As pork consumption is expected to rise in the short term, many big companies are injecting trillions of dong into pig farming, with a market value estimated at up to $15 billion.

In a recent report, Fitch Solutions said that total meat consumption in Viet Nam is forecast to grow over 25 per cent during 2018–2026. And pig farming has become an attractive business because pork is the main animal protein in Vietnamese meals, accounting for about two-thirds of total meat consumption.

By 2026, each Vietnamese person will consume on average more than 51kg of meat per year, up 9 per cent compared to this year’s expected consumption. Of which, 31kg is pork, more than 16kg is chicken, and more than 4kg is beef.

Strong businesses will also benefit from a potential recovery in pork prices in the future, Fitch Solutions added.

In addition, after the African swine fever spread in 2019, smallholder farmers left the industry because of expensive investments and volatile prices. This is a huge chance for big companies to jump in.

According to the financial report of Thaiholdings JSC, its subsidiary Thaigroup has cooperated with a third party to invest VND600 billion (US$25.3 million) in a pig farming project in Thanh Hoa Province. Thaiholdings receives 60 per cent of the total profit.

Previously, many domestic giants also poured trillions of dong into pig farming, including Hoang Anh Gia Lai JSC, Hoa Phat Group, Hoang Anh Gia Lai Agriculture JSC and Truong Hai Group.

In its August production and business report, Hoang Anh Gia Lai said that the company’s revenue reached VND448 billion last month thanks to pig farming and banana cultivation.

For the first eight months of the year, it recorded consumption of 136,075 pigs and 176,280 tonnes of bananas, of which it exported 112,740 tonnes and used 54,540 tonnes as animal feed. Currently, the company has completed nine clusters of farms to raise more than 27,000 breeding sows and 600,000 slaughter pigs per year.

Meanwhile, Hoa Phat Group said that the agricultural sector helped it earn a profit after tax of nearly VND207 billion last year.

Moreover, many foreign-invested companies, including CP Vietnam Corporation under Thailand’s CP Group, South Korean-invested CJ Vina Agri, and Australian-invested Mavin Group, have also invested heavily in this market.

Particularly, the International Finance Corporation (IFC), a member of the World Bank Group, has so far poured a total of VND2.8 trillion into three pig farming companies, Mavin, BaF Vietnam Agriculture and GreenFeed Vietnam. Of which, GreenFeed is aiming to sell more than 125,000 tonnes of pork per year, while Mavin has an annual plan to supply the market with 900,000 tonnes of pork.

Fitch Solutions also reported on a trend of industrialisation in pig production.

Challenges ahead

According to the 2021 annual report of Masan MEATLife, a meat processing company under Masan Group, the Vietnamese pig market is worth about $15 billion.

However, Fitch Solutions believes that the Vietnamese pig industry will face long-term challenges as consumers gradually eat less pork. The financial data service provider said that during 2022-2026, chicken and beef consumption will increase almost equally, at more than 13 per cent, while the growth rate of pork will be only half this rate.

Therefore, there will be more room for the chicken market to develop due to its affordable price. Many livestock enterprises have also started to invest in poultry farming to catch up with the trend.

Masan MEATLife is one of the leading enterprises in promoting the trend after acquiring the Vietnamese brand - 3F and applying technology in producing chilled meat to chicken products since the fourth quarter of 2020. In this field, the company achieved revenue of nearly VND1.5 trillion in 2021, a gain of nearly 58 per cent over 2020. The company will continue to invest in a market with an expected value of $5 billion in the future. — VNS