jobs and nearly 1 million indirect jobs for domestic workers in recent years.
The Vietnamese animal feed industry has also contributed about 1.5% to the country's GDP, and approximately 15% to the production value of the agricultural sector.
In recent years, Vietnamese animal feed exports have significantly increased, with China, Cambodia and the Philippines among the most important import destinations. Vietnam Poultry Association analysts expect the country’s animal feed exports may reach US$1 billion by the end of 2025.
Market structure
According to the report of the Department of Animal Husbandry, Vietnam has approximately 265 animal feed factories, of which 85 are owned by various foreign enterprises, accounting for 65% of market share. Among the leading foreign players are CP Vietnam Livestock Joint Stock Co. (Thailand) with 9 factories in Vietnam, as well as Cargill Vietnam Co. Ltd.
The Vietnamese market remains within the sphere of interests of global majors, which is also reflected by the acquisition of the animal feed business of a major local player, Masan Group, which accounted for approximately 6% of the country's total output, by the Netherland-based DeHeus.
Domestic enterprises only account for 35% of the market share, and most of them are small and medium enterprises. Among the leading domestic enterprises are Dabaco Animal Feed, Hung Vuong Animal Feed, Anco Animal Feed and several others.
Moving from import dependence
Despite the existence of well-developed industry enterprises, the high dependence on imported raw materials remains one of the Vietnamese feed industry's biggest challenges. According to official state data, up to 85% of domestic animal feed output is produced from imported raw materials.
In this regard, the increase of domestic raw materials’ production has been declared as one of the most priority goals by the Vietnamese government.
In late 2023, Deputy Prime Minister of Vietnam Tran Luu Quang signed legislative act Decision 1625/QD-TT, approving the Project on Developing the Animal Feed Processing Industry to 2030. As part of the project, the production of key ingredients required by the Vietnamese animal feed sector should significantly increase by 2030.
The project involves diversification of sources of animal feed ingredients in the Vietnamese animal feed sector, paying particular attention to the production of domestic alternative ingredients, such as sugarcane pulp, grain, rice bran, etc.
According to a recent report from the Vietnam Livestock Association, the situation in the country remains complex, as Vietnam has to import approximately 80% of its raw materials, mainly corn and soybeans, from countries such as the U.S., Brazil, Argentina and India. For example, Vietnam is one of the two countries with the fastest growing corn import volume in Southeast Asia, moving from the 19th largest corn importer in 2012 to the fifth largest in the world.
Plans to reduce raw material imports
More than a decade ago, the Ministry of Agriculture and Rural Development of Vietnam approved a policy of converting a part of the rice growing area to growing raw materials for animal feed. However, implementation of these plans faced serious difficulties because growing rice for export brings higher profits than growing corn, making the use of rice in animal feed economically unprofitable. In addition, many corn growing areas have been converted by local farmers to grow fruit trees.
Duong Tat Thang, director of the Department of Animal Husbandry, believes another option may involve the use of agricultural byproducts as ingredients for animal feed production. There are many byproducts from the crop, forestry, and seafood processing industries that could be used for these needs, he added.
Additives and supplements pose a similar challenge, as Vietnam has to import up to 80% of the needed volume. The country lacks domestic production, as it produces very little mineral supplements, microbial products and herbs.
Seeking solutions
Despite the existing problems, most of local analysts believe the industry will continue to grow within the next several years.
Today, the overall annual demand for Vietnamese animal feed sits around 33 million tons, with pig (60%) and poultry farming (30%) being among the biggest consuming industries.
Although much depends on the ability of local producers to restructure their operations, stakeholders aim to focus on products with better competitive advantages, resulting in a higher demand in the domestic market and overseas. So far, many leading local producers have announced their plans of modernization by making investments in new machinery and production lines, which may contribute to the growth of their output this year.
