Thailand
Vietnam: Dairy exporters capitalize on tax exemption in Thailand
The Hanoitimes – The Ministry of Industry and Trade (MoIT) has urged domestic dairy producers to accelerate exports to Thailand when the Vietnamese product shipped to the market enjoys a zero percent tax rate.
According to the ASEAN Trade in Goods Agreement (ATIGA), import tax imposed on dairy products of ASEAN countries, including Vietnam, to Thailand will be exempted from 2018.
Meanwhile, Thai dairy market has high potentials, valuing at some US$3.4 billion in 2016. Annual consumption of dairy products in the country averages at roughly 35 liters per capita. Thailand currently imports dairy products mainly from New Zealand, Australia, Indonesia, the United States and the Netherlands.
Currently, Vietnam has about 60 enterprises producing and trading dairy products with more than 300 brands. The first Vietnamese company to officially export milk to the Thai market is Vinamilk in 2012. To date, Vietnam’s dairy products have been present in nearly 50 countries around the world.
Nutifood, Vietnam’s leading private dairy company, early this year signed a contract with an American distributor in January to sell its Pedia Plus infant formula line in the market, taking a step forward in tapping one of the world’s most challenging markets for nutritional supplements. Nutifood targets to earn $20 million from the American market in the first year, growing to $100 million in the next five years.
Vietnam’s dairy exports last year earned $300 million with yogurt and sour drinks being the key export staples to markets such as the Middle East, Myanmar and Cambodia.
China current represents Vietnam’s most immediate dairy export opportunity as the market’s demand for dairy products is expected to surge by 37 percent to more than $40 billion in the next five years, surpassing the US as the largest dairy consumption market, according to Euromonitor.
According to the MoIT, Vietnam’s dairy industry is witnessing strong and rapid growth with an average growth rate of more than 15 percent per year from 2010-2015, creating a fresh and favorable development space for enterprises.
Businesses are constantly investing in the renovation of equipment to improve productivity and enhance quality to meet domestic demand. Many large enterprises like Vinamilk, TH True Milk and Nutrifood have set up large-scale milk processing plants.
Besides, they also have invested in dairy farms to provide more raw materials for production, he added.
Over the last five years, the scale of dairy farms has steadily increased, with the total number of milk cows rising from over 140,000 in 2011 to nearly 300,000 in 2016.
The dairy industry posted revenue exceeding VND100 trillion ($4.4 billion) last year, an increase of 10 percent over 2016, with Vietnam Dairy Products (Vinamilk) accounting for 50 percent of the total number.
The two main products behind the strong growth of the industry are powdered milk and liquid milk, accounting for nearly 75 percent of the value share. The country consumed over 1.33 million liters of milk in 2017, up 6.6 percent compared to 2016. Consumption of powdered milk totaled 127,400 tons, up 10.4 percent over 2016.
The Department of Livestock Production under the Ministry of Agriculture and Rural Development targeted to increase the country’s milk output by 14.1 percent this year.
The domestic dairy market in 2020 is also expected to double its size, reaching $8.2 billion as Vietnam’s population is projected to increase by 5 million people and personal income and dairy consumption are foreseen to increase at 15 percent and 7 percent compounded annual growth rate, respectively, according to the European Union – Vietnam Business Network’s 2016 report.
Currently, Vietnam has about 60 enterprises producing and trading dairy products with more than 300 brands. The first Vietnamese company to officially export milk to the Thai market is Vinamilk in 2012. To date, Vietnam’s dairy products have been present in nearly 50 countries around the world.
Nutifood, Vietnam’s leading private dairy company, early this year signed a contract with an American distributor in January to sell its Pedia Plus infant formula line in the market, taking a step forward in tapping one of the world’s most challenging markets for nutritional supplements. Nutifood targets to earn $20 million from the American market in the first year, growing to $100 million in the next five years.
Vietnam’s dairy exports last year earned $300 million with yogurt and sour drinks being the key export staples to markets such as the Middle East, Myanmar and Cambodia.
China current represents Vietnam’s most immediate dairy export opportunity as the market’s demand for dairy products is expected to surge by 37 percent to more than $40 billion in the next five years, surpassing the US as the largest dairy consumption market, according to Euromonitor.
According to the MoIT, Vietnam’s dairy industry is witnessing strong and rapid growth with an average growth rate of more than 15 percent per year from 2010-2015, creating a fresh and favorable development space for enterprises.
Businesses are constantly investing in the renovation of equipment to improve productivity and enhance quality to meet domestic demand. Many large enterprises like Vinamilk, TH True Milk and Nutrifood have set up large-scale milk processing plants.
Besides, they also have invested in dairy farms to provide more raw materials for production, he added.
Over the last five years, the scale of dairy farms has steadily increased, with the total number of milk cows rising from over 140,000 in 2011 to nearly 300,000 in 2016.
The dairy industry posted revenue exceeding VND100 trillion ($4.4 billion) last year, an increase of 10 percent over 2016, with Vietnam Dairy Products (Vinamilk) accounting for 50 percent of the total number.
The two main products behind the strong growth of the industry are powdered milk and liquid milk, accounting for nearly 75 percent of the value share. The country consumed over 1.33 million liters of milk in 2017, up 6.6 percent compared to 2016. Consumption of powdered milk totaled 127,400 tons, up 10.4 percent over 2016.
The Department of Livestock Production under the Ministry of Agriculture and Rural Development targeted to increase the country’s milk output by 14.1 percent this year.
The domestic dairy market in 2020 is also expected to double its size, reaching $8.2 billion as Vietnam’s population is projected to increase by 5 million people and personal income and dairy consumption are foreseen to increase at 15 percent and 7 percent compounded annual growth rate, respectively, according to the European Union – Vietnam Business Network’s 2016 report.
Source: http://www.hanoitimes.vn/economy/2018/04/81E0C550/dairy-exporters-capitalize-on-tax-exemption-in-thailand/