Viet Nam’s animal feed and poultry breeding market has a lot of potential

Monday, Dec 14, 2020 18:08

Mr. Arif Widjaja, General Director of Japfa Comfeed Vietnam.

Japfa Comfeed Vietnam, a leading feed and poultry producer in Viet Nam, recently put its 6th high-tech feed mill into operation in South Central Binh Dinh Province. Arif Widjaja, General Director of Japfa Comfeed Vietnam speaks with Viet Nam News about the potential of the feed and poultry market as well as the company’s development strategy in Viet Nam.

Starting business in Viet Nam in 1996, Japfa Comfeed Vietnam now is one of the largest feed and poultry producers the country. Tell us about your company and your business in Viet Nam?

Japfa Comfeed Vietnam (Japfa Vietnam) is a wholly foreign-owned company invested by Japfa Limited. The group extended its investment to Viet Nam in 1996 under the form of a joint venture, then transformed to a wholly foreign-owned company in 1999. After 25 years of continual development and success, Japfa has become one of the leading companies in the feed and animal agriculture industry in Viet Nam.

Until now, we successfully adopted and mastered the complete integration of the Feed-Farm-Food value chain in Viet Nam. Japfa Vietnam is now well known in the feed and farm business with six feed mills, more than 300 professional poultry and swine farms and supporting more than 20 meat shops serving fresh meat and processed food products under the Japfa Best brand.

Japfa Vietnam recently put its 6th feed mill into operation in Binh Dinh Province. What is its position in the development strategy of Japfa in Viet Nam?

This factory is constructed on an area of seven hectares with designed capacity of 180,000 MTs of animal feed per year. Since the operation of this feed mill started, we are now able to provide our product to markets like the Central Highlands, South Central and Central Coast.

The completion of this project is truly important to Japfa Vietnam, it is not simply that we started putting a feed mill into operation, but it is more remarkably showing Japfa's commitment of continuous development despite the disruption of the COVID-19 pandemic and African Swine Flu. It also helps to emphasise our ambitious vision of market positioning in the feed and animal agriculture industry as well as an animal protein producer in Viet Nam.

Along with the other five, the official operation of this 6th feed mill will facilitate the achievement of some key targets in both the short term and long term such as obtaining one million MTs of feed in 2020, occupying approximately 5 per cent of the country’s market share and keeping average growth of 12 per cent per annum.

What is the potential of the feed market in Viet Nam?

Viet Nam's animal feed industry has grown rapidly over the past decade, with an average growth rate of over 10 per cent yearly. Viet Nam has risen to become one of the leading countries in the region in terms of industrial production of animal feed.

The demand for animal feed in Viet Nam will be very large, up to 25-26 million MTs yearly, worth around US$10 billion. Therefore, this is a large market with great potential for development, promising high growth in the coming years.

Experts say that Vietnamese livestock breeding industry still has not met the market demand due to many shortcomings, such as small scale of farms and outdated technology, low quality of breeding herds, low productivity and high price of animal feed. Do you have recommendations to help the livestock industry develop sustainably and improve the competitiveness of the livestock industry in Viet Nam?

Viet Nam's livestock industry is currently facing many challenges, but there are also many opportunities for this industry to ensure sustainable development. We highly appreciate the efforts of the Government of Viet Nam in promoting the livestock industry to develop in a sustainable direction in recent years.

Specifically, the Livestock Law just issued with relatively comprehensive conditions and regulations to help the livestock industry have a stable legal corridor to promote chain-based, in-depth and sustainable development, attracting and encouraging many domestic and foreign enterprises to invest in high-tech livestock, organic husbandry, and biosafety.

With the great support from the Government and the innovation efforts of businesses, including Japfa, I believe that the Vietnamese livestock industry will achieve many positive results in the future.

The 6th high-tech feed mill of Japfa Vietnam located in Binh Dinh Province is aims to supply high-quality animal feed for markets in the Central Region.

How has the COVID-19 pandemic affected Japfa’s business in Viet Nam so far this year (in terms of materials, production and distribution)?

Thanks to the Vietnamese Government's very successful control of the COVID-19 pandemic, and the strict adherence to all Government guidelines on COVID-19 prevention, we were affected very little by the pandemic.

On the contrary, 2020 marks a year of outstanding development and expansion for Japfa Vietnam. Despite the disruption of the pandemic, the world business value chain breakdown and the African Swine Flu still threatening the sector, our company kept growing since all of our business sectors are expanding rapidly, including Feed, Swine, Poultry and Food.

Along with the 6th feed mill which officially came into operation in November, Japfa Vietnam kicked off a high-tech fattening swine farm project in Binh Phuoc Province in October. This project is one of the biggest single fattening swine farms of the country with total investment capital of $22 million. The farm, located on an area of 40 hectares, is capable of raising 48,000 fattening pig-heads and estimated to supply more than 14,000 MTs of live pigs per year.

Earlier, in July 2020, Japfa Vietnam officially launched its first aquafeed products and set a 10-year target of achieving accumulated sales of 200,000 MTs of aquafeed per year.

I have to say that, 2020 is one of the most important years in the history of Japfa Vietnam. This is a year that opened a decade of strong development of Japfa in the Vietnamese market.

What is JAPFA’s growth strategy for the coming years?

Viet Nam is a strategic market of the Japfa Group. As a multinational corporation with networks in many countries, Viet Nam is seen as one of the three most important pillar markets of the group, along with Indonesia and China.

To cater to the above huge market demand, Japfa Vietnam is ambitiously targeting 2 million tonnes of feed in the next five years by building more feed mills in the near future.

Specifically, in 2021, we will increase the capacity of the factory in Vinh Phuc and look for new locations in the South to build new feed mills. We received strong support and recently signed a memorandum of understanding for an investment of $230 million in livestock projects in Binh Phuoc Province with implementation period of 2 phases: Phase 1 from 2021-2023, Phase 2 from 2023-2025. Besides, we have launched our first aquafeed products in July 2020 and set a 10 years target of achieving accumulated sales of 200,000 MTs of aquafeed per year. We will bring our best practice advantages from other operation in the region to apply to Viet Nam.

Besides the Farm and Feed business – the two core strengths of Japfa Vietnam – we started to develop the Food business to meet the increasing demand for safe and high quality food by Vietnamese people in big cities. We currently have 20 meat shops serving fresh meat and processed food products under Japfa Best brand in HCM City. We plan to increase the number of meat shops to 40 this year and continue to expand to the North in 2021.

With the strong support from the Government of Viet Nam, relevant authorities and all partners, especially the strong support from our parent company, we believe that Japfa will have a strong development in the coming years, contributing to the growth of the agricultural sector as well as the prosperity of the Vietnamese economy. — VNS

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