After many outbreaks from the African swine cholera to the COVID-19 pandemic, the livestock sector is changing rapidly towards scale and professionalism, opening up opportunities for investors interested in the high-tech agricultural sector. Post pandemic is also an opportunity to break through, so many distribution and livestock enterprises are now consolidating their production supply chains to be ready to seize opportunities.
challenging intertwining opportunities for livestock sector
Experience from advanced countries shows that for the livestock sector, breeding, nutrition and management/ sanitation of the barn are the key to success or failure of the businesses. The successive outbreaks have caused the price of the livestock and retail sectors to skyrocket, turning challenges into opportunities for those enterprises that professionally, seriously and fully implement biosecurity measures and have a better understanding of high-quality breeding, and re-populate them properly. This requires a large-scaled, focused and methodical investment from investors with financial potential, knowledge and long-term vision in the field of livestock.
C.P. Vietnam Food Joint Stock Company (under C.P. Vietnam Feed Joint Stock Company) is a typical example. Before the pandemic, the company was setting up a chicken exporting production and processing project in Binh Phuoc, which was aimed to export processed chicken under the first closed model of C.P. Vietnam. It is estimated that the investment budget is up to US $200 million and the capacity reaches 50 million per annum.
Mr. Sawang Chanprasert, Deputy General Director of C.P. Vietnam Food JSC shared that the COVID-19 pandemic has impeded the project completion progress due to social distancing and the Government’s pandemic control measures. However, as the COVID-19 pandemic is pushing the world into the food and supply chain shortage, recognizing opportunities for exporting goods in the supply chain to foreign markets is also a potential direction for the livestock sector. Specifically, C.P. has pushed the progress as fast as possible to bring the project into operation, “Aiming at both domestic and export market, we have readily prepared human resources and others to deploy when possible”..
Further to the project under construction, Mr. Sawang Chanprasert said that this project uses the most modern technology during the process, from inputs such as animal feed, chicken farms to processing factory, in order to produce chicken products of quality standards, clean and safe for consumers.
“If you want to raise good livestock, good product, you need a high-quality feed mill, shed and food processing factory”. Shed and food processing factory must use high-quality materials, design solutions to construction must meet the requirements of C.P., provided by reputable corporation meeting qualified international.
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As for Ba Huan Joint Stock Company, Mr. Pham Thanh Hung, Deputy General Director of Ba Huan Joint Stock Company admitted that when the pandemic unfolded, Ba Huan’s sales in schools, restaurants and hotels decreased dramatically. The amount of products sold only to schools, restaurants and hotels generated little revenue. Therefore, Ba Huan has to shift to supermarkets and online channels to not be affected much by the pandemic.
Thanks to shifting to supermarket and online channels, Ba Huan has not been affected by pandemic
At the same time, to seize opportunities and be ready for breakthroughs after the pandemic, the company has completed a food safety and hygiene chain from farm to table, with a high-tech 18-ha livestock farm with a total of 1 million headcounts and a feed processing plant with a capacity of 20 tons/hour in Binh Duong; a 2-ha factory processing poultry eggs with a capacity of 185,000 eggs/hour in Ho Chi Minh City; a 5-ha food processing factory with a capacity of 50 tons/day in Long An; a 30-ha high-tech meat chicken farm with a total of 3 million chickens in Long An. In particular, the Ba Huan’s average daily poultry egg supply is from 600,000 – 1 million eggs.
manufacturing, retail chains rearranging supply chains
During the pandemic, the retail distribution supply chain played a very important role and was considered to be less affected by the pandemic. Those manufacturing enterprises with a complete supply chain to the market will ensure the output and earn trust from consumers and ensure good revenue and profit. Masan Group is considered a typical example by establishing an integrated consumer ecosystem platform by merging Masan Consumer Holdings and VinCommerce (the owner of more than 3,000 supermarkets and convenience stores VinMart/VinMart+) to establish a leading consumer – retail corporation in Vietnam.
As a result, during the COVID-19 pandemic, Masan ensured that the supply chain operated smoothly, providing sufficient goods with stable prices and high quality to consumers. Notably, COVID-19 broke out at the right time when the African swine cholera outbreak tended to return in some localities, but Masan MEATLife, a member company of Masan and the owner of MEATDeli meat brand, has strengthened the pandemic control measures to ensure the safest pork products to consumers.
It can be seen that COVID-19 poses many challenges to the whole economy in general and the retail sector in particular. However, on the bright side, this is a crisis to trigger innovation, leading the retail sector in Vietnam to transform more quickly toward modern retail to align with new consumption trends.
Accordingly, the online trend proliferates as a flying tiger amid the social distancing to prevent the spread of the outbreak and Masan has quickly implemented many online selling solutions, ordering via phone that have brought benefits for customers, ensuring VinMart / VinMart+ retail chain and MEATDeli cool meat distribution system to provide consumers with goods quickly and conveniently.
Also following this trend, Saigon Co.op retailer with more than 800 points of sale ranging from shopping centers, hypermarkets, supermarkets to convenience stores implemented orders by phone to strengthen its position during pandemic. The acceleration of these forms has maintained Saigon Co.op’s sales, in which the online sales channel has increased 10 times compared to the past. The retailer said it would continue these solutions even post pandemic to create diversity in the retail supply chain for consumers.
According to Masan, drastic solutions have helped VinCommerce (VCM) achieve a 40% net revenue growth in Q1/2020. Profit improved significantly with the EBITDA margin in Q1/2020 reaching 5.1%, up from 9.1% and 10.7% in Q1 and Q4, respectively. Masan MEATLife’s meat and husbandry division continue to expand in size and revenue in the first quarter of 2020, growing 85% compared to Quarter 4, 2019.