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Big foreign companies jump into Vietnam’s meat market

access_time Oct 13,2016 chat_bubble_outline 114 views

The meat market in the country, estimated to have value of $18 billion, is controlled by enterprises from France, Thailand, South Korea and Vietnam.

Big foreign companies jump into Vietnam’s meat market

A report shows that the domestic livestock industry has average annual growth rate of 4-5 percent per annum, while there are 10 million farming households. 

The current consumption is 33.5 kilos per head per annum, while the figure would be 39 kilos by 2020. This means that the potential of the market is great for investors.

However, there are only a few safe-meat suppliers in the vast market such as Masan, CP Vietnam and Vissan. French investors jumped into the market recently after realizing the potential in the market.

Three French companies have decided to cooperate with farming households in Mekong Delta in a project called Le Porc du Mékong. 

They have built up a closed 3F production line (feed, farm, food), in which each enterprise is in charge of its works. Grimaud chooses breeders, Neovia Vietnam is in charge of making animal feed, and Le Boucher processing and distribution. About 600 Vietnamese households have joined the project.

In the past, the meat supply market was dominated by CP Vietnam, a Thai invested company, and Vissan, a Vietnamese owned enterprise. However, Masan has emerged recently as the most ambitious rival. 

By obtaining 24.9 percent of Vissan stakes in June and owning two animal feed manufacturers – Anco and Proconco, Masan shows its ambition to conquer the food market.

Only in early 2015 did Masan enter the animal feed sector. However, it has become the second largest producer in the field just one year later. The business had 46 percent of the sector's total turnover of VND31 trillion in 2015.

Vissan now provides three groups of products, including fresh meat, dry & processed products (65 percent of the market share) and frozen products (75 percent of market share). It now leads the market in sausage and frozen products.

As for CP Vietnam, the company plans to set up 10,000 retail points and shops throughout the country which have CP Fresh Mart and CP Kiosk brands.

An analyst commented that if it successfully develops a farming area of its own, Masan will become a rival on the same level with CP Vietnam. 

In July 2016, Masan set up Masan NutriFarm, a subsidiary specializing in making animal feed and farming pigs on a large scale in Nghe An province.

Failing to buy more Vissan stakes, CJ Group from South Korea has decided to cooperate with Satra, Vissa’s holding company. CJ CheilJedang, a subsidiary of CB, will cooperate with Satra to develop new food products.

According to Chang Bok Sang, president and CEO of CJ Vietnam, CJ plans to spend $500 million more on the project in 2016.

Thanh Lich

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