Vietnam: Animal feed industry raise more and more interest for foreign investors

Foreign investors are looking to make the most of Vietnam’s lucrative animal feed industry in 2011.

US-backed Cargill Group is one of many foreign investors doing big animal-feed business in the country. Its branch general director in Vietnam, Nguyen Minh Tri, told VIR that Cargill would build two more large animal feed mills during 2011. One would be in Ha Nam province and another in the country’s southern region, which would raise the company’s total animal feed mills in Vietnam to eight.

“Vietnam is an ideal market. Now is a very good point of time for Cargill to intensify its niche here. Many other foreign investors are also coveting this market,” said Tri, who refused to reveal the total investment capital poured into Vietnam by Cargill.

Thai-backed Charoen Pokphand Group (CP) also told VIR that it would continue investing in many animal feed mills in Vietnam throughout 2011. One will be in southern Binh Duong province and two others in Hue city and southern Ben Tre province. CP will likely invest $150-200 million during 2011-2015 for its new projects. The plan is part of CP’s strategy to intensify its business activities in Vietnam over the next five years. The company has already invested $400 million into Vietnam with 17 factories processing agricultural products, particularly animal feed.

Anova Corporation, located in Binh Duong province’s Vietnam-Singapore Industrial Park inked an agreement with Norway’s EWOS, which is a major supplier of aquafeed for the international aquaculture industry, to established a joint venture to build a $6 million fish feed facility in southern Long An province earlier this month. The firm’s 51 per cent stake is held by the foreign investor.

The facility had an annual capacity of 60,000 tonnes, which may be raised to 250,000 tonnes per year in the next few years. The first products, mainly used for tra fish, which is one of Vietnam’s billions-of-dollar exports, is set to be marketed next month.

The Netherlands’ animal feed maker De Heus also began construction of its third animal feed mill in Dong Nai province’s Thong Nhat district earlier this month. This $15 million project, which covers 52,000 square metres of land, is set to use modern technology to produce 600,000 tonnes of products per year.

The project’s produce will be sold throughout the country’s southeastern region and they will look to soak up to 10 per cent of the domestic animal feed market over the next five years.

Taiwanese-backed Uni-President Enterprises Corporation said it was now completing the first stage of its third plant to annually produce 90,000 tonnes of wheat flour, over 3 million packages of instant noodles and 258,000 tonnes of animal feed. This $140 million, 15-hectare plant in Quang Nam province’s Dien Nam – Dien Ngoc Industrial Park is set to become operational in March 2011.

The Ministry of Agriculture and Rural Development’s Livestock Production Department attributed the influx of foreign investors into the animal feed processing industry to the husbandry sector’s bright future.

It reported that the sector grew by 10 per cent in 2010 and is expected to grow by 15 per cent this year. “We encourage investments in animal feed processing in areas with big raw materials production potential like the central highlands, the southern coastal and the northern midland regions,” said Hoang Kim Giao, head of the department.

At present, 70 per cent of animal feed in Vietnam is produced by foreign companies.

Source: Vietnam Business News

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CP plans expansion in China and Vietnam

The agribusiness giant Charoen Pokphand Group (CP) is committed to expanding foreign investment in China and Vietnam, focusing on agriculture, real estate and retail.

Thanakorn Seriburi, chairman and CEO of the automotive industrial products business group (China) of CP Group, said next year it plans to team up with Luoyang city in Hainan province to develop a super complex on 115 rai (18.5ha) of land. It will comprise two each of 60-storey and 40-storey buildings that will feature condominium units, a shopping centre, an entertainment complex, a hotel, an exhibition centre and government offices, including customs, a clearing house and other public services.

Construction of the complex will cost about 15 billon baht (500 millions usd) and kick off next year, with an expected completion date of six years. The group expects the project will break even three years after commercial operation.

Mr Thanakorn added the group also plans to list Shanghai Kinghill Co on the Shanghai stock market in early 2011 to mobilise funds to expand its retail and property-development business in China.

Shanghai Kinghill operates Super Brand Mall, one of Asia’s largest entertainment complexes. Located in Pudong, Shanghai’s economic zone, the mall covers 400,000 square metres.

CP was the first foreign investor in China. Over nearly four decades it has poured billions of dollars into shopping malls, the poultry industry, animal feed and motorcycle plants.

The group’s retail operations consist mainly of the nationwide Lotus Supercenter chain and the Super Brand Mall in Shanghai.

Sarasin Viraphol, the group’s executive vice-president, said next year it plans to invest 20 billion baht (660,000 usd)  in chemical-free vegetable production and distribution businesses on 8,000 rai (1280 ha) at Cixi city in China’s Zhejiang province, using sophisticated technology from plantation processes to harvesting to supply consumers mainly in Shanghai.

The project is to be further developed as an eco-tour and theme park.

Mr Thanakorn said CP’s businesses in China are expected to generate income of US$6 billion this year, a gain of 10-15% from last year. Next year’s growth rate is forecast to be the same as this year.

In a related development, Sooksunt Jiumjaiswanglerg, executive vice-president of the agro-industry and food business group in Vietnam, said CP planned to set up four more animal and shrimp feed plants in Vietnam, as well as processing plants over the next five years. This increase from five plants will raise production capacity to 4 million tonnes a year from 2.5 million.

It will spend $150-200 million to construct shrimp feed plants, cold storage and chicken-processing plants in Vietnam. The investment is part of the group’s plan to increase Vietnam operations by 100% to $3 billion a year over five years.

CP Group expects its revenue to grow by 20% this year from about 600 billion baht (20 billion usd) in 2009, with half from exports.

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