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Vietnam Dairy Products Joint Stock Company (Vinamilk) said that it has been licensed to export dairy products to the Eurasian Economic Union (EAEU).
Authorized by countries in the Eurasian Economic Union (EAEU), the Russian Federal Service for Veterinary and Phytosanitary Surveillance has issued an official announcement on the licensing enabling Vinamilk to export its products to the EAEU under the supervision of the Eurasian Customs Union.
Estimating the EAEU market, a representative of the Ministry of Industry and Trade said that with the population of 183 million (in 2018), it has a high demand for products which are Vietnam’s strengths including farm produce. In fact, the Vietnam-Eurasian Economic Union Free Trade Agreement (VN-EAEU FTA) taking effect at the end of 2016 has opened big trade opportunities among nations. According to statistics, the export turnover between Vietnam and the EAEU reached US$4.9 billion in 2018. In the first nine months of 2019, the number hit $3.7 billion and it was estimated to touch $5 billion for the whole year. Of the number, Russia accounted for over 90 percent.
In preparation for access to the market, Vinamilk has developed a system of 13 modern factories and 12 large-scale hi-tech dairy cow farms which meet international standards. Moreover, the company has passed all surveys and met the strict standards of EAEU countries, becoming the first Vietnamese dairy business licensed to export to five EAEU member nations. This is meaningful to not only Vinamilk but also Vietnam’s dairy industry opening the door for Vietnamese dairy products to enter the new potential market. However Russia and other EAEU nations have a long developed dairy industry, hence besides opportunities there are lots of challenges which require domestic firms to come up with the right strategy to effectively exploit the market.
Mr. Mai Hoai Anh, Executive Director – International Sales at Vinamilk, said that Vinamilk has more than 20 years of experience in exporting to 53 nations and territories. There is a competition in this field in many markets, so the company predicted lots of difficulties in the first phase. The company will well prepare for devising appropriate approach strategies with products that the company have strengths to exploit the market.
In 2019, Vinamilk obtained VND5,175 billion in revenue from direct export, a year on year growth of 14.8 percent, contributing to the company’s total revenue of VND56,318 billion. Overcoming difficulties from the Covid-19 pandemic, the company got a net revenue of VND1,081 billion from export activities in the first quarter of 2020, a year on year increase of 7.5 percent. The company’s total revenue reached VND14,153 billion in the first quarter.
These achievements are thanks to Vinamilk’s consecutive exploitation of export opportunities from potential markets. Specifically, Vinamilk signed a contract to ship $20 million worth of dairy products to the Middle East in early 2020. Afterwards, it successfully exported the first consignment of condensed milk to China and other countries amid social distancing due to the Covid-19 pandemic. Recently, its soymilk and milk tea products have officially been marketed in South Korea via e-commerce sites.
With an effective performance strategy and big export contracts in the first months of 2020, Vinamilk has been honored in the list of the top 50 listed companies by Forbes Vietnam for eight consecutive years. Vinamilk is the only Vietnamese firm present in the list of the top 50 dairy companies in term of scale and revenue in the world and getting very close to the top 30 as per its strategic target.
By Minh Lan – Translated by Phuong Ho, @SGGP