Japfa Comfeed Vietnam undergoes major restructuring for future sustainable growth

Before joining Japfa Comfeed Vietnam in January, you had over 30 years of experience in the livestock industry. How will you use this experience to help the company achieve sustainable development amid the market's ongoing transformation?

Clemens Tan, general director of Japfa Comfeed Vietnam

Before joining Japfa Group, I had over 30 years of experience in the livestock industry, working for an American company in the Malaysian, Indonesian and Chinese markets. In November 2020, I officially joined Japfa Group as commercial director, overseeing four markets: India, Bangladesh, Myanmar, and Vietnam. Since January of this year, I have been general director of Japfa Comfeed Vietnam.

Vietnam is a key market for Japfa Group, demonstrated by the company's continuous and robust investment in recent years to complete the feed-farm-food supply chain. This strategy not only helps the company achieve its goal of strong growth in Vietnam and exporting products from Vietnam to international markets, but also contributes to promoting the integration and development of Vietnam's livestock industry in a safe, efficient, and sustainable direction.

With extensive management experience in developed livestock markets such as Indonesia and China, and a deep understanding of the Vietnamese market, I and the leadership team at Japfa Comfeed Vietnam are undertaking a major restructuring of the company. This effort aims to adapt and grow strongly in the new context of the domestic livestock market.

Based on your extensive experience, what do you see as the key challenges and opportunities in Vietnam's livestock market?

The livestock industry in Vietnam holds immense potential and offers outstanding growth opportunities. In recent years, the sector has seen impressive development, marked by modern infrastructure and improvements in both quantity and quality. Livestock now accounts for 27 per cent of the agriculture sector. Notably, animal feed production has grown by 13-15 per cent annually, reflecting the sector's robust expansion. Vietnam's livestock infrastructure is also evolving towards modernisation.

The livestock industry in Vietnam holds immense potential and offers outstanding growth opportunities

Moreover, Vietnam is forecast to maintain a high economic growth rate within the region this year and in the coming years. Government policies encouraging businesses to invest in modern technology and sustainable practices further support the livestock industry's growth. This creates promising opportunities for foreign investors, such as Japfa.

However, the industry faces several challenges. Disease outbreaks and fluctuating feed prices are big hurdles. Vietnam's dependence on imported raw materials for animal feed makes it vulnerable to global political and economic fluctuations, which heavily impact feed prices – accounting for up to 70 per cent of production costs in livestock farming.

A second major challenge is dealing with disease outbreaks. Recently, we have suffered losses due to diseases affecting pigs and poultry, necessitating substantial investments in biosecurity. We have invested significantly in building facilities, establishing protocols, using disinfectants, and conducting tests to prevent disease intrusions.

Thirdly, consumers today are increasingly concerned about safe, high-quality products but also demand lower prices. This presents another challenge for us.

In every opportunity lies a challenge. At Japfa, we are implementing effective transformation strategies to overcome obstacles and explore opportunities to earn the right to grow in Vietnam.

Could you share more details about the restructuring strategy Japfa is implementing?

Since the beginning of this year, we have developed and initiated a comprehensive restructuring plan with the spirit of transformation. This plan will shape the direction of Japfa Comfeed Vietnam for years to come.

The core of the plan is to improve performance, optimise costs, and establish a dynamic business model. Our focus on integrating AI technology and a data-driven approach is enabling us to make informed strategic choices, enhancing efficiency, safeguarding animal health, and minimising expenses. These strategic initiatives are paving the way for sustained and prosperous growth.

In the short term, the company will establish a new structure and evaluate operational processes to provide effective solutions and maximise support for Japfa Comfeed Vietnam's activities. In the following years, projects promoting digital transformation to simplify processes and develop a cohesive working environment will be implemented. We will continuously innovate and improve operations, fostering a culture of continuous learning throughout employees' development.

In the long term, we aim for sustainable production and business. The application of advanced production technologies, the creation of a cohesive work environment, and a focus on shared prosperity for the communities where we operate will be our guiding principles.

Japfa Comfeed Vietnam is undergoing major restructuring for future sustainable growth

Alongside infrastructure modernisation, Vietnam's livestock industry is introducing stringent regulations to promote green and sustainable development. How is Japfa addressing this issue?

Green production is not just a global trend, it is the right thing to do. With our commitment to sustainable development in Vietnam, we began tightening the construction and operation of our farms over the past three years.

Although this has incurred remarkable costs, the modernisation and establishment of biosecure systems have brought numerous benefits for sustainable livestock farming, aligning with current business and production trends. This effort underscores our core value of providing consumers with high-quality and safe products.

One of the key goals for the Vietnamese livestock industry is to enhance exports of livestock products to foreign markets. Does your company have any plans to export its livestock products to other countries where Japfa group operates?

Last year, we launched the Binh Phuoc slaughterhouse, marking a milestone in completing the feed-farm-food supply chain, and enabling Japfa Comfeed Vietnam to export livestock products to foreign markets in the future.

Regarding the export markets for Japfa's livestock products from Vietnam, we are exploring potential export opportunities in the Middle East, Asia, and other markets. In Southeast Asia, we have the opportunity to export to Singapore, a market where our parent company in Indonesia is also striving to export Japfa products.

I believe that exporting Japfa Vietnam's livestock products to foreign markets holds great potential. This potential is clearly reflected in the Vietnamese government's commitment to developing a sustainable and disease-free livestock industry, as well as its substantial support for export activities. Currently, we are in the process of completing the necessary procedures and are ready to implement our livestock product export plans in the near future.

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