Exports continue boosting for Vinamilk
Export performance helped Vinamilk to be one of the few enterprises that “reversed the trend” successfully in general difficult situations. In 2023, the “big man” in the dairy industry announced that net revenue from exports reached more than VND 5,000 billion, a 4.4% increase over the previous year, helping Vinamilk‘s net revenue to rise by 0.7% to VND 60,369 billion. In the fourth quarter of 2023 alone, net export revenue surged by 19.3% compared to the same period in 2022.
Looking back, it can be said that 2023 was an eventful year for Vinamilk when it opened with contracts signed at the large Gulfoods Dubai fair for the Middle East market. Following that were China, Japan, South Korea, etc. with a series of continuous trade promotion activities by the enterprise. In the third quarter of 2023, the highlight was the signing of a memorandum of cooperation with two leading enterprises in the field of importing and distributing milk and agricultural products in China.
Without giving specific figures, a Vinamilk representative said that export growth in the first quarter of this year remained positive. By the end of the first quarter of 2024, Vinamilk had also completed a large order of over 300 containers of milk powder for children and nutritional powder for export to the Middle East.
Many securities companies predict that export activities will become a bright spot for Vinamilk this year. KB Securities (KBSV) forecasts that in 2024, when the global economy recovers, consumer demand in Vinamilk‘s major export markets (Southeast Asia, the Middle East) will rebound, especially since the Middle East market increasingly prefers Vinamilk‘s milk.
Exploiting strengths for growth
Currently, the growth driver for Vinamilk‘s export revenue still comes from the group of main and key markets such as the Middle East, Japan, South Korea, China, Southeast Asia, etc.
For example, for the Middle East, export revenue from this market has nearly doubled in the past 10 years, and there is still a lot of room for development. After many years of dominating the market in the imported infant milk powder segment, Vinamilk has expanded its product portfolio here to 50 SKUs, with many products being R&D for this market in the high-end segment such as specialized milk powder, milk powder for adults, nutritional powder, etc. Recently, Vinamilk has joined with its partners to boost the healthcare channel for specialized lines and e-commerce, experimenting with new forms such as livestream sales, etc. to reach customers better.
 A solid manufacturing platform, flexible product development capabilities, and dedicated service are the “three legs of a tripod” for Vinamilk‘s export sector.
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In the Asian market, the revenue of condensed milk, fresh milk, and yogurt products also grew positively as Vinamilk products are increasingly favored by consumers. Positive signals from China, after the signing of the cooperation agreement, the first batch of Vinamilk‘s durian-flavored yogurt was on the shelves in China in the last month of 2023. Prior to that, Ong Tho condensed milk – Vinamilk‘s main product in the billion-dollar market – had just officially appeared in a large supermarket chain in Guangzhou.
Vinamilk‘s durian-flavored yogurt has been exported to the Chinese market.
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Potential remains
Although milk is not yet a major export item of Vietnam, with the rapid change in consumer trends in the world, there is still a lot of room for businesses to exploit. Vinamilk is also stepping up its market share expansion in high-income markets in Asia and some potential new markets such as Central & South America, and the Caribbean.
Also according to KBSV, developed markets also welcome Vinamilk‘s products thanks to their production capacity, consistent quality, and compliance with ESG (Environment, Society, Governance) standards. For example, with the Australian market – an area that has established “green barriers” in imports – products supplied by Vinamilk all use HDPE packaging (easy-to-recycle packaging) and have no plastic straws, easier-to-open lids to reduce plastic waste to the environment. As a result, the product is available at major supermarket chains Costco, Woolworths, Coles, Aldi, Foodstuff, etc. with sales growth of over 10%/year.
The system of farms and factories covering the whole country, including units that meet “green” standards or certifications for Carbon neutrality, etc. is being taken advantage of by Vinamilk as a competitive advantage when exporting, anticipating the production shift from large countries to Vietnam.
Many new products have been added by Vinamilk to the export portfolio to meet the needs of new markets such as Australia and New Zealand.
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In parallel with the efforts from enterprises, the FTAs signed by Vietnam will continue to be a lever to help Vietnam’s export products expand to potential markets.
With more than 25 years of experience in dairy export, to date, products manufactured by Vinamilk have been present in over 60 countries such as the US, Japan, South Korea, Singapore, New Zealand, Australia, China and all Southeast Asian countries, with a cumulative export value exceeding USD 3.2 billion.
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