Vietnam offers great investment opportunities for foreign agribusiness companies, according to Matthew Smith, vice president of Asia-Pacific at Alltech. Smith spoke last week at One, The Alltech Ideas Conference in Lexington, Kentucky.
“Vietnam is the most dynamic region in terms of growth and opportunity,” Smith said. “It’s not a big country, but a country that packs a big punch.”
The ASEAN region – Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam – has the fastest growing demand for human food and animal feed in the world, according to Smith. He said demand for food in the ASEAN region is growing at a higher rate than it is in China.
“The ASEAN region has become … a major disruptor in our industry, not just within Asia, but globally,” Smith said.
Increasing protein consumption
Consumption of protein by Vietnamese people is growing quickly, with milk the “standout protein.” And, with protein consumption growing quickly, so too is the animal feed industry. Vietnam has the fastest-growing animal feed industry in the world, with 21 percent growth in volume last year.
“There is a huge increase in protein consumption, driven by the fact that we see a big movement in wellness,” with the growing middle class using their wealth to improve their well-being, Smith said.
Health and wellness food sales are set to rise $2 billion by 2020 to $6 billion, and the dairy market makes up 25 percent of the packaged food share.
However, the domestic raw milk production in Vietnam accounts for only 28 percent of domestic demand.
“It’s a great opportunity for the exporters to be able to send milk into Vietnam,” Smith said.
But, with opportunities, Vietnam also faces challenges, including reducing its environmental footprint, waste management, and resource utilization, as well as increasing its ease-of-doing-business score.
