Feeding the need of livestock sector

Late last week, US-backed Cargill Vietnam opened a new US$28 million feed mill in the southern province of Binh Duong to better serve livestock farmers in southern Vietnam.

The mill is Cargill’s 12^th animal nutrition facility in the country, and its largest and most technologically-advanced. The 48,000-square metre mill produces a wide portfolio of poultry and swine feed, and has an annual capacity of 240,000 tonnes.

A large portion of the plant’s operations is automated, allowing for increased operational efficiency and an enhanced customer experience, providing excellent services for a wide range of demands.

“Vietnam is a key animal nutrition market for Cargill and we are committed to long-term and sustainable investment in the country. This new feed mill enables us to better serve our customers with advanced technology and safe, high-quality animal feed,” Philippa Purser, group director of Cargill Feed and Nutrition, told VIR. “This new facility gives us a platform for the co-prosperity of both Cargill and the livestock industry as we work with the government, local communities, and partners to help build a sustainable feed industry with a long-term future in Vietnam.”

Growing market

According to the Livestock Production Department (LPD) under the Ministry of Agriculture and Rural Development, many other foreign firms have been boosting their presence in Vietnam’s animal feed sector. Animal protein consumption has been rising here and the trend is expected to continue in line with Vietnam’s rapid growth and regional trends.

In the first 10 months of 2018, about 10 new feed mills were opened, while the number was around six in last year’s corresponding period.

After recovering from recent market turbulence caused by the large pork oversupply during the last two years, Vietnam’s national feed market is expected to grow about 3% annually and it remains the largest commercial feed market in the ASEAN. Meat, dairy, and fish consumption is already driving protein intake higher in Southeast Asian nations, particularly in Vietnam, along with Myanmar and Indonesia, according to the Economist Intelligence Unit (EIU).

“Some firms have asked us about possibilities to shift their animal feed production from China to Vietnam, where they see demand for feed grow by 15-20% per annum,” an LPD expert told VIR. “There have also been more registrations by foreign firms to import new feed ingredients. In the first 10 months of this year, the rate of firms registering new products have climbed by about 15% on-year.”

According to C.P.Vietnam, the company has been investing in Vietnam for 25 years and is proud to contribute to the development of animal husbandry. The group is confident that food products manufactured and processed in Vietnam are competitive, high-quality, clean, fresh, and traceable.

In another case, the Republic of Korea (RoK)’s CJ Corporation has inaugurated its sixth feed mill in Vietnam in the central province of Binh Dinh. The 4.1-hectare factory has the capacity of 150,000 tonnes per year and the total investment capital of nearly US$30 million.

According to Kim Sun Kang, general director of CJ Vina Agri, Vietnam is becoming one of CJ’s major hubs for animal protein production in Asia. This firm started producing feed in Vietnam in 2001 in the Mekong Delta province of Long An. Between 2006 and 2015 it constructed three more feedmills in Hung Yen, Vinh Long, and Dong Nai provinces. Earlier this year, CJ opened another feedmill in the northern province of Ha Nam. The company is constructing another mill in the Mekong Delta, bringing the total number of its feedmills in Vietnam to seven.

Alongside these, Australian-Vietnamese joint venture Mavin Austfeed is also boosting production of aquatic feed to cater for growing demand in the Mekong Delta.

“We may explore possibilities to expand production in other locations in Vietnam,” Mavin’s chairman David John Whitehead told VIR.

The firm also plans to build a high-tech pig breeding centre and a foodstuff processing plant in the Mekong Delta province of Dong Thap, with the total investment capital of VND1.6 trillion (US$70.8 million).

In May, Mavin inaugurated the Mavin Austfeed Dong Thap Animal Feed mill at the province’s Cai Tau Ha Industrial Zone. This is Mavin’s fifth feedmill in Vietnam and is the first project in a chain of advanced technology agribusiness projects by Mavin in the Mekong Delta.

A hub of investment

According to the Vietnam Association of Animal Feed, the growing demand has turned Vietnam into a hub of foreign firms producing and researching products thanks to the country’s potential in livestock production.

For example, Germany’s Evonik has inaugurated a modern feed mill to produce peleted trial feed at Ho Chi Minh City’s Nong Lam University. The new facility, which is also the first of its kind to produce pelleted feed for research trial at a university in Vietnam, promises to enhance research into animal nutrition and sustainable feed production and to support student training. This opens the gate for feed producers in Vietnam to adopt new feed production concepts and technologies.

Currently, about 60 foreign firms owning more than 80 animal feed mills account for 70% of Vietnam’s animal feed market share. According to a Global Agricultural Information Network report recently issued by the Foreign Agricultural Service of the US Department of Agriculture, the feed demand in Vietnam is expected to reach 30 million tonnes in 2018, up from 29.1 million in 2017, driven by the growth in aquaculture. Feed production in Vietnam is growing fast, at 21% per year over the past few years, due to the strongly-developing livestock production focused on pigs, tra and basa fish, and shrimp.

Cargill Vietnam cited an EIU research as stating that food safety concerns are accelerating the shift of preference towards healthier animal protein in countries like Vietnam.

Cargill’s Purser added, “Our uncompromising approach to feed safety, ingredient quality, and product integrity gives us strong confidence to expand our investment to provide more healthy feed to serve the local farming industry and serve local consumers.”