At the general meeting, when asked about competitors by shareholders, the Chairman of BAF Agriculture JSC (HOSE: BAF) said that the company actually has many competitors, but the “life-and-death” competitors are small-scale farmers.
Mr. Truong Sy Ba, Chairman of BAF’s Board of Directors
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“All other parties are not ‘life-or-death’ competitors, meaning that they cannot prevent us from developing. In essence, we do not want those competitors to be farmers and small businesses, but in reality, this has already happened. In the past, many farmers had to give up, as a natural selection after the African swine fever (ASF) pandemic. Moreover, the new livestock law that has come into effect requires non-standard farms to close down” – excerpted from Mr. Sy Ba’s statement.
“Even the largest enterprises in Vietnam, such as C.P (C.P Vietnam Livestock JSC)… also do not account for too much of the total herd ratio. Small businesses currently account for up to 70%. But I predict that in the future, they will decrease to 30%”.
According to Mr. Ba, the amount of decrease is equivalent to about 17-20 million animals, while the current herd in Vietnam is about 60 million animals. The per capita consumption ratio in Vietnam still has room for growth. Those two opposing expenditures will create space for BAF and industrial pig farming enterprises to grow.
“In fact, the growth of BAF and other companies in the past has come from the decline of small businesses, rather than ‘touching’ the share of FDI enterprises. In the law of competition, any company that holds a market share of over 35-40% will be able to regulate. For example, if C.P increases prices but cannot sell, it will still have to decrease. Because they also have to compete with small-scale farmers” – according to Mr. Sy Ba.
The Chairman of BAF said that the strategy before 2030, Food in the 3F chain has not yet been the core. People still have the custom of going to the market to buy meat, and they do not buy many pre-processed products. But you cannot wait for the market to catch up before building; you have to create the foundation first. Therefore, the Company has determined that from now until 2030, it will position the brand for Food, not yet emphasizing the profit factor. And after 2030, the Company will position itself as a food company.
“When the livestock sector has been taken over, Food will be the surviving sector. Previously, Feed was enough, and then Feed-Farm also developed. There will come a time when only Feed-Farm-Food can exist. BAF has positioned itself clearly like that”.
Chau An
