VIETNAM ANIMAL FEED INDUSTRY REPORT Q1/2018viracresearch.com/wp-content/uploads/2018/05/Demo-Animal...VIETNAM ANIMAL FEED INDUSTRY REPORT Q1/2018 TABLE OF CONTENTS 2 Content Page Content

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VIETNAM ANIMAL FEED INDUSTRY REPORT Q1/2018

TABLE OF CONTENTS

2

Content Page Content Page

Abbreviations 4 4. Materials 28

Summary 5 5. Production 36

I. Business environment 7 6. Consumption 39

1. Macroeconomic situation 7 7. Import export 41

2. Legal framework 11 8. Animal feed price 43

3. Trade agreements 17 9. Production situation in some regions 45

II. World market 20 10. Production situation in typical countries 48

1. Definition and classification 20 11. Top animal feed manufacturers 52

2. Production process 22 III. Vietnam market 54

3. Production technology 25 1. History and development of the industry 54

TABLE OF CONTENTS

3

Content Page Content Page

2. Value chain of cattle breeding industry 56 V. Industry development zoning 97

3. Input materials 58 1. Cattle breeding industry zoning 97

4. Production 69 2. Animal feed industry zoning 100

5. Consumption 74 VI. Outlook and forecast 102

6. Import export 77 1. Driving forces of the industry 102

7. Inventory 81 2. Forecast for Vietnam animal feed industry 106

8. Animal feed price 83 VII. Enterprise analysis 108

9. Distribution system 86 1. Enterprise introduction 108

10. Competitive analysis in the industry 89 2. Financial analysis 115

IV. Industry risk 93 VIII. Appendix of financial statements doanh nghiệp 123

4

Abbreviations

MARD Ministry of Agriculture and Rural Development SBV State Bank of Vietnam

JSC Joint Stock Company AF Animal Feed

FAO Food and Agriculture Organization of the United Nations GDVC General Department of Vietnam Customs

FDI Foreign Direct Investment GSO General Statistics Office of Vietnam

GDP Gross Domestic Product CO., LTD Company Limited

VA Value Added TPP Trans-Pacific Partnership Agreement

BOD Board of Directors USGC U.S. Grains Council

IZ Industrial Zone

Summary

5

• Global animal feed industry grew 3.7% in 2016 and reached over 1

billion tons for the first time.

• In Vietnam, shortage of animal feed materials has long been occurring

and Vietnam has to import large quantities of feedstuffs.

• In 2017, animal feed consumption was estimated at 14,782 thousand

tons, down 44% compared to 2016.

Content is intentionally removed for demo purpose

Summary

6

• According to the Ministry of Industry and Trade, animal feed price in Vietnam is always higher by 15-20%, which makes Vietnamese livestock

products difficult to compete with others.

• Currently, there are two main methods of distribution in the animal feed industry:

• Generally, in 2016, most of the key players in the industry had revenue and net profit growth compared to that in 2015.


7

Content

Part I. Business environment

1. Macroeconomic situation

2. Legal framework

3. Impacts of trade agreements

8

• GDP in the first 9 months of 2017 was estimated at 6.81%, of which

increasing 5.15% in Q1, 6.28% in Q2, 7.46% in Q3, 7.65%in Q4 (a

record high after many years).



Source: VIRAC, GSO

Source: VIRAC, GDVC

GDP Growth, 2014 - 2017

Share of animal feed exports in the total export turnover, 2015 -

2017


9

Lending rate has been on the downward trend since 2011.



Source: VIRAC, SBV

Source: VIRAC, SBV

VND/USD exchange rate, 2013-2017

Lending rates, 2012 - 2017


10

Source: VIRAC, FIA, GSO

Source: VIRAC, FIA

USD billion

Foreign Direct Investment, 2015 – 2017

FDI attraction by field, 2017

Foreign Direct Investment




11

Content



2. Legal framework


1.2.1. Regulation group on production


2. Legal framework

12



2. Legal framework

13



2. Legal framework

1.2.2. Regulation group on consumption:

14



2. Legal framework

1.2.3. Other regulation groups:

15



2. Legal framework

15



2. Legal framework

1.2.4. Impact of legal framework on animal feed industry

16


18

Content



2. Legal framework


19

1.3.1. AEC - ASEAN Economic Community was officially established on December 31, 2015




20

1.3.2. TPP - Trans-Pacific Partnership Agreement




21

Content

Part II. World market

1. Definition and classification 7. Import export

2. Production process 8. Animal feed price

3. Production technology 9. Production situation in some regions

4. Materials 10. Production situation in typical countries

5. Production

6. Consumption


1. Definition and classification

22

Animal feed classification by processing method

Source: VIRAC


23

Content






5. Production

6. Consumption

24


2. Production process


25


2. Production process


26

Content






5. Production

6. Consumption

27

• Some advantages and disadvantages of the two above technologies

Advantages Disadvantages


3. Production technology


28

Machines for animal feed production include some basic types: grinding, mixing, conveying and conveying equipment, pelletizing machines, spraying

units, boilers, drying, cooling and packaging systems.


3. Production technology


29

Content






5. Production

6. Consumption

China has been the largest feed additive producer in the world since 2011 and

has grown rapidly in recent years, with the largest growth in feed additives for

pigs and fishery.

Source: VIRAC, IHS


4. Materials

29

Feed additives consumption by type, 2016

Feed additives consumption by region, 2016



4. Materials

30



4. Materials

Source: VIRAC, IGC

Million tons

Million tons

Source: VIRAC, IGC

Demand for maize, wheat, soybean in 2016/2017 season is

forecasted to increase compared to previous crop, of which

soybean has the strongest growth,

31

Production volume of maize, wheat, soybean 2010/2011

– 2017/2018e

Consumption of raw materials for animal feed,

2014/2015 - 2017/2018e



4. Materials

Million tons

Million tons

Source: VIRAC, IGC

Source: VIRAC, IGC

In the 2016-2017 season, maize exports tended to decrease slightly while

wheat, soybean tended to increase over the previous crop.

In the 2016-2017 season, imports of maize, wheat, and soybean

tended to increase over the previous crop

32

Imports of raw materials for animal feed, 2015/2016 –

2017/2018e

Exports of raw materials for animal feed, 2015/2016 –

2017/2018e


Source: VIRAC, Indexmundi


4. Materials

USD/ton

Source: VIRAC, Department of Price Management

33

Global price fluctuations in raw materials for animal feed, 9/2016 - 12/2017


2017/18

Openi

ng

stockpi

le

Supply Consumption Closing

stockpi

leVolume Import Grinding Domestic Export

Forecast for global maize supply and demand in 1/2018 Unit: Million tons

Source: VIRAC, USDA

Forecast for global wheat supply and demand in 1/2018 Unit: Million tons

2017/18

Openi

ng

stockp

ile

Supply Consumption Closin

g

stockp

ileVolume Import Grinding Domestic Export

Source: VIRAC, USDA


4. Materials

34


2017/18

Openin

g

stockpi

le

Supply ConsumptionClosing

stockpil

eVolume Import Grinding Domestic Export

Forecast for global soybean supply and demand in 1/2018Unit: Million tons

Source: VIRAC, USDA


4. Materials

35


37

Content






5. Production

6. Consumption

Global production volume of animal feed, 2011-2016

Source: VIRAC, ALLTECH

Million tons

2016 is a major imprint for the animal feed industry when it first reached over 1 billion tons of feed production in one year although the number of

feed mills decreased by 7% compared to 2015.


5. Production

37



Production volume of animal feed by species, 2011 - 2016

Million tons


5. Production

Animal feed production structure by species, 2016


38




5. Production

38

Production volume of animal feed by species, 2011 – 2016 (continued)


41

Content






5. Production

6. Consumption

42

Global animal feed consumption 2011-2015

Unit: USD billion



6. Consumption

The global production and consumption of animal feed is influenced by

the demand for meat.

Share of animal feed consumption by region 2015


43

Content






5. Production

6. Consumption

USD billion

Global export value of animal feed had increased in the period 2010 -2016, of which

America contributed the largest export value.

Source: VIRAC, UN COMTRADE

Thousand tons


7. Import export


42


Global export value of animal feed, 2010 - 2016e

Value structure of world's top 10 largest animal feed

exporting countries, 2016

Global exports of animal feed, 2010 - 2016e


45

Content






5. Production

6. Consumption

46

Average price of complete feed ration of some species 2014 - 2016


• The livestock feed market in the period 2011-2015 had many

changes,


8. Animal feed price

• In 2016, global animal feed prices generally decreased compared to

2015, so the cost of cattle breeding also declined.

Kind of food

Average price of a complete

feed ration (USD/ton)Compar

ed to

2016/20

152014 2015 2016


47

Content






5. Production

6. Consumption

Overview of production in the regions 2016

RegionNumber of

crushers

Production

volume

(Million tons)

Growth rate

Production share of the regions 2016

Source: VIRAC, ALLTECH Source: VIRAC, ALLTECH


8. Production situation in some regions

46



8. Production situation in some regions

47


50

Content






5. Production

6. Consumption

RankCountry

Production volume

(Million tons)Production share (%)

2015 2016 2015 2016 2015 2016

Number of crushers of the world's

largest producers in 2016World's top 10 countries with the largest production volume of animal feed 2015 - 2016

Country Number of crushers

Source: VIRAC, ALLTECHSource: VIRAC, ALLTECH


9. Production situation in typical countries

49




50




51


54

Content

Part III. Vietnam market

1. History of formation and development of the industry 6. Import export

2. Value chain of cattle breeding industry 7. Inventory

3. Input materials 8. Animal feed price

4. Production 9. Distribution system

5. Consumption

55


1. History of formation and development of the industry


Content

56






5. Consumption

57

Value chain of cattle breeding industryThe 3F model in the cattle breeding industry

is considered as a standard model for feed

mills.


2. Value chain of cattle breeding industry


58

Content






5. Consumption

59

Source: VIRAC

Thousand tons


3. Input materials – 3.1 Domestic material sources

Source: VIRAC, MARD

Production volume of some main feedstuffs, 2010-2017Composition of feedstuffs, 2015


Key feedstuff raw materials

60

Source: VIRAC, MARD

Thousand hectares



Source: VIRAC, MARD

Area structure of major agricultural land, 2017Area of major agricultural land, 2010 - 2017


61

Maize

Cassava




62

Soybean

Wheat




63

Source: VIRAC, GrandView Research


3. Input materials – 3.2 Import material sources

USD million

Sales of Vietnam feed additive industry, 2012 - 2018e


64

Source: VIRAC, GDVC



Item

9M/2016 9M/2017 % so sánh 2017/2016

Quantity (1,000 tons)Value (USD

thousand)Quantity (1,000 tons)

Value (USD

thousand)Quantity Value

Import of feed ingredients 2016 and 2017


65

Maize import price is lower than that of domestically produced maize so

animal feed manufacturers tend to find import supplies.

Source: VIRAC, GDVC



USD millionThousand tons

Source: VIRAC, GDVC

Volume and maize import value, 2010 - 2017

Vietnam's maize import markets, 2017


66



Source: VIRAC

Source: VIRAC, TCHQ

Million tons

Real maize import prices and port trading prices, 2016 - 2017

VND/kg

Maize import volume by month, 2016 - 2017

67

Source: VIRAC, GDVC



USD millionThousand tons

Source: VIRAC, GDVC

Import market structure of wheat in Vietnam, 2017

Wheat import, 2012 -2017


Wheat purchasing prices at southern and northern ports, 2016 - 2017

Source: VIRAC, Agromonitor

68

Source: VIRAC, MARD, GDVC

Thousand tons



USD million

Source: VIRAC, GDVC

Import market structure of soybean, 9M/2017e

Vietnam's soybean production volume and import value,

9M/2017e


Raw soybean import volume by month, 2016 - 2017

Source: VIRAC, TCHQ

69



VND/kg

Source: VIRAC

Soybean price offer at Northern and Southern ports, 2016 - 2017

70

• Currently, prices of feed ingredients in the country can not compete with those of other powerful countries in agriculture such as America,

Argentina, India...

• Many agricultural products and animal feed ingredients from several markets have been temporarily suspended from import by MARD.




71

Feedstuff purchasing methods among farmers, traders, agents and manufacturers.

Payment methods for ex-importing of feedstuff raw materials


3. Input materials – 3.3 Feedstuff purchasing and payment methods

72


3. Input materials – 3.3 Feedstuff purchasing and payment methods

73

Content






5. Consumption

74

Source: VIRAC, GSO

• Currently, the number of animal feed producing, processing and

trading enterprises of Vietnam is very large

Source: VIRAC, GSO


4. Production

Animal feed manufacturers by region,

2010 - 2016

Number of enterprises and workers in the industry,

2010 - 2016


75

Source: VIRAC, GSO

• Revenues of animal feed manufacturers have been increasing steadily over the

years, however, their profits have been unstable and relatively low.

Source: VIRAC, GSO


4. Production

Investment capital and fixed assets of the animal feed

industry, 2010 - 2016

Revenue and profit of the industry, 2010 - 2016

VND billion

VND billion


76

Source: VIRAC,


4. Production

Livestock feed production capacity of some large companies

by 2016Thousand tons/năm


77

• Foreign companies are constantly opening more feed mills

Source: VIRAC, GSO


4. Production

Thousand tons

Source: VIRAC, GSO

Production structure of animal feed, 2017

Production volume of animal feed, 2010 - 2017e


78


4. Production

79

Content






5. Consumption

80

Source: VIRAC, GSO

Source: VIRAC, GSO


5. Consumption

VND billion

Thousand tons

Consumption volume of animal feed, 2010 – 2017e

Consumption value of animal feed 2010 - 2017e


81

Source: VIRAC, GSO

• In the first nine months of 2017, feed consumption accounted for the

largest share


5. Consumption

Pork, chicken and duck prices in the southern provinces, 7/2016-

7/2017 VND/kg

Source: VIRAC, Channuoivietnam.com

Consumption structure of animal feed, 2017e


82

Content






5. Consumption

83

Source: VIRAC, GDVC

Source: VIRAC, GDVC

• Although the situation of pork and poultry breeding, the two largest

sectors of the livestock industry in Vietnam, are facing many difficulties,


6. Import export – 6.1 Import

USD million

Import market structure of feedstuffs and feed ingredients in

Vietnam, 2017

Import value of feedstuffs and feed ingredients, 2010 - 2017


84

Source: VIRAC


6. Import export – 6.1 Import

Structure of imported feedstuffs and feed ingredients, 2016


85

Source: VIRAC, GDVC

Export of feedstuffs and feed ingredients of Vietnam to other markets in the

first 9 months of 2017

Source: VIRAC, GDVC


6. Import export – 6.2 Export

USD million

Export value of feedstuffs and feed ingredients,

2010 - 2017

Export market structure of feedstuffs and feed ingredients in

Vietnam, 2017


86

Content






5. Consumption

87

Source: VIRAC, GSO

Feed inventory has fluctuated over the years.


7. Inventory

Thousand

tons

Animal feed inventory, 2010 - 2017e


88

Content






5. Consumption

89

According to the Ministry of Industry and Trade, compared to other countries in the region, animal feed prices in Vietnam are always higher than 15 to

20%, which makes Vietnamese livestock products difficult to compete with others. The reasons leading to high prices of feedstuffs include:

However, the managerment agency also has to take responsibility for the high feedstuff price. According to experts in the cattle breeding industry, price

controls and profitability control of Vietnam are weak.




90

MonthMixed feed for pigs

(VND/kg)

Mixed feed for chicken

(VND/kg)

Animal feed price fluctuations, 9/2016- 12/2017

Source: VIRAC, Department of Price Management




91

Content






5. Consumption

92

• There are currently two main types of feed distribution in the

livestock feed industry:Distribution system in the animal feed industry


9. Distribution system


93

• In the difficult situation of the whole industry, the distribution agent system is also facing many difficulties


9. Distribution system


Part IV. Industry risk

94

Content

95

Risk of raw materials

Part IV. Industry risk


96

Market risk

Legal risk

Part IV Industry risk


97

Risk of replacements

Competitive risk

Part IV Industry risk


98

Part V. Industry zoning

1. Cattle breeding industry zoning

2. Vietnam animal feed industry zoning

Content

99

Feed industry growth depends on two factors: the growth of the livestock market and the supply of input materials.

Animal Unit

Year

2015 2016 2020

Cattle Poultry Industry Development Plan until 2020

Source: VIRAC, Animal Husbandry Association of Vietnam




100

No Fishery

2015 2016 2020

Volume

(Thousand

tons)

Area

(Thousand

hectares)

Volume

(Thousand

tons)

Feed demand

(Thousand

tons)

Area

(Thousand

hectares)

Volume

(Thousand

tons)

Feed demand

(Thousand

tons)

Fishery farming orientation to 2020

Source: VIRAC, Animal Husbandry Association of Vietnam




101



2. Animal feed industry zoning

Content

102

According to Decision No.124/QĐ-TTg of the Prime Minister

According to Decision No.10/2008/QD-TTg of the Prime Minister


2. Animal feed industry zoning


Part VI. Outlook and forecast

1. Driving forces of the industry

2. Forecast for Vietnam animal feed industry

103

Content

104

• Demand for meat in Vietnam is on the upward trend,

Source: VIRAC



Pork consumption per capita of Vietnam, 2000 – 2015

Kg/person

Source: VIRAC

Meat consumption per capita of Vietnam, 2000 – 2016

Kg/person


Animal breeding situation in the whole country, 2010 – 2017

Source: VIRAC, GSO, MARD

105

2010 2011 2012 2013 2014 2015 2016 9/2017e

Total

(thous

and

heads)

Meat

produ

ction(

Thous

and

tons)



Source: VIRAC, MARD

Meat production structure by species, 2017


106



Country Chicken

(thousand heads)

Duck

(thousand heads)Buffalo (head) Cow (head) Pig (head)

Number of flocks of cattle and poultry of ASEAN countries, 2014

Source: VIRAC, GSO, FAOSTAT


Vietnamese livestock supply-demand, 2013 – 2018f

Source: VIRAC, gappingworld

107



Million ton

108




Content

109

Thousand tons

Source: VIRAC, USDA Post Source: VIRAC, USDA Post



Structure of industrial feed production in total feedstuff

demand in Vietnam 2015 - 2018e

Demand for animal feed in Vietnam 2015 - 2018e


110



Feedstuff market for aquaculture 2018

Nguồn: VIRAC, VASEP

Triệu USD

Vietnam seafood export turnover, 2010 – 2018f

Part VII. Enterprise analysis

1. Enterprise introduction

2. Financial analysis

111

Content

No EnterpriseSales in 2016

(VND billion)

Owner’s equity

(VND billion)

Total assets

(VND billion)

Source: VIRAC

112




113



C.P VIETNAM LIVESTOCK JSC

CARGILL VIETNAM CO., LTD


114



DE HEUS VIETNAM


115



GREENFEED VIETNAM JSC

PROCONCO VIETNAM FRANCE CATTLE FEED MANUFACTURING JSC


116



UNI-PRESIDENT VIETNAM CO., LTD

DABACO VIETNAM CORORATION - JSC


117



VIET THANG FEED JSC

RURAL TECHNOLOGY DEVELOPMENT JSC - RTD

ASIAN NUTRITION TECHNOLOGIES GROUP (VN)


118




Content



119

VND billion

Source: VIRAC

Revenue from goods sold and service provided, 2015 - 2016


120

Source: VIRAC



VND billion% Net profit and net profit margin, 2015 - 2016


121



Source: VIRAC

Days in inventory, 2015 - 2016


122



Round

Source: VIRAC

Asset turnover and fixed asset turnover, 2015-2016

Gross profit margin, 2015 - 2016


123

Source: VIRAC



Times Solvency


124

Source: VIRAC



Payment ratio, 2015 - 2016


125

Source: VIRAC



%Profit margin, 2015 - 2016


REPORT DISCLAIMER

126

Report disclaimer

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be reliable and made to ensure the accuracy of the contents of the pages of the report at the time of preparation. Such information has not been independently

verified and VIRAC makes no representation or warranty, whether express or implied, of any kind with respect to the document and its contents, information and

materials. The content found in this report is proprietary to VIRAC and is provided solely for your personal and non-commercial use. You agree that you will not

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VIETNAM ANIMAL FEED INDUSTRY REPORT Q1/2018viracresearch.com/wp-content/uploads/2018/05/Demo-Animal...VIETNAM ANIMAL FEED INDUSTRY REPORT Q1/2018 TABLE OF CONTENTS 2 Content Page Content