Wednesday, October 17 2018

VietNamNews

TH’s mega dairy complex in Russia: a spotlight of Vietnamese investment abroad

Update: September, 24/2018 - 23:00
A milk processing plant commenced construction in Russia this month with the participation of Vietnamese Party General Secretary Nguyễn Phú Trọng (first, left) and Russian Deputy Prime Minister Alexei Vasilievich Gordeev. - VNS PHoto
Viet Nam News

HÀ NỘI – In recent years, more and more foreign investors have flocked to Việt Nam to develop their projects in a wide range of industries. At the same time, the number of Vietnamese firms investing abroad has also increased.

Among them, TH Group which is developing a large-scale dairy farm and milk processing complex in Russia, is a good example that has proved the enhanced ability of domestic businesses in integrating into the global market. A milk processing plant of the complex was launched this month in the presence of Vietnamese Party General Secretary Nguyễn Phú Trọng and Russian Deputy Prime Minister Alexei Vasilievich Gordeev.

According to analysts, it’s understandable the plant’s groundbreaking ceremony drew the attention of the two countries’ leaders because it is an important component of TH Group’s US$2.7 billion-complex and is located in the Kaluga Special Economic Zone in the Kaluga Region. The plant is considered as one of the largest of its kind in Russian with a designed production capacity of 1,500 tonnes of milk each day.

TH Group has also selected Bilfinger Tebodin – one of the leading industrial development agencies in the Netherlands – as a design contractor for its plant which will produce pasteurised and fresh pasteurised milk products, yogurt and drink yogurt, ice cream, butter and cheese among others.

In his speech, Russian Deputy Prime Minister Alexei Vasilievich Gordeev lauded the groundbreaking, saying it was an important event for Russia in general and its agricultural processing and foodstuff sectors in particular.

“We are striving to export our dairy products in the next six years,” the Deputy PM said, expressing his hope that TH Group would help the country reach this goal.

For his part, Vietnamese General Secretary Nguyễn Phú Trọng said he hoped TH Group’s project would encourage more enterprises from Việt Nam to invest in Russia, including the Kaluga Region.

Thái Hương - founder of TH Group - delivers her speech at the breaking ground ceremony of the plant.- VNS Photo

A very bold decision

With giants in manufacturing sector shifting their factories to countries with cheap labour forces to lower production costs, why did TH Group decide to develop such a big project overseas?

This investment was born by a bold decision of the group, based on the foresight of its founder – Thái Hương who considered Russia a lucrative market for many foreign dairy giants due to its long forgotten fields and a serious shortage of raw material for milk production, forcing it to import up to seven million tonnes of raw milk annually. 

This has pushed the group to implement its dairy complex there with an aim to reviving fields, rebuilding a large herd of cows and applying advanced milk processing technology.

A part of TH’s dairy cow farm in Russia. - VNS Photo

Once operational, the complex is expected to contribute to balancing Russia’s imports and exports of raw milk while exporting dairy products to several markets, such as China and those in the Asia-Pacific.

Industry insiders also praised the TH Group’s decision to invest in dairy production, one of Russia’s prioritised sectors, thus investors can enjoy many investment incentives, from taxes to financial supports.

According to the Governor of Kaluga Anatoly Artamonov, the dairy production is listed among the prioritised areas in the region’s agriculture development. As a result, this component of TH’s project will be offered many incentives so that it will be home to 40,000 dairy cows for milk production once it comes into operation.

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