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Feed industry faces foreign rivals

Update: September, 18/2012 - 09:15

The chairman of the Viet Nam National Animal Husbandry Association, Prof Nguyen Dang Vang, spoke to the newspaper Nong thon Ngay nay (Countryside Today) about support for animal feed producers.

Foreign animal feed companies have tried to increase their market share in Viet Nam. How do you comment on that?

The number of foreign companies investing in the animal feed production in our country has increased recently. This is an issue we have to examine thoroughly and I'm afraid that my association doesn't have reliable data on this. However in recent years, the Viet Nam feed industry has seen remarkable growth with average gains of 11.8 per cent per annum. In 2010, 10.6 million tonnes were produced, while in 2011 this rose to 11.5 million tonnes. In 2010, the industry grew by $4.6 billion, of which 64 per cent came from foreign feed companies.

Many people are worried by the dominant role of foreign companies in the animal feed industry. Are these fears reasonable ?

As I have mentioned, the number of foreign companies investing in the animal feed industry is increasing. If in 2010 the market share held by foreign companies was about 40 per cent, this year – 2012 – the figure is likely to increase to 60 per cent. Currently, there are 57 foreign animal feed companies, of which 41 companies are wholly foreign owned and 16 are joint ventures. The remaining share is divided among the 170 Vietnamese companies. This is an indication of the weakness of Vietnamese companies in the industry – their production levels are small, so they are struggling to compete with their foreign rivals.

Some people have asked why the Government has made policies that are preferential to foreign companies but disadvantage domestic companies. What's your opinion?

There are positives when foreign companies came to Viet Nam as they create competition between all companies – both Vietnamese and foreign. In order to compete, Vietnamese companies have to apply advanced technology in their production while improving their management skills. But if we fail to keep up with the rapid development of technology, profits will fall and some firms may even face bankcruptcy. To avoid such a situation, I think the Government should support Vietnamese companies with human resources, particularly managers, while encouraging farmers to apply new technology in animal husbandry.

Foreign companies are strong in capital, so the government should give financial support to Vietnamese livestock breeding companies and farmers. — VNS

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