NutiFood and Hoang Anh Gia Lai will collaborate to develop milk cow farms for the northern province of Ha Nam. — Illustrative photo baomoi.com

HA NAM (Biz Hub) — NutiFood Viet Nam began construction of a VND1.6 trillion (US$76.19 million) milk plant in the northern province of Ha Nam on March 18.

The factory will cover an area of 10 hectares in the Kien Khe industrial cluster in the Thanh Lien District. It is expected to become operational in 2016, and produce 200 million litres of milk and 31,000 tonnes of powdered milk every year and will be fully operational by the third quarter of 2018.

Deputy Prime Minister Hoang Trung Hai has asked the company to prioritise construction quality. "This will help guarantee the quality and competitiveness of future products in export markets, since the firm is targeting not only the domestic market."

NutiFood officials told local media that the company already has a processing factory in Hung Yen Province, but a new facility is needed to boost production capacity to meet demand in Viet Nam's northern and north-central regions, as well as in Laos and Myanmar.

On the same day, NutiFood and the Hoang Anh Gia Lai (HAGL) Group concluded an agreement to collaborate to develop milk cow farms for Ha Nam.

NutiFood Chairman Tran Thanh Hai said that with the development of the largest milk factory in the north, the company has undertaken buying all milk materials supplied by local farmers.

HAGL acting General Director Vo Trương Son said his company, which imports cows from Australia, will help the farmers buy cattle at reasonable costs. It will also train them by conducting classes on techniques and scientific processes of breeding.

Ha Nam's Party Committee Secretary Mai Tien Dung said the province has nearly 1,500 milk cows and the number is expected to touch 3,000 by this September and 8,000 by 2020.

He said given the commitments of the two major firms, Ha Nam is now prioritising raising milk cows in an effort to industrialise farming, and will grow more corn and grass to support this strategy.

The province has reserved areas spread over 45 kilometres along the Hong (Red), Day and Chau Giang rivers for developing "model farms", he added.

Economists Tran Du Lich told Dau tu (Vietnam Investment Review) said this is the right development direction for a small locality that has limited land for cow breeding.

"Cow breeders will no longer have to struggle with the ragged business. The reorganisation of production along with the application of technology will integrate them with enterprises," he said.

NutiFood is headquartered in HCM City's District 4 and specialises in nutrition products. HAGL is based in the Central Highlands province of Gia Lai, and property and agriculture are its core lines of business. — VNS