National Review of the feed sector in

Vietnam

Xavier Bocquillet

Agriculture in Vietnam

Vietnam Production

Rice: 42 million tons (1st exporter in 2013)

Fish: 4.3 million tons

Meat: 3.1 million tons pig meat (No1 in Asean)

0.6 million tons poultry (chicken and duck)

0.3 million tons beef and buffalo

350 million litters milk

Livestock Industry

27.1 million pigs

5.4 million beef & 2.7 million buffalo

1.3 million sheep and goat

226 million chicken & 97 million ducks

Vietnam

Exports : 18.2 billion usd (20% of

VN exports)

Imports : 9 billion usd

Balance : + 9.2 billon usd

France

Exports : 47 billion usd

Imports : 39.4 billion usd

Balance: + 7.6 billion usd

Agriculture is a highly priority sector for

Vietnamese Government

70% of electors are involved in agriculture

sector

Agriculture ensure

settlement of population in

rural area

Agriculture represent

19% of GDP

19% of National budget

dedicated to agriculture

Agri export = 19 billion usd

Agri Import = 9 billion

usd

Vietnamese are meat lovers!

0

100

200

300

400

500

600

700

800

900

1000

2010 2011f 2012f 2013f 2014f 2015f

'000 t

on

s

Production and consumption of

poultry in Vietnam

0

100

200

300

400

500

600

700

800

900

2010 2011f 2012f 2013f 2014f 2015f'0

00 t

on

s

Production and consumption of

beef and veal in Vietnam

For pork meat, production cover almost the demand.

in 2015 : production 2,168,000 tons VS consumption 2,213,000 tons

Source: USDA, BMI, 201340kg meat per year per hab

The feed industry in the world

-

2 000

4 000

6 000

8 000

10 000

12 000

14 000

-

50

100

150

200

250

300

350

400

Asia Europe North

America

Latin AmericaMiddle East &

Africa

Others

Nu

mb

er

of

feed

mills

Millio

ns

Source: Alltech, Global Feed Summary, 2013

Annual animal feed production per country

-

50

100

150

200

250

Millio

ns

Source: Alltech, Global Feed Summary, 2013

Animal feed industry in Vietnam

3 940 000 5 118 000

6 125 000

7 567 000 8 852 000

10 600 000 11 500 000

12 700 000 13 500 000

18 000 000

25 000 000

-

5 000 000

10 000 000

15 000 000

20 000 000

25 000 000

30 000 000

2005 2006 2007 2008 2009 2010 2011 2012 2013 (f) 2015 (f) 2020 (f)

TO

NS

Source: MARD 2013

Vietnam Feed industry in figures

In 2013

230 feed mill companies in operation in Vietnam

60 foreign owned companies

44 companies are100% Foreign owned

These 60 controls 60% of market share (against 40% in 2011)

13.5 million tons produced in 2013 (5.7 million in North, 7.8 million in South)

Annual average growth of 17% in the last 5 years

Production Capacity utilization: approx 66%

Ratio of industrial and self-made feed and

import feed during the 2010's

SupplyVS demand of industrial feed

during 2010's in million tons

Source: Adapted

from MARD

Import of raw materials

-

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

4 500

2005 2006 2007 2008 2009 2010 2011 2012 2013

US

DM

illio

ns

Vietnam's import of feed and feed ingredient

Source: GSO

For 2013, Vietnam had imported 5.84 million tones of animal feed and

ingredients, representing 48% of the raw material needed to satisfy the demand

Focus on Corn and soya in 2013

-

1

2

3

4

5

6

7

8

Corn Soya

Millio

ns

ton

s

Import

Production

Source: MARD & USDA

2.26

4.9

1.40.263

Presentation of main actors

Market Shares in 2012

CP Vietnam, 18.80%

Proconco; 10,80%

Cargill VN; 6,70%

East Hope VN; 5,10%

ANT; 4,70%

Japfa Comfeed

VN; 4,50%Greenfeed; 4,40%

Vina; 3,30%Lai Thieu; 2,80%

Anco; 2,20%

Others; 36,70%

Case Study: CP

Established in 1993 in Vietnam

5 animal feed plants + 3 aqua feed mills

Total capacity of 3.8 million tons per year

2.3 million tons livestock feed

1.5 million tons aquafeed

19% market share

Over 1300 distributors

Integrated company

22% of white feather chicken market (4.5 million

chicken)

7% of pig market (250,000 sows)

16% of egg market ( 3.8 million hens)

CP Integration

Marketing system of feed companies

Historical reasons for

distributors

Distribution is done at

several levels.

Feed mills often work

with distributors that can

be exclusive

Level 1 and Level 2

Margin for distributors

around 10 to 15%

FEEDMILL

FARMERS

DISTRIBUTORS

LEVEL 1

DISTRIBUTORS

LEVEL 2

10 to 20%

60 to 70%

10 to 30%

Pig: A dealer industry, feed sold through distributors

But more and more feeder are take back control

Credit is more and more common.

Chicken: A captive market controlled by integrated companies.

CP, Japfa, Emivest control over 60% of the market

Contract farming system

Today more and more animals are produced under

contract farming system in Vietnam

CP, Japfa, Emivest are historical players.

CP have over 2,000 farms under contract farming

(shrimp, fish, livestock)

Technical support + inputs (DOC/piglet + feed + vet)

Get back the finish product with agreed price calculation

Trends : buying the farm to have better control

Sustainability of the animal feed industry

Foreign owned companies are taking lead of the feed

business

Investment, R&D and field presence

Financial capacity, contract farming and long term strategy

Integration of value chain: control of input & output

Finally they are in position to control price of meat !

What would be the future of the industry ?

How Vietnamese companies would be able to fill the gap?

What role should have government of Vietnam?

Thanks for your attention