Vietnamese businesses in the livestock industry are losing in competition with their foreign counterparts right on their home market as the latter is holding most of the feed and breed domestic market shares -- the two most important sectors of the industry.
For illustration purpose only Photo: Reuters
Many analysts said although there are only around 20 foreign animal feed manufacturers in Vietnam, they are holding up to 70 percent of the market share, while three others including CP Vietnam Livestock Corporation, Japfa and Emivest are dominating the poultry breed sector by monthly supplying around 6 millions of breeds.
Hundreds of domestic firms have to compete to take the remaining market share, and 30 percent of them have even gone bankrupt, experts said.
Holding most of the market share, the foreign firms can freely hike their prices and cause difficulties to livestock farmers.
According to the Vietnam Animal Husbandry Department, the animal feed manufacturers have increased their prices dozen times since early this year, making the current prices 40 percent higher over the same period last year.
Early this month, price of a day-old breeder chick also amounted to VND27,000, up by 3.6 times compared with early this year, according to the Ministry of Agriculture and Rural Development.
Although their domestic market share is dominated by the foreign competitors, Vietnamese businesses still fail to find a solution to the problem.
Many companies said while the feed manufacturers have to import 70 percent of the materials needed for their production, the country is yet to have any areas of raw materials to support them.
High lending rates also hinder domestic businesses, while their foreign counterparts could enjoy low interest rates for foreign currency and are supported by their parent companies to buy materials at low cost.
Pham Duc Binh, deputy head of the Vietnam Animal Husbandry Department, urged the government to impose policy to develop the material areas to give the domestic livestock industry a sustainable material supply.
“We should establish trade barriers to keep domestic materials from flowing abroad,” he said. “With the current export tariff of zero imposed on corn and manioc, we will soon run out of these materials for the domestic industry.”
Nguyen Thi Le Hong, CEO of Dong Nai Food Industrial Corporation (Dofico) also demanded the government to have suitable management policy to curb the domestic materials’ being exported en mass.
“If we do not have a solution soon, the livestock farmers will have to depend on the foreign firms forever,” she said worriedly.