Opportunities for the dairy industry in Vietnam

- Aureus

By Benjamin Hoogeveen

With the Free Trade Agreement between the European Union and Vietnam coming up, it’s useful to know which developments are relevant in your line of business. This week, we look at developments in the trading of dairy products; the trading of dairy products is going to be fully liberalized within 6 years from now.

In Vietnam, the demand for dairy products is growing rapidly. The Vietnamese know that dairy products are nutritious, relevant because 20% of all Vietnamese children is malnourished. Did you know for instance, that Vietnam imports nearly 80% of its milk consumption, because of the growing demand? Over the years, this has had an inflationary effect on the price of milk and nowadays it’s considered to be too expensive for the Vietnamese lower and middle class. The government therefore wants to make milk better accessible by stimulating local milk production from the current 22% to 38% within ten years. Inevitably, this requires help from foreign companies such as Dutch agricultural firms.

Big players dominate the Vietnamese dairy market, but there are chances for foreign investors to introduce high-end dairy products. Expected is that consumer behavior is changing, resulting in a higher demand for cheese and yoghurt. The total revenue of yoghurt will grow with 24% and cheese with 8,2% over the next 5 years.

Even though the dairy market in Vietnam is competitive and dominated by those big players, there still is plenty of room for firms specialized in processed dairy products like cheese and yoghurt. The liberalization of dairy export to Vietnam, the rapid growth of demand and chances for processed dairy products make it attractive for Dutch firms to easily access and operate in this market.

Curious about how you can benefit from these developments? Feel free to contact us!