Vinamilk's dairy farm complex in Laos is expected to come into operation in the first quarter of 2022.

After many years of research, study, and realizing the potential for agricultural development and the advantages in developing dairy farming in the Xieng Khouang Plateau (Laos), by the end of 2018, Vinamilk invested in a large-scale dairy farming development project here. This project is part of Vinamilk's strategy to expand its fresh milk raw material area.

The first farm in Vinamilk's Lao-Jagro Dairy Complex in Xieng Khouang has completed basic construction items (photo taken in May 2021).

In May 2019, Vinamilk started construction of the Lao-Jagro Organic Dairy Farm Complex. This project took advantage of the advantages of three partners from Japan, Vietnam and Laos in the joint venture.

The highland climate is very favorable for dairy farming, and the large clean land fund in Xieng Khouang is a favorable condition for developing an organic dairy farm. This project applies Japanese technology, combined with Vinamilk's financial potential and experience in successful dairy farming in Vietnam.

Xieng Khouang Plateau has great advantages in land fund and climate suitable for dairy farming.

Phase 1 has a total planned area of ​​over 5,000 hectares with a total herd of 24,000 cows. Focusing on developing this super project, Vinamilk plans to increase the total investment for this phase to 150 million USD. Currently, Vinamilk is in the process of building the first dairy farm cluster with a herd of 8,000 cows (equivalent to the scale of Vinamilk's large dairy farm in Tay Ninh), including 4,000 organic dairy cows. With this herd size, the farm can provide more than 120 tons of milk/day, equivalent to nearly 44,000 tons/year.

The farm has also completed Organic certification for an area of ​​over 600 hectares according to EU/NOP standards (Europe and America) and is preparing to import machinery and equipment as well as applying advanced technologies, similar to Vinamilk's 13 dairy farms in Vietnam.

Organic corn and oat fields at Lao-Jagro Dairy Farm in Xieng Khouang (Laos), photo taken in May 2021.

The Covid-19 pandemic has had a certain impact on the project's construction plan. However, according to information from the business, with the current progress, it is expected that in the first quarter of 2022, the dairy farm in Xieng Khouang will be able to start "producing milk". Initially, the milk will be transported to Vinamilk's Nghe An Dairy Factory, increasing Vinamilk's source of organic raw milk according to European standards. In Vietnam, Vinamilk currently has 2 organic dairy farms in Lam Dong.

A Vinamilk representative said that Covid-19 also caused some obstacles for personnel entering Laos, but they have been arranged. Experts and key managers of Vinamilk have been living and working in the neighboring country to ensure project management.

"The number of workers will be increased according to the development needs of each phase of the project, with priority given to using local workers," added a Vinamilk representative.

The transportation of construction materials and equipment that is hindered by social distancing regulations in Laos has been overcome by the company to ensure the set progress.

The Lao-Jagro Farm Complex project has a large land fund, and when completed, its scale can be up to 100,000 heads.

As one of the leading enterprises in the domestic dairy industry, in the context of the market being affected by the prolonged pandemic, Vinamilk has determined that in order to increase business efficiency and create more value for shareholders, self-sufficiency in raw material areas is still a key strategy. Vinamilk currently has 13 farms in Vietnam, including 3 new farms launched by the enterprise under the Green Farm ecological farm system including Tay Ninh, Quang Ngai and Thong Nhat Thanh Hoa. In addition, Vinamilk is still cooperating with 6,000 households raising dairy cows. After receiving Moc Chau Milk, the total herd of cows managed by Vinamilk increased to 150,000.

According to the plan, this year, Vinamilk will import an additional 5,000 dairy cows to increase the herd, including a part for the project in Laos. In the future, Vinamilk plans to invest in expanding phase 2, increasing the expected herd size to 100,000 cows for the project in Laos, on a land fund of 15,000 to 20,000 hectares, with a total investment of the entire project expected to be 500 million USD. At the same time, it will continue to develop other large domestic projects such as farms in Moc Chau, Son La, etc.

On average, each day the herd of dairy cows managed by this enterprise provides over 1,000 tons of raw fresh milk, which is used to produce key products such as fresh milk (including brands such as 100% fresh milk, Organic fresh milk, Green Farm...), yogurt and many other nutritional products.

Vinamilk Green Farm in Quang Ngai has a herd of 4,000 dairy cows.

According to many analytical reports, the long-term consumption of milk and dairy products in Vietnam in the next 3 to 5 years is still forecasted to be positive, providing opportunities for businesses to be ready to break through and welcome the economic recovery momentum after the pandemic.

Kantar Worldpanel's market report stated that the positive change in demand for dairy products in Vietnam is due to the young population structure, increasing average income; the trend of using nutritional supplements, immune-enhancing products; the trend of consuming convenient, branded products, ensuring food hygiene and safety. In addition, Vietnam is still in the group of countries with a relatively low milk consumption level, only 26-27 kg/person/year while the average in Asia is 38 kg/person/year./.