Vinamilk promotes investment and exploits foreign markets

Promoting activities of foreign branches

Despite the complicated post-Covid-19 economic situation, to expand revenue and achieve the set target for the period 2022 - 2026. Vinamilk continues to promote investment in foreign branches such as Driftwood (USA), Lao-Jagro Development (Laos), Angkormilk (Cambodia) and Del Monte - Vinamilk joint venture (Philippines). 

Driftwood became a subsidiary of Vinamilk in December 2013. By May 2016, Vinamilk raised its ownership rate in this company to 100%. Driftwood is one of the oldest dairy manufacturers in Southern California (USA) with a product portfolio including fresh milk, yoghurt, ice cream, and juice. The Company's customers include schools, restaurants, hotels, distributors... in the Southern California area. In 2022, Driftwood recorded double-digit revenue growth, positively contributing to the Group's consolidated revenue results.

After Driftwood, in January 2014, Angkormilk - a 100% owned subsidiary of Vinamilk was granted an investment license to build a dairy factory in Phnom Penh. Two years later, Vinamilk and Angkormilk inaugurated a factory with the most modern international standards in terms of technology, environment and food safety. This is also the first dairy factory in Cambodia with a total area of nearly 3 ha, with an initial investment capital of $ 23 million. The designed capacity of 59 million litres of pasteurized fresh milk/per year, and 144 million units of yoghurt and condensed milk products/per year. Every year, the factory produces about 50 million litres of milk of all kinds for the market, creating jobs for more than 500 workers in Cambodia.

In November 2022, Angkormilk announced that it would increase the total investment capital for projects in Cambodia to $ 42 million. Accordingly, Vinamilk - Angkormilk will invest in a dairy farm according to the world's advanced technology, aiming to produce milk in the next 2 to 3 years, with the output of raw fresh milk reaching over 4,000 tons/year. This will be a typical farm for the high-tech dairy industry in Cambodia.

The company is also planning to expand the factory area at the Angkormilk factory, increasing the production capacity to 90 million litres of all kinds per year, to meet the increasing demand for milk in the Cambodian market.

For Lao-Jagro, Vinamilk officially became the parent company in July 2018 and created a new turning point with the development of the dairy farm complex project in Laos. The planned area is 5,000 ha, and the herd size is 24,000 cows. The long-term orientation is to develop a farm complex of 20,000 ha with 100,000 cows. This is the result of cooperation between businesses of three countries, Laos, Vietnam and Japan, aiming to form an international standard raw milk material area to supply the Vietnamese market and the Asian region.

Del Monte - Vinamilk joint venture is the newest member in the system of member companies of Vinamilk. In August 2021, Vinamilk and its partner Del Monte Philippines, Inc. announced Del Monte - Vinamilk Joint Venture. Total investment capital in the first phase is $ 6 million, Vinamilk and partners contribute 50% each. Currently, Del Monte products are available at more than 100,000 retail points in the Philippines.

These projects are considered new milestones in the development of Vinamilk and its subsidiaries and affiliates abroad. It also enhances the comprehensive, sustainable and long-term cooperation relationship between Vietnam and other countries. This also contributes to bringing great progress to the dairy industry and dairy farming in Southeast Asia.

In 2022, foreign branches will continue to be the growth engines for Vinamilk's international business. For Driftwood, revenue recorded a growth of over 30% thanks to the diversification of distribution channels to compensate for the main channel of schools, which has not yet recovered to pre-Covid-19 levels. In addition, Driftwood maintained the introduction of some Vinamilk products into the US market. 

By the end of the first quarter of 2023, the net revenue of foreign branches reached VND 1,203 billion, continuing to grow by 11.3% over the same period thanks to Driftwood's stable performance in the US. AngkorMilk in Cambodia has revenue growth of 7% and 11% respectively compared to last year. 

Maintain and actively seek export opportunities

Besides investing in foreign branches, Vinamilk is also active in export activities. The business has explored the dairy export segment since 1997 with the main market being countries in the Middle East. Currently, this sector is contributing nearly 85% of Vinamilk's total revenue from export business. 

“We have been cooperating with Vinamilk for more than 6 years and imported products from Vinamilk for distribution at the Foodstuff supermarket chain, in New Zealand. We always believe in the quality of service, facilities and product quality produced by the company. All of them meet not only the regulations of the importing country but also the high requirements on time and delivery quantity of the retail chain system.” Mr David Swain - Remarkable Foods Limited- New Zealand.

In addition to the Middle East, Vinamilk also promotes business activities in major markets such as Japan, Canada, Korea, Australia, and China...and is present in most Southeast Asian countries... Up to now, Vinamilk's products have set foot in 58 countries and territories, with total accumulated export turnover so far has exceeded $ 3 billion.

Up to this point, Vinamilk has completed most of the orders under contracts worth more than VND 100 million signed at the beginning of the year. Vinamilk expects more growth in the last 6 months of 2023.

“Although challenges due to big fluctuations in 2022 remain, Vinamilk has achieved positive results in early 2023. This includes dozens of contracts with a value of up to USD 100 million that have been performed. This is especially significant in the context of general export difficulties. Not to mention, dairy products are not Vietnam's strong agro-products”, said Mr Vo Trung Hieu, International Sales Director at Vinamilk.

It can be said that these export contracts not only have economic value but also show the flexibility and the right strategy of the business. This includes strategy in identifying potential markets, and investment is focused, especially in the dairy industry - the industry has fewer advantages compared to other agro-products of Vietnam.

Vinamilk's representative added that Vinamilk also actively participates in trade promotion events in traditional and potential regions and markets. This includes Gulfood Dubai Fair, Foodex Japan, FHA Singapore Fair, Thaifex… In addition to seeking opportunities to expand and explore export markets, these are also activities to contribute to enhancing the country's brand in the dairy industry.

As a result, the business recorded revenue from overseas markets in the first quarter of 2023, growing by 9.4% over the same period in 2022, reaching VND 2,428 billion. Net export revenue grew by 7.5% over the same period, reaching VND 1,225 billion in the first quarter of 2023.