Trailblazing dairy production

TH true MILK is taking Vietnam’s dairy and fresh milk industry to a new high-tech path

Minister of Science and Technology Nguyen Quan said TH true MILK was leading the local milk production industry along a new high-tech path, although the company was only established three years ago.

“TH true MILK’s dairy and fresh milk processing project is laying a firm foundation for Vietnam to build a fresh milk and dairy production industry. This project has been certified by the Ministry of Agriculture and Rural Development (MARD) as Vietnam’s first high-tech fresh milk and dairy integrated production plant,” Quan said at last week’s international conference on the application of new technologies and the sustainable development of fresh milk production in Vietnam.

Before the project began in 2009, the government’s efforts to develop a dairy industry had been a largely fruitless task. “But this project has revitalised the government’s efforts and is clear evidence that Vietnam can successfully develop fresh milk and dairy production,” said the MARD’s Institute of Policy and Strategy for Agriculture and Rural Development chairman Dang Kim Son.

“It is a very successful project that has created a revolution in fresh milk production in Vietnam. Its valuable production experiences should be shared with other firms,” said MARD Deputy Minister Nguyen Thi Xuan Thu.

In July 2013, TH true MILK put its $100 million 200,000-tonne-per-year hi-tech milk producing facility into commercial operation in the northern central province of Nghe An’s Nghia Dan district. The facility will continue expanding until 2017 when it will achieve an annual capacity of 500 million litres of milk, using leading global technology.

The fully automated facility uses technology from global leaders such as Siemens, Danfoss and Grundfos. Husbandry management technology and know-how are provided by Afimilk, Israel’s leading milk technology producing group.

The facility is part of TH true MILK’s $1.2 billion hi-tech dairy and fresh milk processing project, making it the most advanced of its kind in Southeast Asia.

At present, the company has invested $350 million into the first stage of its milk production system and the figure will increase to $1.2 billion by 2020.

“We are proud to be Vietnam’s top producer and provider of fresh milk within just three years of operation, and also the country’s trailblazer in creating a fresh milk industry,” said Thai Huong, general director of the BAC A BANK – the investment consultant for TH true MILK – and TH true MILK’s chairwoman.

The company’s revenue is expected to be nearly $190.47 million this year, $714.3 million by 2015 and $1.1 billion by 2017. TH true MILK products currently hold over 30 per cent of Vietnam’s sterilised fresh milk market, and are sold at over 125,690 stores with 168 major distributors.

The company’s products have helped Vietnam reduce its powered milk imports from 90 per cent to less than 70 per cent over recent years.

TH true MILK’s dairy herd currently totals about 45,000 cows sourced from New Zealand, Canada and Australia, with over 15,500 cows providing milk. By 2017, the herd will grow to 137,000 dairy cattle, providing 50 per cent of Vietnam’s total fresh milk.

More incentives needed

However, Huong said in order for the local fresh milk industry to sustainably develop, the government should provide enterprises with special treatment.

“We need priorities in credit and land, and training support as well. Inefficiently used land from state-owned farms should be given to us, so we can make roll out our new technology and employ more people,” she stressed.

“Despite us largely employing advanced technology, we don’t benefit much from the government’s incentives like taxes and land for hi-tech agricultural development. Hi-tech projects like ours eagerly want such incentives,” she added.

She said the government also needed to enact detailed regulations related to the application of new technology in agriculture which would help Vietnam lure more investors into the sector.

Echoing this view, Afimilk chairman Yuval Rachmilevitz said that many Israeli firms wanted to invest into Vietnam’s milk industry. “However, they want more special treatment from the government,” he said.

“The government should give financial support to dairy farmers to develop large-scale farms, make a long-term plans to stabilise prices and ensure food hygiene and safety regulations. This will help lure foreign investors,” Rachmilevitz said. “Investors need to have trust that they will be able to profit from these policies.”

Vietnam Husbandry Association chairman Nguyen Dang Vang added that in order to effectively apply high technology in the fresh milk and dairy industry, prime ministerial Decision 1895/QD-TTg dated December 17, 2012 on approving the high-tech agricultural development needed to be implemented more quickly.

“The implementation of this decision is too slow, affecting the performance of firms like TH true MILK and the country’s efforts to attract investors into dairy production,” Vang said.