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Foreign help for husbandry

Released at: 11:14, 20/07/2019

Foreign help for husbandry

Photo: Viet Tuan

A substantial amount of foreign capital is being poured into Vietnam's livestock sector, building plants or farms and providing new solutions.

by Ngoc Lan

The De Heus Group from the Netherlands, which provides advanced solutions in animal nutrition, is cooperating with the Hung Nhon Group under a memorandum of understanding (MoU) signed on May 26 to invest VND1.5 trillion ($64 million) in a high-tech pig breeding project called DHN Dak Lak, in the central highlands’ province of Dak Lak. Construction will be carried out from the third quarter of this year to the fourth quarter of 2025 on a total area of 200 ha. The project will use grid-connected solar power systems and breeding processes applying Industry 4.0 in accordance with Global GAP standards. The main aim of the project is to provide high-quality breeding pigs to Vietnamese farmers. 

The MoU with the Hung Nhon Group is not De Heus’s first investment in Vietnam’s livestock market. It now has eight plants around the country, through cooperative deals with companies such as the Belgian Belgabroad Group’s Bel Ga Viet Nam JSC in the central highlands’ Lam Dong province, Tom King in the Mekong Delta’s Bac Lieu province, Tam Do Farm in southern Dong Nai province, and the Bien Dong Slaughterhouse in northern Nam Dinh province. Mr. Le Thanh Anh, Marketing Manager at De Heus Vietnam, told VET that investments in Vietnam’s livestock market by foreign investors in building farms and providing new solutions is part of the professional development of the livestock sector. 

If farmers hope to do good business, he explained, they need to improve their farms and apply modern technology in farming. “Professional farms joining a feed supplier, a breeding unit, and a slaughtering unit can create a closed chain from farm to table,” he added. “At this time, feed factories are helping chains find success. We don’t compete with farmers but cooperate across the chain to create safe food.”

Different goals

Many experts said that foreign capital is being poured heavily into Vietnam’s livestock market, in building factories or farms and providing new solutions. Although there remain difficulties, foreign businesses have their own strategies to benefit from the potential of the country’s livestock market. 

NS BlueScope Lysaght Vietnam also signed a strategic MoU with the Denmark-based SKIOLD in January. The two will cooperate to develop modern turnkey solutions for Vietnam’s poultry and livestock farming market to increase efficiency and productivity, including total solution offerings, market development, customer service, and marketing activities. NS BlueScope Lysaght is a steel company with 100 years of experience in building high-quality steel-related projects but has decided to invest in Vietnam’s livestock market. Mr. Nguyen Cao Tri, President of NS BlueScope Lysaght Vietnam, told VET said that the company will focus on providing to factories their unique steel cladding profile and structural system. “Vietnam’s poultry and livestock market is still heavily reliant upon small-scale farms, with limited technology and know-how, which leads to unstable performance, low productivity, and inferior products,” he said. “Our partnership with SKIOLD comes from our mutual objectives of bringing better solutions to Vietnam’s poultry and livestock market, with high productivity and food safety and traceability at the same high standards found in Denmark and Australia amid rapid growth and fiercer competition, both in the domestic market and the export market.” 

SKIOLD specializes in supply solutions, equipment, and know-how in the process of feed production, feed automation, and internal air and ventilation control automation. Ms. Vu Thi Yen, Regional Sales Director at SKIOLD Asia, said NS BlueScope Lysaght is manufacturing buildings with solutions for breeding facilities and central control systems, while SKIOLD manufactures everything inside the facilities. 

Among other major investments, Cargill opened a new $28-million feed mill last October in southern Binh Duong province to better serve livestock farmers in the south. The 48,000 sq m feed mill produces a wide range of poultry and swine feed and has an annual capacity of 240,000 MT. A large portion of its operations are automated, allowing for increased operational efficiency and an enhanced customer experience.

The company has eight livestock feed mills and an animal husbandry training center to serve dealers and farmers in Vietnam, with investment totaling around $130 million. “Companies like Cargill understand that the Vietnamese market has very specific requirements, so we need to ensure that we offer global innovations and technologies that meet needs,” said Mr. Mariano Berdegue, Managing Director of Cargill Feed & Nutrition, Thailand and Vietnam. “With expertise and international experience and unique capabilities in animal health, farm management, disease control, and nutrition, we help farmers become more efficient and more productive in farm management and animal production. Vietnam can also benefit from international players in animal nutrition, to manage food safety and food traceability to address consumers’ changing expectations.”

Common market

Vietnam is in the process of transitioning to a model of concentrated, large-scale, modern farms and to compete in both domestic and export markets regarding food safety and product prices. In particular, the complete control of the feed production process plays a crucial role because animal feed accounts for the largest cost for farmers, and a complete farm needs to have an entire closed production line to help resolve problems.

Ms. Yen noted that the transition to modern commercial farms with a focus on food safety, traceability, and efficiency makes Vietnam an interesting market for foreign investors providing know-how.

Mr. Tri believes Vietnam’s market is evolving quite rapidly, with major contributions from large-scale farms of both domestic and foreign investors. “And these big farms have been shaping our industry with more knowledge, information, and advance technologies,” he added. “The investment in modern farms with advanced technology provides great motivation for the industry amid new competition.”

Figures also reveal positive signs in the market. The export value of livestock products in the first quarter of 2019 reached $129 million, up 1.4 per cent over the same period of 2018, according to the Department of Livestock Production at the Ministry of Agriculture and Rural Development. April’s export turnover of animal feed and raw materials increased 10.4 per cent compared to March, the second consecutive month seeing an increase, raising turnover to over $202 million and contributing 0.25 per cent to the country’s total export turnover.

However, Mr. Tri also pointed out challenges, including from feed costs, given that this accounts for some 70 per cent of total costs, and that most feed is imported. Figures from the General Department of Vietnam Customs show that in the first quarter of 2019, Vietnam spent more than $969 million on importing animal feed and raw materials, up 5.38 per cent compared to the same period of 2018.

Mr. Anh said that, in the animal husbandry sector, one of the biggest challenges for foreign investors is that small-scale farms account for the majority and are spread around the country, making disease control and prevention quite difficult. For example, the rapid spread of African swine fever recently poses challenges for Vietnam’s livestock market. Foreign businesses also need to prepare financial and human resources to cope with their farms being infected and pigs having to be destroyed. “We expect the Vietnamese Government will take steps to re-arrange and make disease-free zones for husbandry,” he said. “The government should also support small-scale farmers to gradually grow and encourage large-scale farmers to apply new technologies in livestock farming. Together, we can help the animal husbandry sector be more professional and modern.” 

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