Production of animal feed in the context of global integration
Vietnam's animal feed industry has made strong progress in terms of scale, quantity, quality and technological level. However, in the context that Vietnam is increasingly integrating with the world, the feed industry needs changes in depth to make production and business more efficient.
Vietnam's animal feed industry develops and integrates
Entering the market late, Vietnam's feed industry has developed with a relatively fast growth rate. According to the Department of Livestock Production, in 2011, there were 233 feed production establishments nationwide, with a total designed capacity of 16.1 million tons, by 2019 there were 264 establishments, with a total designed capacity of 40.5 million tons. In the period 2011-2019, the number of new feed production establishments only increased by 13.1% (equivalent to 1.48%/year) but the designed capacity increased by 151.6% (equivalent to 16.8%) /year), in which the number of factories belonging to foreign enterprises accounts for 32%.
The output of feed production in the country is constantly increasing. In 2011 the production of animal feed reached 11.5 million tons, by 2019 it has increased to 19.0 million tons. With this growth, Vietnam has become the 10th largest country in the world and the 1st in the ASEAN region in terms of industrial feed production. Currently, Vietnam's feed industry not only meets the needs of domestic livestock development but also exports to other countries in the region and the world.
Processing technology of Vietnam's feed industry is increasingly developing. Most of the invested feed production lines belong to the new generation and originate from developed countries such as Europe and the United States. Currently, about 80% of feed production facilities have automatic and semi-automatic production lines; Food quality and safety are increasingly being improved.
However, Vietnam's feed market segment is leaning towards foreign enterprises. Although domestic enterprises own more production factories than foreign enterprises, including some large-scale enterprises such as Dabaco, Masan, GreenFeed, Vina, Lai Thieu... but domestic enterprises only account for about 35% of the feed supply market share, the remaining 65% of the market share is still held by foreign enterprises. According to forecasts, Vietnam's feed industry, which is being assessed as having great potential, will continue to attract foreign enterprises to expand in scale, output as well as the number of enterprises. The feed supply share of domestic enterprises will be at risk of decreasing.
Not only do they excel in market share, most foreign enterprises have methodical business strategies with closed production and business chains and strong financial resources. In the context of the complicated developments of the Covid -19 pandemic affecting the production of many countries around the world, many domestic enterprises are struggling to get out of the raw material crisis and maintain production. Foreign countries continue to build more factories to increase output. Specifically, recently, Japfa Comfeed Vietnam Co., Ltd (Japfa Vietnam) officially inaugurated the 6th factory producing modern and high-tech animal feed at Nhon Hoa Industrial Park, An Nhon district, Binh Dinh province, with an investment capital of nearly 300 billion VND (equivalent to 13 million USD). This is a factory invested and equipped with advanced production lines and modern technology with the goal of providing high quality animal feed products to exploit the potential market in the Central region. Since investing in Vietnam in 1996, Japfa Vietnam has continuously expanded its investment and has now become one of the leading feed and livestock and poultry producers in Vietnam. Or CP Group from Thailand, when entering the Vietnamese market, CP only focused on producing feed until now CP has become a pioneer in the "3F" model, from animal feed (Feed). to farms (Farm) and food (Food) with the expansion and development of more areas such as: laying hens, supplying pigs, broilers, sausages, piglets, exporting shrimp and pangasius. Currently, C.P Livestock Joint Stock Company. Vietnam has 9 feed mills nationwide.
Vietnam is participating in the signing of a series of trade agreements that have brought many opportunities and challenges to domestic manufacturing industries when integrating and developing with the world economy, including the feed industry. . Assessing the impact of the trade agreements that Vietnam has signed on the feed industry, for example, the Vietnam - European Union Trade Agreement (EVFTA) effective from August 1, 2020 shows that , the livestock industry will face increased competitive pressure from products imported from the EU. Frozen pork products will be tax exempt after 7 years, processed foods after 7 years and the tax rate for chicken will gradually decrease to 0% in 10 years, while the previous tax rate was from 10%-40 %. However, over the past time, although imported meat is quite cheap, most people still have the habit of consuming hot meat or domestically produced meat. This makes competitive pressure from the EVFTA agreement bringnot too big. According to a survey by Vietnam Report, feed businesses rated the impact of the Trade Agreement on the industry at a moderate level, reaching 3.3 on a 5-point scale.
Besides, Vietnam's feed industry is still facing difficulties such as: The source of imported feed materials is large and increasing; feed production and management technology is still lacking in synchronization, automation is not high; input costs of domestic feed production are high; low investment efficiency; distribution of industrial feed production facilities is not uniform. However, in any case, Vietnam's feed industry still has a lot of potential for development. According to the United States Department of Agriculture (USDA) forecast, Vietnam's animal feed market is expected to grow at a compound annual rate of 5.06% during the forecast period to reach a market size of 12,270 billion USD by 2025. According to the survey results of Vietnam Report on the prospects of the feed industry in 2021, 57.1% of enterprises assessed that they would maintain the growth rate; 28.6% rate growth is positive, slightly better and only 14.3% growth will be slightly lower. The survey of Vietnam Report also pointed out three prominent development trends of the feed industry in the coming time, which are: Product diversification; Increased use of biotechnology; Promote the application of modern technology and automation in production and management.
In order to avoid relying too much on raw materials and to lower the cost of feed production, the Ministry of Agriculture and Rural Development has launched a Project to develop the feed processing industry in the next 10 years (2021-2030). Accordingly, the specific target by 2030, the output of industrial animal feed will reach about 30-32 million tons/year. Industrial feed processing establishments apply quality management systems ISO, HACCP, GMP or equivalent. The level of technology in production, management and quality and cost of Vietnamese feed products is among the most advanced in the ASEAN region. Autonomous about 40% of the total raw materials from domestic production, of which the supplement group is self-sufficient about 50%.
Avoiding the "overwhelming" of foreign investors, a number of corporations, large domestic enterprises such as: Hoa, Phat, Hung Vuong, Vingroup, etc., have poured capital into the feed segment to compete and regain a balanced market share with other businesses. foreign business. For example, Hoa Phat Group is operating two feed mills with a total capacity of 600,000 tons/year. Hoa Phat Group has also built and put into operation a feed processing factory in Long Khanh Industrial Park with a capacity of 200,000 tons/year.
Solutions to develop the animal feed industry in the near future With a modern animal feed production industry, independent of the import of raw materials, Vietnam's livestock industry can proactively respond to unusual risks and develop sustainably. To develop in the coming time, the feed industry needs to focus on solutions, which are:
Review and adjust the network of industrial animal feed production establishments in accordance with the needs of the domestic consumption market and export capacity. Limit new openings and expansion of industrial feed mills in areas where there are already many feed mills.
Strengthening quality control, especially safety criteria for animal feed; promote research activities to improve nutritional value, economical and efficient use of raw materials for animal feed.
To encourage enterprises to invest in applying high technology, advanced technology, new technology and biotechnology in order to quickly produce biological products to replace antibiotics and chemicals used as feed ingredients. raising and replacing imported raw materials.
To encourage investment in improving the system of seaport infrastructure and specialized warehouses for export and import of raw materials and animal feed. To encourage the development of models for processing organic animal feeds using small and mobile technologies and equipment suitable for farming households and cooperatives; model of intensive cultivation of grass, thick maize, waxy rice... combined with mixed forage processing technology (TMR).