Vietnam animal feed producers losing out to foreign competitors

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With their dependence on foreign raw materials and poor management among other shortcomings, Vietnamese feed producers are losing their home market to foreign rivals.

Tuoi Tre newspaper quoted Le Ba Lich, chairman of the Vietnam Feed Association (VFA), as saying 40 out of 234 local producers shut down last year.

"40 will not be the final figure," since 70 others -- also producing less than 10,000 tons a year like the closed firms -- are also in trouble and are likely to close in the near future, he said.

In the southern provinces of Dong Nai and Binh Duong, where hundreds of feed manufacturers used to operate, mostly producing less than 10,000 tons, many are scaling down or closing, Tuoi Tre reported.

Nguyen Thi Le Hong, chairwoman of Proconco, one of the country's largest producers, said her company has been offered factories by many small businesses.

But it has yet to accept any of them since it too faces difficulties, she said.

Proconco's sales fell by 15-20 percent in the first two months of this year, she said.

VFA vice chairman Pham Duc Binh said with most raw materials still being imported, poor management, and many other problems, local feed producers are losing out to foreign businesses.

The feed industry imports 30-40 percent of grains, 70-80 percent of soybean, and 100 percent of minerals and additives.

Last year the country imported eight million tons of dried soybean, wheat and other grains, bran, and dried distillers grains worth over US$3 billion.

It also imports other substances like bread flour and additives for hundreds of millions of dollars each, the VFA said.

Meanwhile, foreign producers and joint ventures with foreign businesses are doing well.

Tuoi Tre quoted the VFA as saying most factories with an annual capacity of over 50,000 tons are owned by foreign firms or joint-ventures.

It said 15 foreign producers and joint-ventures operate 44 plants that produce over 7.1 million tons of feed, accounting for 56 percent of the market supply.

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