When milk supply falls short for export

“We have more than ten plants, and all of them are overloading,” Mai Kieu Lien, Vinamilk’s chairwoman and CEO, told Tuoi Tre during her trip to examine the country’s largest dairy producer’s two new plants in the southern province of Binh Duong.

“There have been times when we did not have enough supply for export, and sometimes even had to temporarily stop fulfilling the export orders to serve the domestic market,” said Lien, who has recently listed on Forbes Asia’s Women in the Mix, 2013: the year’s Top 50 for Achievement in Business.

Vinamilk wrapped up 2012 with a US$180 million export turnover, accounting for 14 percent of total revenues.

Modest as it is compared to the whopping revenues of the company, whose shares are the ‘hottest’ in the local stock market, the figure has a significant meaning as milk is not an export staple of Vietnam, and more than a decade ago, there was only imported baby powder milk available in the country.

In 1998, when the first made-in-Vietnam baby formula was produced and distributed under the Dielac brand, Vinamilk had to struggle to get its product sold.

“We had no mindset for marketing and advertisement at the time,” Lien recalled.

And yet, more than ten years later, things have changed completely. Dielac baby milk powder is now shipped to as many as 23 nations, including strict markets such as the Middle East, the Philippines, and Thailand.

“Forty years ago a minister told me that Vietnam could only successfully export two commodities: coffee and milk,” Lien said, adding that no one at that time believed the forecast could ever come true.

“While Vietnam still has to export raw coffee, we did achieve the target with milk,” she said proudly.

At a time when 70 percent of the domestic milk market is still dominated by foreign products, exporting Vietnamese-made milk powder proves the high-quality of Vietnamese products.

It also proves that chances are always there if businesses can find the right niche markets, she said.

While coffee, rice, and other agricultural products are struggling to increase their values for exports, the story of Vinamilk marks a bright point in the country’s exporting sector.

Vinamilk has targeted a $3 billion revenue in 2017, in order to enter the list of 50 leading dairy producers in the world.

With the two new modern plants, the ambition is not too far off.