Vietnam feed industry faces challenges from foreign competition

Domestic industry must focus on technology, management skills

Vietnam’s animal feed industry has been growing in recent years, and with that has come foreign competition and challenges for domestic suppliers, according to chairman of the Vietnam National Animal Husbandry Association, Professor Nguyen Dang Vang.

The country’s feed industry has grown an average of 11.8 percent per year, said Dang Vang. In 2010, 10.6 million metric tons of feed were produced, and in 2011 the number rose to 11.5 million metric tons. In 2010, the industry grew by $4.6 billion, of which 64 percent came from foreign feed companies. The total market share held by foreign companies in 2010 was 40 percent.

“This year — 2012 — the figure is likely to increase to 60 percent,” said Dang Vang. “Currently, there are 57 foreign animal feed companies, of which 41 companies are wholly foreign-owned and 16 are joint ventures. The remaining share is divided among 170 Vietnamese companies. This is an indication of the weakness of Vietnamese companies in the industry — their production levels are small, so they are struggling to compete with their foreign rivals.”

Foreign companies create competition, but only if the domestic companies are able to keep up, said Dang Vang. “In order to compete, Vietnamese companies have to apply advanced technology in their production while improving their management skills,” he said. “But if we fail to keep up with the rapid development of technology, profits will fall and some firms may even face bankruptcy.” He said the government should do its part to financially support Vietnamese companies, as well as provide human resources while encouraging them to apply new technology to animal husbandry.