Vietnam's Dairy Sector Aims for Greater Self-Sufficiency by 2045
Vietnam's dairy industry is setting ambitious goals to enhance self-sufficiency and reduce reliance on imports by 2045. Currently, the country imports more than $1 billion worth of dairy products each year, primarily in the form of milk powder, to meet domestic demand. This dependency not only affects the trade balance but also limits the competitiveness of local dairy enterprises.
To address these challenges, the Dairy Industry Development Strategy aims for a 12-14% annual growth rate by 2030, with processed liquid milk output expected to reach approximately 4.2 billion litres per year. The plan also targets domestic fresh milk production of about 2.6 billion litres annually, increasing the domestic supply ratio to 60-65% of processing demand.
By 2045, the industry aims to maintain an annual growth rate of 5-6%. The output for processed liquid milk is projected to rise to around 9.7 billion litres per year, with fresh milk production accounting for roughly 80-85% of domestic processing needs. Milk powder production is expected to reach about 415,000 tonnes annually, and per capita milk consumption is targeted at approximately 100 litres per year.
The Vietnam Livestock Association, led by Dr. Nguyễn Xuân Dương, has highlighted the strategic importance of transitioning from reconstituted milk to fresh milk. This transition supports national development and agricultural self-reliance, offering benefits to public health and local farmers.
To support this shift, the industry plans to establish high-tech dairy farms and integrate cooperatives and household farmers to increase raw milk output. Companies like TH Group are exploring scenarios to meet around 70% of domestic demand by 2035 through both high-tech farming and traditional smallholder methods.
Ngô Minh Hải, chairman of TH Group's board, emphasized the importance of expanding the dairy herd as a prerequisite for achieving raw material self-sufficiency. This expansion is seen as critical for aligning with market trends and diversifying products to meet specific nutritional needs.
Vinamilk's Research and Development Director, Bùi Thị Thu Hoài, noted the potential of leveraging data analytics to forecast demand and shape healthier lifestyles. The School Milk Programme, which serves millions of children, could play a pivotal role in creating a sustainable consumption channel.
Industry stakeholders have proposed various policies, including a 0% VAT rate on domestically consumed fresh milk and subsidies for high-tech dairy farming. Land consolidation and converting underutilized agricultural and forestry farms into livestock zones are also suggested to strengthen the domestic supply chain.
