Japanese conglomerate Marubeni Corporation and Vietnamese Dong Nai Food Industrial Corporation have signed a Memorandum of Understanding to jointly operate its feed milling segment, and to establish an integrated food production and supply system centred in the distribution of meat products.
With the global growth of the grain demand, Marubeni has been focusing to secure a stable supply source of grains, and at the same time has been striving to expand its sales channels across the world.
Marubeni has sold 20 million tons of grains in FY2010, and plan to market 25 million tons by FY2012.
The partnership is one of Marubeni’s steps to market grains not only to the existing import markets, but to expand total volume by participating in feed milling enterprise in emerging markets.
Dong Nai Food, a company fully owned by the Dong Nai Province, has its own meat processing facilities and nationwide distribution network, and at the same time holds a 25% stake in Proconco, Vietnam’s largest native-capital feed producer, with more than 10% share in the country’s market.
Proconco’s feed production was 1.2 million tons in 2010, which they plan to expand to 3.5 million by 2020.
Marubeni plans to begin its cooperation with Dong Nai Food with its feed segment, and eyes to expand the relationship to include participation in its feed lots, meat processing, and product distribution networks.
New production complex
Dong Nai Food has plans to construct an integrated livestock complex slated to be named Agro-Park, with utmost attention paid to safety and quality of both the feed it will use and the final products it will produce.
The complex, to be situated in the Dong Nai Province Key Economic Zone just sixty kilometers east of Ho Chi Minh City, will include a large-scale livestock farm and a meat processing plant.
Marubeni plans to utilize its subsidiaries, most notably the Marubeni Nisshin Feed, to provide technical expertise such as feed production and quality control to the successive participation into the integrated food production and supply system.
Still diverse market
Currently, Vietnam produces about 10 million tonnes of animal feed, and the top four millers control 40% of the market, whereas many small and middle-sized millers also still compete within the country.
The meat and poultry demand in Vietnam, expected to grow 50% in the next five years, is quickly expanding in tandem with the recent rapid development of its economy.
The growth of the feed industry is likewise anticipated, whereas merger and acquisition within the industry is expected, with the intensifying competition and heightened awareness to quality control.