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Vietnamese Dairy Producers Eyeing Path to Lucrative Chinese Market

18 April 2017

VIET NAM - Not satisfied with their own backyards, Vietnamese dairy producers are aiming at broadening their global reach, with neighboring China and its giant market topping the list of potential importers.

To Vu Ngoc Quynh, chairman of the Vietnam Dairy Association (VDA), said the more business trips he has taken to China, the more confident he becomes about the prospect of an import market.

"Chinese consumers have showed a very positive attitude towards Vietnamese dairy products," Mr Quynh told Xinhua.

Over the past two years, local firm HanoiMilk has been participating in the annual Asia-China Expo held in Nanning city located in China's Guangxi province. HanoiMilk has been taking this as a precious opportunity to introduce their products to Chinese consumers.

"At the fair, we invited visitors to taste our products. Seeing people queuing in long lines to order our yogurt made us feel so happy," HanoiMilk's Chairman, Ha Quang Tuan, recalled.

According to Mr Tuan, individual traders operating nearby the two countries' borders have imported a significant amount of Vietnamese dairy products into China since the Chinese people are amazingly fond of the goods.

The buyers' reaction encouraged HanoiMilk to build their first-ever plant in China, located in Pingxiang city in Guangxi province. The 2,000-square-meter plant uses advanced technology to package and preserve dairy products.

Tuan said the provincial authority is helping his firm to get approval from China's General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) to import dairy products from Viet Nam to the country.

Like any other producer, Viet Nam's largest milk firm Vinamilk considers China to be one of the most valuable potential markets in which it plans to invest further in manufacturing plants, farms and distribution channels.

To date, Vinamilk has boosted its overseas presence with production factories in Cambodia, New Zealand and the United States.

"China is a demanding market with the largest population in the world and its per capita income is increasing rapidly. Vinamilk's products have been welcome by local citizens due to their high quality, diversification and appropriate prices," Vinamilk's Director of External Affairs, Do Thanh Tuan, told Xinhua.

When asked about how Vietnamese products can compete in the Chinese market, local representatives expressed their optimism. They believe that the similarities in the tastes of both countries will help Vietnamese dairy products gain popularity among Chinese people.

"Like Vietnamese, Chinese consumers prefer yogurt in condensed form, which is different from products made in Europe or other Western countries," said Mr Quynh.

In addition, the geographical factor will be an important advantage to Vietnamese products against other foreign brands.

"It is even closer from our factories to Chinese provinces nearby the border compared to the distance from Chinese firm's factories," Mr Quynh said, pointing out the pros of cost and time efficiency while preserving and transporting products from Viet Nam.

Speaking of the quality of the products and the confidence in the technology behind it, Mr Tuan said, "We will compete fairly with local firms based on our high quality which meets global standards, but we'll ensure our prices are reasonable."

Across the expansive market, local brands dominate all provinces but people to some extent are becoming more trusting in products from Australia, New Zealand, Europe and South Korea, according to VDA.

"Our products have international standards like products from those countries, but are being sold at a relatively lower price. This is our competitiveness," asserted Mr Quynh.

In the foreseeable future, the official import channel may be fully open to Vietnamese firms. The two governments have been seriously discussing about an agreement to allow imports of farm products from Vietnam to China.

"We are looking forward to the day China opens its doors, then the import procedures will be so much simpler," Mr Quynh said.

Currently, a lack of such an agreement is causing delays and inconveniences for both importers and exporters, which also limits the size of trade deals.

"Paving the way for official imports is to serve the rights and demands of Chinese consumers and businesses who want to import and distribute made-in-Viet Nam products," Mr Tuan asserted, adding that a pilot plam could be launched to control the sanitization of imports in the first stages and test the feasibility of the barrier-easing policy.

TheCattleSite News Desk



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