Niche market opens up fresh opportunities for dairy industry

Amid an increasing competitive pressure caused by free trade agreements, dairy firms should seek to boost profits by developing new products, especially those dedicated to micro-nutrients and biomedical proteins.

Dairy firms are advised to make further investment in technological innovation, improve product quality, and build up large-scale material production bases. (Illustrative photo: VOV)

Delegates made the proposal during a workshop hosted by the Vietnam Dairy Association to highlight the opportunities and challenges arising from the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) on May 31 in Ho Chi Minh city.

The local dairy industry has recorded impressive growth in recent years, most notably enjoying a growth rate of 9 per cent in 2018.

Workshop participants said that in order to utilize the opportunities and overcome the challenges from the new-generation CPTPP which came into force in Vietnam from January 14 onwards, the dairy industry must increase its competitiveness by improving product quality and reducing production costs.

The CPTPP enables dairy firms to import cutting-edge production lines and equipment, selected breeding cows, and milk products at low tariffs while the trade pact also lays out a road map for the gradual reduction of tariffs on imported milk and dairy products to 0 per cent.

In order to make good use of the opportunities emerging from the CPTPP, delegates advised enterprises to make further investment in technological innovation, improve product quality, and build up large-scale material production bases.

They called upon the State to issue policies aimed at leveraging enterprises to expand their production coupled with increased technological innovation, and enlarge specialized dairy cow farming areas.

Competent agencies were urged to tighten their control of new investment projects in order to reject those designed with outdated production lines and failing to meet food-safety and hygiene regulations. Great efforts should be put into intensifying the protection of product brands, labels, and designs.

Last year, milk products imported into Vietnam amounted to US$963 million. During the past three years, the nation raked in US$250 - 300 million annually from its export of milk products to 43 countries, including the United States, France, and Canada.

The Southeast Asian country has recently signed a protocol with China to accelerate the export of milk products to the Chinese market by September.

If local dairy firms want to cut down production costs and subsequently boost their competitiveness, they must further improve their production and increase investment in technological renovation toward higher labour capacity and productivity, said Vu Ngoc Quynh, General Secretary of the Vietnam Dairy Association.