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StoxPlus Vietnam-Dairy-Market-2018-Preview TPLXXXXX 20181105105612 PDF
StoxPlus Vietnam-Dairy-Market-2018-Preview TPLXXXXX 20181105105612 PDF
No Contents Page
1.4 Import 6
2 StoxPlus Introduction 12 – 22
Page 2
Market Structure & Description
Vietnam dairy market has 04 main sectors including Drinking milk, Powdered milk, Yogurt,
and Condensed milk
Figure 1: Market structure of vietnam dairy market, 2017
• UHT milk dominates drinking milk segment thanks to consumer behavior and food safety,
especially in rural area. In particular, the undeveloped cold chain transportation limits the
UHT Milk
coverage of pasteurized milk to rural area.
Drinking
• Approx. 70% of drinking milk raw materials is imported. However, local giants companies are
milk developing their own farms to sharpen their competitive advantages, such as TH Milk and
Pasteurized Milk
Vinamilk.
• The market is fragmented with over 300 local and global brands. Top players include Abbott,
Formula Vinamilk, FrieslandCampina, Mead Johnson and Nestle.
Powdered • Customers prefer global brand. For instance, in the infant milk powder segment, Japanese
milk Specialty products such as Meiji, Morigana or Wakodo are gaining popularity.
DAIRY MARKET
• The persistent rising trend of health-consciousness in Vietnam is the key driver boosting the
Drinking growth of yogurt segment - the star-performer in dairy market.
• Despites its dominant position, Vinamilk’s market share declined from 90% (2012) to 84% (2017)
Yogurt due to fierce competition. As yogurt is seen as a potential market (CAGR 2012-2017 of 13.1%),
Traditional companies focused more on this segment with the introduction of new brand and product in
2017.
Condensed • This sector is in mature stage, largely affecting by the rising health-awareness trend.
milk • Vinamilk brand name “Ong Tho” remains a firm position with approximately 80% market share
Butter • The market size is relatively small due to customer behavior. However, cheese and butter are
gaining popularity in Vietnam, driven by increasing influence of Western food culture, especially
amongst the youngsters in big cities. Thus, this sector is expected to experience high growth
Others Cream rate from low base.
• This segment is currently dominated by foreign players such as Bel Group with “The laughing
Cheese cow” brand and Lactalis with its “Président”.
Source: StoxPlus
Page 3
Size & Segmentation
Market size of dairy market reached approx. US$4.6bn in 2017, posting CAGR 2014-2017 of
7.8%
Figure 02: Market size (US$ mn) of Vietnam dairy market, 2014-2017
2014-2017 CAGR
VIETNAM DAIRY MARKET SIZE BY SEGMENTATION
5,000
7.8%
Others
19% Condensed Milk
4,000
16.8%
Yogurt Drinking
3,000
Milk
US$ mn
10.5% Products
2,000
Market
Dairy size
Consumption Growth Rate (%)
Source: StoxPlus
• Market size of dairy market reached approx. US$4.6bn in 2017, posting CAGR 2014-2017 of 7.8%. The market recorded growth rate recovery of
10.5% in 2017, driven by the expansion of powdered milk and other dairy products such as cheese, butter or ice-cream with growth rate of 11.7%
and 19.5% respectively.
• In 2017, the drinking milk consumption per capita reached 12 liter per person per annum in Vietnam, as much as half of Thailand’s figure or one-
third of Singapore’s one. Given low penetration rate, dairy market in Vietnam is expected to enjoy a healthy growth rate in coming years thanks
to: 2% average population growth with rising health improvement initiatives; rising health-awareness (driving yogurt, drinking milk and powdered
milk segments); zero import tariff with FTAs such as CPTPP
Page 4
Domestic Production
Production volume of drinking milk and powdered milk grew at CAGR 2013-2017 of 11.8% and
6.4%, respectively
Figure 3: Production volume of drinking milk and powdered milk, 2013-2017
Drinking Milk CAGR 2013-2017 11.8% Powdered Milk CAGR 2013-2017 6.4%
'000 tons
mn litre
0 0
2013 2014 2015 2016 2017 2013 2014 2015 2016 2017
Drinking Milk Growth Rate (%) Powdered Milk Growth Rate (%)
• Overall, the outperformed growth of the domestic production in the 2014-2015 period was due to the expansion and new construction of cow
farming. In particular, the 2 largest dairy plants in Vietnam with a capacity of 54,000 tons of milk powder and 1.2 million liters of drinking milk
were put into operation by Vinamilk in late 2013.
• Key players in dairy segment in Vietnam including Vinamilk, TH Group, Hanoi Milk are developing their own dairy farm and cooperating with local
farmers. TH Group owns the largest farm in Nghe An with 45,000 cows, and plans to invest in 4 new farms (Ha Giang, Phu Yen, Thanh Hoa, Soc
Trang). Meanwhile, Vinamilk has planned to develop 8 new cow farms during 2017-2021 period. Of which Vinamilk Hanoi farm has capacity of 10,000
cows, while other farm will have around 4,000 cows each. StoxPlus foresees the milk production volume will record a noticeable increase in the
next five years.
Page 5
Import
Import value of dairy products & materials is on the downward trend with CAGR 2014-2017 of
-5%
Figure 4: Import value (US$ mn) of dairy product & material
1,500 15.0%
• Cow farming in Vietnam has not yet developed as the qualified dairy
1,000 10.0%
cows are still imported. Additionally, Vietnam still relies much on
500 5.0% import raw material due to limited local production capacity.
0 0.0%
However, in recent years, local giant dairy companies including TH
2014 2015 2016 2017 and Vinamilk are focusing in developing raw materials with the
-500 -5.0% establishment of big dairy cow farm, resulting in a decrease in
-1,000 -10.0% import. Please refer to slide 5 for detailed analysis.
-1,500 -15.0% • New Zealand remains the biggest milk exporter to Vietnam,
accounted for 30.3% of total import. Notably, among countries,
-2,000 -20.0%
import products from Japan registered high growth, increased market
Import vlue Growth rate (%) share (from 0.1% in 2013 to 2.6% in 2017), indicating the strong
preference of Vietnamese consumers toward Japan products,
Source: StoxPlus from Customs especially infant milk powder.
Figure 5: Breakdown Import Value of Dairy Product by Country
• Raw materials expose to zero-import tariff thanks to FTA such as
CPTPP.
2013 2017
New Zealand
Singapore
22%
21% 25% 30% US
Germany
4% 2% Thailand
5%
5% 7% Holand
19%
5% 6% Malaysia
4% 13%
6% 12%
Australia
7% 9%
Others
Page 6
Competitive Dynamics
Vietnam dairy market is dominated by top 5 players, making up approx. 85% market share
Figure 6: Market share of dairy companies by net sales in Vietnam, 2017 Figure 7: Net sales of top 5 dairy companies, 2017
US$ mn
Vinamilk
TH Milk
Nestle Vietnam
Frieslandcampina
Vinamilk
Nutifood
Nutifood
Frieslandcampina
Nestle
Vietnam
TH Milk
Source: StoxPlus
Source: StoxPlus
** Note: Sales revenue covers ALL BUSINESS LINES
• There are 238 companies producing and trading dairy products in Vietnam. The market is concentrated as top 5 players dominated the market
with 85% market share. Vinamilk remained the as the leading company with approx. 50% market share by net sales in 2017.
• The market witnessed fierce competition:
➢ Product offering: While TH Milk delivered premium organic products, Nutifood offered powder milk targeting low-income customer
class, and Vinamilk with diversified portfolio reaching high-come to economic product). The market also witnessed new product such as
Kido Group’s iced yogurt (‘brand’) or Vinamilk’s Greek yogurt.
➢ Distribution network: Besides the retailers’ network (supermarkets, grocery stores, etc.), Vinamilk and TH Milk pioneered in developing
their own retail chains. In 2018, Vinamilk and TH Milk owned 415 and 213 stores nationwide.
➢ Dairy cow farming: Key players also actively invest in dairy farm. While Vinamilk plans to develop 8 new cow farms during 2017-2021
period, TH Milk continues to invest in 2 large-scaled farms with advanced technology application similarly to the precedent farms.
Page 7
Financial Indicators
Vietnam dairy market is dominated by top 06 players, making up approx. 90% market share
Figure 7: Selected financial indicators (US$ mn) of key players in dairy market, 2016
Vinamilk Dairy product SOEs (formerly) > 1,000 1,073.2 410.9 1,289.1 983.1
Frieslandcampina
Dairy product Foreign-owned 300 - 400 202.0 50.3 143.5 53.0
Vietnam
Binh Duong Nutifood Dairy product Private 300 - 400 204.8 45.0 227.9 89.8
TH True Milk Dairy product Private 100 - 200 141.6 -8.9 39.7 -76.2
Moc Chau Milk Drinking milk Private 100 - 200 81.1 8.9 47.7 31.1
Source: StoxPlus
Page 8
Appendix| Key Players’ Profiles
• Registered name: TH Food Chain Joint Stock Company DRINKING MILK YOGURT OTHERS
• Head office: No. 166 Nguyen Thai Hoc, Quang Trung Ward, Vinh City, • Pasteurized milk • Tradition yogurt • Ice cream
Nghe An Province
• UHT milk • Drinking yogurt • Butter and
• Establishment Year: 2009 cheese
• Formula milk
• Charter capital: US$167.1mm (as of 2017) • Healthy
beverage
• Principal businesses: TH Food Chain Jsc. (TH True Milk) focuses on
manufacturing and distributing drinking milk and yogurt. TH True Milk • Nut milk
farm is the biggest hi-tech cow rising facility in Asia. The company TH Group’s business strategy is to develop the "True Milk" brand - bring
enjoys great advantages due to having developed a large cow herd fresh milk from the farm into production instead of using powdered milk
and applied modern technologies provided by Israel, the US and to mix with water. In order to create strong brand positioning, TH Group
Europe in raising cows and managing the farm. Currently, TH Milk has developed its own TH True Mart retail channel with up to 200 outlets
owns 45,000 cows, of which more than 22,000 are lactating at 30-40 nationwide besides distributing its products through traditional
liters per cow every day. distribution channels and supermarkets,
CoGS 113.2
Gross Profit 10.4 • In Ha Giang, TH Milk will develop a cow farm of 10,000 cows with
Contents to be total estimated investment value of US$100 mn. The Company has
% Gross Profit(*) 8.4%
NPAT (11.8)
removed for kicked off the project in November, 2017
% NPAT (*) -9.5% demo purpose • TH Milk will develop a dairy cattle farm of 20,000 heads in Phu Yen,
which is divided into 2 phases. The total estimated investment value
Total Assets 64.1 is around US$201 mn. The project in Phu Yen has commenced to
Total Liabilities 95.2 construct the first phase with capacity of 5,000 cows in 2018
ROA (*) -18.4% • Additionally, TH Milk will continue to invest in large-scale farm in
ROE (*) 37.8% Thanh Hoa (10,000 cows) and Soc Trang (20,000 cows) with advanced
technology application similarly to the precedent farms.
Appendix| Key Players’ Profiles
• Registered name: International Dairy Products Joint Stock Company DRINKING MILK YOGURT OTHERS
• Head office: Km 29, National Road 6, Truong Yen Commune, Chuong • UHT milk • Tradition yogurt • Milk café
My District, Hanoi, Vietnam
• Corn milk • Fruit milk
• Establishment Year: 2004 • Choco milk
• Principal businesses: International Dairy Products Jsc. (IDP) is a milk
and yogurt manufacturer and distributor in Vietnam,. The company
owns 04 brand names including Love'in Farm (LIF), LIF Kun, Ba Vi, and
Men Song. Besides the traditional products, IDP also develops a
“hybrid“ product line between milk and soft drink to create IDP focus its business on 02 segments: fresh milk and yoghurt, in which
nutritious energy drinks. The corporation currently operates 03 milk "Love'in Farm" and BaVi are the major fresh milk brands. “Love’in Farm”
processing and manufacturing plants, of which 02 factories in Ba Vi is positioned as a premium 100% fresh milk product line, competing
(Hanoi) and only 01 factory in Ho Chi Minh City. directly with major players such as Vinamilk and TH True Milk.
Meanwhile BaVi targets at the low- and middle-income consumers,
strongly focuses on rural markets.
• Registered name: Binh Duong Nutifood Nutrition Food Joint Stock POWDERED MILK DRINKING MILK OTHERS
Company
• Formula • UHT milk • Yoghurt
• Head office: 281-283 Hoang Dieu Street, Ward 6, District 4 Ho Chi
• Specialty • Soymilk
Minh
• condensed milk
• Establishment Year: 2003
• Café
• Principal businesses: NutiFood is a manufacturer and distributor of
specialty dairy products focused on 03 groups: Infant milk powdered, • Nutritious cereal
specialty milk, and high-energy nutrition product. Today, Nutifood is
one of the leading brands in whole milk powder. Besides the milk At present, NutiFood has 03 exclusive distribution centers located in Ho
powdered lines, the company also distributes a wide range of Chi Minh City, Dong Nai province, Quang Nam province. From these 3
products including UHT milk, yoghurt, condensed milk, and most centers, NutiFood builds a professional distribution network covering 64
recently the company has invaded the field of instant coffee in 2018. provinces and cities nationwide
No Contents Page
1.4 Import 6
2 StoxPlus Introduction 12 – 22
Page 12
Overview
StoxPlus is a pioneer and a Vietnam’s leader in financial and business information services since 2008
Page 13
Board of Directors and Management
Our Management have extensive and diverse experiences in information, technologies & related
services
Thuan Nguyen, FCCA Hieu Nguyen, MBA Yoichi Noor Iwamoto
Chairman and CEO Vice Chairman Board Member
Co-founder of StoxPlus Co-founder of StoxPlus Representative of NIKKEI
previously working as an previously working as a Inc. at StoxPlus. He is
investment manager of specialist at the Department currently Managing
Vietnam Holding Asset for International Director of NIKKEI CHINA
Management Ltd and Development of UK (DFID) in (Hong Kong) Ltd.
manager at PwC Vietnam & Vietnam. and Consulting
Australia Manager at PwC Vietnam
Page 14
Research and Consulting Services
Industry Report • Leveraging on industry and corporate database, we offer insightful industry reports for
Vietnam.
• Our Analyst team cover around 20 key sectors of Vietnam and offering reports ready to use in
the portal or in an order basis
Page 15
Research and Consulting Services
Our advantages in database business make us differentiated from other international vendors
Page 16
Research and Consulting Services
A Global Standard: International C orporations Client
We have a team of seasoned and experienced consultants for customized research assignments and
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Market • When the information standard reports is not sufficient nor available, we customize our report to
specific requirements by clients plus value added services including presentation, company visits, or
Research business matching.
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consulting • Our market entry services range from market due diligence, partner screening, to business set-up. We
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Investments or simply business alliance with domestic enterprises.
• Actionable recommendation for clients’ entry strategies, including advisory on all stages:
• Market assessment
• Business Intelligence
• Investment Screening
• Trade Connection
Page 18
Research and Consulting Services
We differentiate our services by leveraging on our Corporate Database; Industry Database and Local
Market Expertise with down on-the-ground surveys and a network of industry experts
International
Local Market Insights Biinform Database
Experience
• Combination of hard data leveraging Biinform database and local insight (track record, expertise & network)
• Database of all Vietnam Water Companies (production data such capacity, key operational indicators)
Page 19
Research and Consulting Services
We have a great track record in supporting large local and foreign clients from Day 1 when they first
come into Vietnam
Page 20
Research and Consulting Services
We are proudly making contribution to capital and trade flows within Vietnam and between Vietnam and
the World via our product and services; and also via various conferences and industry seminars providing
thought leadership about Vietnam market
Speaking at Cemtech Asia Annual Consumer Finance SME Financing Trade Risk management
2015, 2016, 2017 Conference, co-host with Conference, 2017 Conference, co-host with CIC,
SBV 2016, 2017 2017
Annual Foreign Investor M&A Seminar, co-host Vietnam Renewable FiinPro Talk Series
Conference, co-host with Singapore Business Energy Conference, co- (quarterly)
with HOSE Group, 2017 host with Eurocham, 2018
Page 21
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