Milk industry set for liquidity boom as consumption soars

Vietnam’s rising demand for milk looks set to turn the country into the promised land for dairy enterprises.

The latest research from Tetra Pak, the world’s leading food processing and packaging company, said Vietnam was a major growth market for milk.

“Vietnam’s impressive liquid dairy product (LDP) growth will help it soon become a highlight in the world’s milk index in 2011,” said a Tetra Pak Vietnam release.

Vietnam’s LDP consumption rose by 22 per cent from 11.4 litres per capita in 2009 to 13.9 litres in 2010, and will rise by 15 per cent from now to 2013, which is the world’s highest growth rate, as compared to the rate of 10 per cent in the 2004-2008 period. LDP demand is expected to more than treble, from almost 580 million litres in 2004 to almost two billion litres by 2013.

According to Tetra Pak research, ready-to-drink ultra heat treated milk consumption will more than double in Vietnam from around 335 million litres to almost 885 million litres between 2009 and 2013. Flavoured milk consumption in Vietnam is set to see similar growth, rising to more than 500 million litres by 2013.

“We are maintaining our upbeat assessment of the growth prospects of Vietnam’s dairy sector on the back of the country’s strong economic rebound and favourable demographics,” said London-based Business Monitor International Company’s Vietnam Food and Drink Report 2011 for the third quarter.

“It’s crystal clear that economic growth, urbanisation and the spending power of millions of middle-class consumers shopping in modern supermarkets and convenience stores has fuelled demand for LDP in Vietnam,” said Tetra Pak Vietnam’s marketing director Cassandra Le.

In May 2011, Netherlands’ FrieslandCampina Vietnam began construction of the second stage of its sterilised milk automatic facility in southern Binh Duong province. Construction of the $13 million project will be completed next year. The facility will meet strict international food safety and hygiene standards.

According to local privately-owned safe food provider TH Milk Joint Stock Company, its $1.2 billion high-tech dairy-cow farming and milk processing facility, kicked-off in 2009’s third quarter is Southeast Asia’s largest project of this kind, which would meet half of Vietnam’s fresh milk demand by 2017. The central Nghe An province project would see its dairy cow quantity increase from the current 10,000 to 137,000 by 2017, capable of producing 500 million litres of high-quality milk per year.

Vinamilk has reportedly started construction of a $120 million milk factory in southern Binh Duong province. This new factory will have a capacity of 400 million litres of milk per year when it becomes operational in 2012, and is expected to double its capacity by 2017.

The company is also planning to increase its stock of cows to 80,000, which will allow it to boost its milk supply by 1.3 million litres a day.

Vinamilk’s chairwoman Mai Kieu Lien said Vinamilk would reap revenue of $1 billion in 2011 and the company would be one of the world’s 50 biggest milk companies, with annual revenue of $3 billion in 2017. – VIR

Tags: Vietnam milk, Vietnam milk prices