A worker is checking sausages before being packed at PCV company's Phú Nghĩa food processing plant located in Hà Nội's Chương Mỹ district. — Photo PCV

By Linh Anh

HA NOI (Biz Hub) — Vietnamese food market is witnessing an increasingly fierce competition between the sausages manufacturers, with the participation of many famous brand names like VISSAN, Duc Viet and CPV.

It is no coincidence that more and more players are involved in producing and trading sausages. The business results of Vissan Limited Company (VISSAN), well-known both domestically and internationally for its various foodstuff products such as canned and processed foods, sausages, hams and frozen meat, partly show the reason why sausages are becoming increasingly attractive to many businesses.

In the first nine months of 2015 alone, profit earned by sausages reached VND306 billion, accounting for about 60 per cent of VISSAN's total profit of VND546 billion. In 2014, although revenues earned from sausages only accounted for 25.4 per cent of VISSAN's total revenue, the profit recorded by the sales of this product accounted for more than 60 per cent of the company's profit.

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"For VISSAN, sausage is the staple product, contributing significantly to the profits of the company," VISSAN General Director Van Duc Muoi told Viet Nam News.

He added that VISSAN is now the leading company in providing packaging sterilised sausages, holding 65 per cent of the domestic sausages market share. In addition, VISSAN's sausages are also exported to Laos and Cambodia.

To build its current reputation, apart from improving product quality, VISSAN has also established a large and professional distribution network throughout the country.

As of early March, the company's products have already been available in 223 supermarkets, 703 convenience stores, 59 showrooms and a wide range of distributors and agents.

Another kingpin of sausages whose has long since captured the loyalty of customers is Duc Viet company. If Vissan is famous for packaging sterilised sausages, Duc Viet is known as a powerful trademark of fresh sausages, a type of sausages that Vietnamese customers are much favoured of.

Duc Viet is the first enterprise trading and manufacturing the German-style sausages from Vietnamese materials. Over the years, the company's sausages product have become the favourite food of the Vietnamese and have gradually affirmed a position in the market.

Pigs are being fed at PCV's farm in the southern Binh Phước province. — Photo PCV

Duc Viet General Director Hua Xuan Sinh told Viet Nam News that for 15 years of operation, Duc Viet's top priority is always ensuring food safety for customers.

"Our company pays much attention to quality, safety and hygiene. Duc Viet's sausage production line was directly imported from German, worth of millions of dollars. All stages in production must meet the strict requirements and standards of Germany," Sinh said.

"We also care much about customers' preferences, hobbies and buying habits," he said, adding that the company has a team of experienced and devoted experts working in researching and developing sausages to not only suit the tastes of the Vietnamese but also comply the quality standards of Germany.

"Those are the differences distinguishing between Duc Viet's products and the others," Sinh said.

Feed – Farm – Food model

Although VISSAN and Duc Viet are major and seasoned sausage manufacturers in the local market, they still face stiff competition from other heavyweight opponents, including the C.P. Viet Nam Livestock Breeding Join-Stock Company (CPV), who supplies both sterilised sausages and fresh sausages.

"Specialised in food processing with over 20 years of experiences, CPV is proud to be the pioneer in researching and successfully applying the self-contained production chain, called Feed-Farm-Food model, or 3F model," CPV Marketing Director Ho Doan Quoc Bao told Viet Nam News.

According to Bao's explanation, applying 3F model means that the business covers all production processes, from producing animal Feed, building Farm, processing Food from animal flesh.

CPV currently owns nine manufacturing plants producing animal feed, spreading over the province of Dong Nai, Binh Duong, Tien Giang, Can Tho, Ben Tre, Dac Lac, Ha Noi va Hai Duong, with annual capacity of 3.8 million tonnes.

The company also has three food and seafood processing plants located in Ha Noi and the southern provinces of Dong Nai. Of them, the Phu Nghia food processing plant in Ha Noi was designed and constructed under European standards, applied with modern technology.

"With 3F model, CPV can strictly control all the stages of production to ensure nutrient security and food safety for people's health," Bao said.

Sharing the same idea, Muoi told Viet Nam News the most important thing for food producers is that they must ensure food safety.

"Sausages are made from animal flesh, which needed to be examined tightly. The 3F model assists companies to ensure the product quality from raw material to final output, minimise production expenditure and protect reputation," Muoi said, adding that VISSAN is also using this model for their production system.

VISSAN has built a food processing factory spanning over an area of 22.4 hectares in the southern Long An province's Ben Luc district, with a total investment of US$ 150 million.

According to VISSAN, the factory operates in a close production chain, connecting all the procedures of slaughter, processing, packaging and storing.

Many other food producers are also aggressively pursuing 3F model, namely Dabaco Group, Massan group and so on.

In the context that Vietnamese consumers are confused by information about food contamination, 3F model help businesses obtain competitive advantage as consumers tend to buy products with clear origin.

However, developing the 3F model requires businesses to have strong financial potential, good infrastructure and extensive distribution system. Therefore, it is the common goal of all market players.

When the Trans Pacific partnership agreement officially takes effect, many foreign enterprises will grasp the opportunity to penetrate the potential market of Viet Nam. The rivalry in the sausage market, therefore, promises to be much fiercer than the current time. — VNS