October 18, 2012
Vietnam continues to attract animal feed investors
Investors are drawn to invest in the production of animal feed in Vietnam as domestic supply does not meet demand and the livestock sector is largely dependent on imports.
Tran Tien, deputy director of JSC breeding stock, says Binh Dinh Province has issued a license to CP to build a feed production plant with total investment of 20 million. In 2013, CP will invest in a feed plant in the central region.
"Although the livestock sector is in trouble, but the demand for animal feed in the country remains high," Mr Tien said.
In addition to its existing plant, CJ Vina Agri continues to invest in a food factory in Ha Nam and will continue to invest in more factories in other provinces in the future.
According to Nguyen Xuan Duong, deputy director of the Department of Animal Husbandry, of the total capital investment in the livestock sector in 2012, investment in livestock sector accounts for 4.1% (US$ 15.1 million). Meanwhile feed production sector accounted for 94.9% (US$ 346.8 million) and the remaining investment in other areas is 0.9% (US$3.3 million).
Yang also said that the high dependence on imported feed ingredients caused high domestic feed prices in the past.
The value of imports of commodity groups fodder and raw materials in September totalled US$142 million, bringing the imports of this commodity group for the first nine months of the year to $1.62 billion. Therefore, the feed industry is still attractive to investors in this sector.
According to the Ministry of Agriculture and Rural Development, the country has 233 factories producing animal feed, of which 58 (24.9%) of the foreign-invested companies account for 60% of total output. Vietnam Corporation accounted for approximately 18% market share of the feed market, Pronco 12%, New Hope about 9-10%, Cargill and Vietnam''s Green Feed about 8% each.