VOV.VN - With pork consumption expected to rise in the short term, several big companies are injecting trillions of VND into pig farming, with the market value estimated to be up to US$15 billion.
In a recent report, Fitch Solutions outlined that total meat consumption in the nation is anticipated to grow by over 25% during the 2018 to 2026 period. Due to this increase in demand, pig farming has become an attractive business because pork is the main animal protein in the typical Vietnamese diet, accounting for about two-thirds of total meat consumption.
By 2026, each Vietnamese person will consume more than 51kg of meat per year on average, up 9% compared to this year’s expected consumption figure. Of which, 31kg will be pork, more than 16kg will be chicken, and more than 4kg will be beef.
Strong businesses will also benefit from the potential future recovery of pork prices, Fitch Solutions added.
Futhermore, after the African swine fever spread in 2019, smallholder farmers have left the industry because of expensive investments and volatile prices. This therefore represents a huge chance for big companies to jump in to fill the void.
According to a financial report released by Thaiholdings JSC, its subsidiary Thaigroup has co-operated with a third party to invest VND600 billion, equal to US$25.3 million in a pig farming project in Thanh Hoa province. Under the terms of the deal, Thaiholdings will receive 60% of total profits.
Previously, many domestic giants also poured trillions of VND into pig farming, including Hoang Anh Gia Lai JSC, Hoa Phat Group, Hoang Anh Gia Lai Agriculture JSC, and Truong Hai Group.
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.
Most notably, 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 these firms, GreenFeed is aiming to sell more than 125,000 tonnes of pork annually, while Mavin has a yearly plan to supply the market with 900,000 tonnes of pork.
Fitch Solutions also reported on a trend of industrialisation in pig production.
According to the 2021 annual report by Masan MEATLife, a meat processing company under Masan Group, the Vietnamese pig market is worth approximately US$15 billion.
However, Fitch Solutions believes that the Vietnamese pig industry will face long-term challenges due to consumers gradually eating less pork. The financial data service provider said that during the 2022 to 2026 period, chicken and beef consumption will increase almost equally, at more than 13%, while the growth rate of pork will stand at only half of this rate.
Therefore, there will be more room for the chicken market to develop due to its affordable price. Indeed, many livestock enterprises have also started to invest in poultry farming as part of efforts to keep abreast 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, representing a gain of nearly 58% compared to 2020. The company will continue to invest in the market with expected capital of VND5 billion moving forward.