Market Information
Southeast Asia

Slaughter Line and
Meat Processing Equipment
Report - Vietnam

June 2003

Prepared by the
Booth LeChay & Associates Ltd., Hanoi
and the
Canadian Trade Commissioner Service
© Department of Foreign Affairs and International Trade

Executive Summary

The following report is an analysis of the demand for slaughter line and meat processing equipment in Vietnam. The purpose of this market and investment analysis is to determine the current and near-future opportunities for Canadian firms to enter this market

The meat processing sector (primarily pork) is entering a period that can be characterized as an emerging market - firms are in the process of increasing capacity in slaughter line and meat processing technology. As well, upstream supply lines, from feed to farms, are moving from household production to an agro-industrial model with corresponding increases in efficiency.

Interviews with executives in the Red River Delta and the Mekong Delta regions revealed that current and planned equipment investments are estimated at approximately $106.3 million (USD$70 million). This investment only includes interviewed firms, indicating that the market is in fact much larger. The demand for equipment ranges is split between smaller, lower volume equipment and turnkey facilities to fully and semi-automated sub-production lines (slaughter line to value-added processing) There is also strong demand for packaging equipment.

Most interviewed firms have clearly defined growth plans, largely based on internal capital resources or substantial equity with financing. It remains to be determined if these plans are going to be effective, especially to meet international production standards. Nevertheless, the new industry catch-words are "standards and hygiene." Some of this is focused on interest in overseas markets with phyto-sanitary standards rather than on Vietnam's market. This significant investment is in response to the limited production capacity of slaughter line and meat processing firms and the rising consumption of fresh meat and processed meat products.

The background to these investment plans is the increase in the consumption of meat in from 17.9 kg to 22.5 kg per capita/year from 1995 to 1999. Recent estimates place current consumption at 25 kg per capita/year. Government forecasts estimate consumption will rise to 35 kg by 2010(1). This significant potential demand should be qualified by the fact that questionable statistical gathering methods in Vietnam and the necessity for a conservative reading of the market. Nevertheless, rising retail prices for pork are indicative of the growing demand.

Government policies strongly encourage investment in agro-processing technology, with access to subsidized loans or loan guarantees. The specific investment outlays have yet to be determined for this program although interviewed executives stated that access to this investment capital will be competitive and based on market principles. These policies are also supported by pork export incentive programs. Furthermore, Vietnamese firms will face domestic competitive pressure in 2006 when the ASEAN Free Trade Agreement enters into force and import taxes on processed meat products falls from 20-30% to 5%. The current discussions on China's entry into ASEAN will also create significant pressure as Chinese pork producers could access the market, at a much lower cost.(2) Other trade treaties, such as the Bilateral Trade Agreement with the United States and Vietnam's application to accede to the World Trade Organization (WTO) by 2005 further add to this pressure.

A stable competitive equipment market with defined firm market share has not yet developed; nevertheless, competition is increasing and gaining a foothold in the market will require determined efforts on the part of Canadian slaughter line and meat processing equipment manufacturers. Regional and international firms who have already entered this market are now focusing on consolidation of existing markets, and expansion to take advantage of the significant opportunities.

Market Overview

Introduction: Emerging Market Demand

The meat processing sector (primarily pork) is entering a period that can be characterized as an emerging market - firms are beginning to make substantial investments in production technology.

The growth in domestic consumption markets and expanding export markets have reached a level that calls for more substantial capital investment. Mechanized processing equipment is non-existent (primarily manual slaughtering), or not reliable nor efficient, and production sub-processes are not efficiently engineered. Initial investments in the late 1990s for freezer lines, and a few stand-alone machines (such as de-hairing) are worn out, or of low production capacity. More importantly, most firms are undergoing a transition from manual to mechanized production.

The focus of the majority of interviewed executives is to improve slaughter line production standards and consolidate current markets, and to further expand into value-added meat products (sausages and cooked meats), and other types of meat processing (chicken and beef).

There is awareness that entire production processes need to be re-engineered, focusing on key hygiene requirements. Demand is high for international standard production equipment and food technology engineering, complete with service and maintenance. This demand for quality and service is in response to the poor performance of foreign rebuilt or inexpensive equipment, purchased during the early to mid-1990s.(3)

Recent and Potential Growth

Growth patterns in Vietnam are following a classic pattern of increasing standard of living and new consumption markets; a greater demand for specialty foods is resulting from urbanization, the necessity for time efficiency and changing lifestyles. The ongoing expansion of retail outlets, supermarkets and fast food franchises are also fueling the demand for processed meats. As well, consumption of local food products is growing with the surge of foreign tourism arrivals.

Industry executives are getting to know the most important factors for accessing export markets. Most firms are aware of the necessity to strive towards international standards and significantly improve production processes. "Standards and Hygiene" are becoming the new industry catch-words. Growth in exports continues to be limited by the lack of stable veterinary Treaties or other agreements that act as barriers for exports. Russia is the only country having full veterinary treaty status with Vietnam. Canada has recently agreed on veterinary certificates for nine meat and livestock products, but the focus of these agreements was more to secure access to Canadian genetic material, rather than to establish market access for Vietnamese products in the Canadian market (a much longer-term proposition).

Specific Growth Plans of Vietnamese companies

Most local companies have clearly defined growth plans, largely based on internal capital resources or substantial equity with financing. Considering these companies' current revenues, as well as the very low cost of production, capital is available for investing in equipment.

Overall, the industry has grown at 4.4% per year, although firm specific growth is often much higher, and in certain cases upwards of 10% to 20% per year.(4) This reflects the sustained growth rates achieved by the Vietnamese economy in the past several years.

Overview: The Structure Of The Meat Processing Sector

Structure

According to industry analysts, there are approximately 290 slaughterhouses in Vietnam. The majority of these firms are present or former state companies and many of these firms are not market competitive. A significant number of these firms are perishing or are likely to perish as more efficient firms responding to market forces, overtake take their present minor market share, and state subsidies become less available due to competitive market forces for investment capital(5). Regulatory standards have yet to influence the structure of this sector.

The competitive meat processing industry can be divided into four levels based on volume of production, management sophistication and relative geographic coverage and span:

A first level is made of three major, state-owned integrated firms:

• Vietnam Animal Industry Corporation (VISSAN);
• Ha Long Canned Foods Joint Stock Listed Company; and
• Animex.

These companies own a combination of slaughterhouses, processing plants, and refrigeration facilities in Ho Chi Minh City (HCMC), Danang and Haiphong (the latter only for Ha Long Canned Foods). VISSAN is the only company that is fully integrated from feedlots to retail outlets. It has been stated that Animex plants are of the few plants in Vietnam that comply with international hygiene standards (only three of the total in Vietnam meet international standards,(6) although this could not be verified during the field research activities.(7)) These three firms employ upwards of 1000 employees each. Markets are both domestic and export. Production at each is above 50,000 tonnes per year.

The second level of companies is made up of firms producing between 5000 and 50,000 tonnes per year. While there are only two firms currently at this level, it is likely that they will be joined by strong regional players in the near future as competition increases, cost margins fall, but transportation costs remain high.(8) This reflects the competitive environment, with current under-supply, high demand and significant profit margins that are likely to change over the next market cycle.

The third level is made up of approximately 20 to 30 slaughterhouse and meat processing firms. These firms are predominantly focused on slaughter and freeze, and more recently pig farming to lock in supply lines. Downstream value added is just beginning, such as cooked and sliced pork for the retail market. These companies are concentrated in:

• The City of Haiphong and the surrounding Red River Delta provinces; and
• HCMC and surrounding region.

These firms employ on average between 100 and 200 employees. An important factor to note is that according to industry executives, there are more firms than are widely known but these firms operate as trading companies. These second tier firms produce from 1000 to 5000 tonnes per year for both the domestic (especially wholesale), and export markets.

According to industry analysts, the firms in the fourth tier number "in the hundreds". These firms are involved in a much broader range of activities, from slaughtering to value-added production such as processed and fresh cooked meats for almost exclusively, local markets. The city of Haiphong alone was stated as having over 20 small companies involved in these activities(9). These firms are best characterized as family businesses. Most of these firms produce well below 1000 tonnes per year, while value-added processing firms produce less than 10 tonnes per year.

Meat Processing Equipment Lines

According to factory research and inspection, mechanized slaughter line meat processing equipment is evident in the stages of production noted below. It should be noted that the majority of this equipment is old, of low productivity and in need of upgrading, with the exception of new meat processing firms catering to the high income market(10). The majority of these firm's production processes or equipment do not meet international equipment standards for certification(11). The following table is to provide a general picture of the equipment lines.

Source: BLCA field research and interviews with experts

Production Process Development

Once again, there is significant demand for slaughter line and meat processing equipment, as well as well as the capital to pay for it. Improved technology is the key to overcoming the current constraints.

Currently, the industry is characterized as being unhygienic, from animal slaughtering, to meat processing and the meat distribution system. The problems arise from the arrival of poor quality and damaged animals at the slaughterhouses, through to the recurrent contamination of meat as it moves from the slaughterhouse to the processor, to the retailer and finally the consumer.(12)

Seeing Opportunity

The vast wealth made in the booming aquaculture sector is a constant reminder to meat processing firm executives that they too have the potential for substantial market growth. These executives are also getting to know the correct equation for the growth and development of their firms, and general opportunities and challenges in the sector. BLCA field interview

Future Processing Equipment Growth

Specific investment projects are divided to the scale of production. With the exception of VISSAN, most investment focuses on semi-mechanization. These range from full-scale turnkey packages to single item units, such as a small sausage machine. The growth is divided between scale and production processes.

Big scale - Turnkey Packages for Factory production

• Modest investment of $1.5 million (USD$1 million) to large multi-plant investments of $60.7 million (USD$40 million).
• There is the significant potential for turnkey packages. The market for this equipment is limited to the top tier producers.

Medium to Small Scale - Production Sub-Process Equipment:

Medium to small-scale production processes are primarily targeted at firms producing upwards of 5000 tonnes per year(13). These companies are characterized by a relative lack of awareness in available technology, although capital is not regarded as an impediment. This reflects the market as being "early stage", as well as the limited numbers of technical exchanges following Vietnam's diplomatic isolation (the US embargo only being lifted in 1995), former reliance on East Bloc technology, and former lack of resources. The following equipment is needed:

• Kill Floor Equipment: potential CO2 or stunning equipment, mechanical moving equipment;
• Mechanical de-hairing machinery, scalding, wash and animal preparation equipment (hygiene) prior to slaughtering;
• Conveyors and cutting line technology;
• Secondary processing technology such as grinders, mixers, blenders and moving equipment;
• Hygiene and safety systems;
• Value added processes such as smokehouse technology, sausage making machines and others.
• Chicken and beef processing equipment.

Small Scale - Stand-Alone Equipment

There is a broad demand for small-scale stand-alone equipment. The critical factor for demand for this equipment is the price level for different production processes. Stated needs are for small cutters, grinders and mixers, sausage making machinery and other processed meats. This market is very difficult to aggregate with accuracy. To determine the demand for equipment would clearly require more comprehensive equipment and market research.

Specific Investment Projects

Due to the brevity of analysis, not all firms' investment plans are listed. Given the general demand in the industry, most firms are currently looking at new equipment, or will be in the near future. Interviewed firm executives stated the following list.

Background To The Demand For Meat Processing Equipment

Domestic Consumption Demand

Increasing economic prosperity in Vietnam has a direct relationship to the growth in food consumption and correspondingly demands for meat processing. Average annual meat consumption per capita increased approximately from 17.9 kg to 22.5 kg from 1995 to 1999. (Accurate and unbiased statistics are notoriously difficult to obtain in Vietnam; almost certainly the consumption rates have been increasing by 10% per annum since then). Government projections call for an increase in consumption to 30 kg per capita in 2005 and 35 kg per capita by 2010.(14) Pork accounts for the majority of meat consumption, upwards of 60%. Considering regional pork consumption patterns of up to 50 kg per capita per year, demand will continue to grow for a long period.(15) Consumption growth is telling evidence in itself but the increasing efficiency of upstream supply lines and downstream market expansion confirms the market driven development of this sector.

Animal Feed: Booming Demand and Limited Supply

Commercial feed production increased by 23% in 1999 over 1998 (the last year for which statistics were available). The share of commercial feed consumption has increased from 1% to 27% in the same period of time. The demand for commercial feed is increasing, while prices are falling; an important indicator that markets are becoming more efficient. Foreign investment has been coming into this sector and this growth in animal feed is anticipated to continue as current demand is approximately 2-3 million tons/year while supply is limited to only 1.5 million tons/year. Danish Embassy, 2001

Increasing supply of meat, especially pork

Overall, the meat industry is currently outputting from 1.7 to 1.9 million tonnes per year: 77% pork, 16% poultry and 7% cattle and buffalo. Pig meat is the predominant meat of choice in Vietnam.(16)

The national pig herd has grown at a rate of 5% per year since 1990. As well, the off- take rate has increased by close to 7% annually. At 5.9%, the growth rate was faster in the first half of the decade (1990-1994), compared to 3.5% from 1995-1998. Animal weight has increased from 59 kg to 68 kg/head.

The number of buffalo, which are primarily used as draught animals, are declining. Cattle herds stand at 4 million head in total, 40% of which are used for work. Herd and the annual off-take (measured in live weight) have grown at 5-6 % since 1990. Since 1995, the annual growth rate has slowed to 3%. The lack of demand - corresponding to the absence of cattle processing facilities (low quality meat) is a major factor for the limited growth in supply.(17)

According to government statistics, 60% of the pig population is located in the north of the country. Most farms are small, having five animals or less. Southern Vietnam has most of the large farms and high quality pigs in Vietnam. Five percent of pig herds are being reared on an agro-industrial model, having genetically improved varieties and commercial feeds. The second grouping of farms that produce 10% of the national herd(18) are mid-sized farms with approximately 100 pigs. These farms are in the process of switching to agro-industrial models and in the near future will be a significant engine for the growth of supply.

Seventy percent of pork is sold fresh onto the market and the remaining 30% is processed. Higher quality imported pig stock sells at a premium on the market, upwards of 50% more than low grade domestic stock(19) Demand for improved breed stock has skyrocketed and there were several interviews where firm executives state that they were in direct contact with Canadian and American genetic firms. Several processing firms also stated that they would like to import frozen Canadian pork.

Increasing Exports

Export of pork has rapidly increased from 18 000 tonnes in 2000 to 32 000 tonnes in 2001.(20) Executives at VISSAN stated that they have lost the Russian market to American and Chinese exports, leaving only Hong Kong, and to a lesser extent, Cambodia and Japan. The main obstacle for increasing exports, after high production costs, is the lack of bilateral veterinary agreements. Russia (CIS) is the only country with bilateral veterinary treaties. China, Malaysia, the Republic of Korea and Japan have only issued temporary licenses. In general, another obstacle is the lack of export finance facilities available to companies, either from government sources or from commercial banks.

Government Policies

Encouraging Signs

The most common complaint among firm executives was the lack of pro-active government policies to encourage the animal husbandry and meat processing sectors. This attitude began to change in 2001 as new policies focused on the agro-processing industry were passed:

• On 2 January 2001, the Prime Minister of Vietnam has signed the Decision No. 02/2001/QD-TTg to provide policies for financial assistance to the agro-processing sector. According to this Decision, agro-processing firms may get up to 90% of total investment from the Development Assistance Fund (DAF). DAF also provides guaranty of 100% loan value to these firms in case they can get loans or financing from other sources.
• Decision 133/2001/QD-TTg dated 10 September 2001 of the Prime Minister also gives the green light for agro-processing firms to obtain loans.

However, interviewed companies stated that it is difficult to get funding from DAF. Funding is determined by provincial People's Committees and shared by different agro-processing sectors, dominated by state-controlled enterprises, regardless of the registration. Overall, DAF is made available to less than 15% of private sector companies in Vietnam, although this accounts for most exports and job growth. Meat processing companies stated that their preference is other sources of funding, usually "grey market" financing, although commercial banks are becoming more and more active.

The Government of Vietnam has also created incentives to encourage investment and development in agro-processing sector. Resolution No. 6-NQ/TW dated 10 November 1998, the Government listed livestock breeding as an official production sector in the nation's economy. This decision will have far-reaching effects as the formal recognition of the sector shall provide the foundation for cross ministerial policy platforms and program activities. Most recently, the Ministry of Finance's Decision 65/2001/QD-BTC, dated 29 June 2001, provides an incentive bonus for the export of pork at VND 900 (Cdn$ equivalent?) per $1.00 worth of export. There are a number of other legal documents giving incentives to livestock breeding and processing.

Meat processing equipment, according to the Ministry of Finance, is subject to a 3% to 5%. import tax. Tax on equipment for special projects can be waived. Nevertheless, all equipment is subject to a 5% to a 10% VAT (GST), although this needs to be confirmed on a case by case basis. Depending on the region, there may be other tax incentives that could apply to meat processors, such as the remote area incentives or other incentives.

As the deadline for implementation of tariff reductions as part of the ASEAN Free Trade Agreement (AFTA) draws closer, Vietnam will be seriously challenged to maintain and develop its domestic production for processed meats. The current tax on imported processed meat products ranges from 20% to 30%, of which pork products have the highest tax. After the AFTA treaty is in force in 2006, the tax for processed meat will only be 5%. The potential impact of the BTA and WTO treaties are less easy to predict, although many countries will reserve pre-accession negotiations for commodities such as pork and beef. The local companies interviewed were well aware of the changing environment, although there is no national association for the sector.

Business Practices For Equipment Sales In Vietnam

Representation:

Predominantly, customers in Vietnam prefer to buy imported equipment from companies and manufacturers who have representatives in Vietnam, whether through representative offices, locally-based companies with dealership agreement or through independently ordered equipment. In-country representation has proven to be the most effective way to sell equipment in Vietnam. Vietnamese consumers like "tangible" evidence of manufacturers' commitment to the market, and want to be able to contact them quickly and easily in the event that there are technical issues (after-sales service and training are increasingly important sales factors). In-country representatives can better understand business customs and regulations, to structure equipment sale arrangement more efficiently and cost-effectively. They are also more able to assist customers in lobbying for soft loan, customs procedures, delivery tracking, etc. Vietnam is a developing economy, and still qualifies for concessionary loans and grants from a number of bilateral and multilateral sources, many of which are used by manufacturers of the same country of origin.

Marketing and Promotion

The most effective way to promote equipment is to participate in trade fairs, wherever possible, and to organize technical seminars with the participation of end-user companies, related ministries, and provincial authorities. Follow up work after seminars should include meetings with the company decision-makers. Ministry people are important in cases where firms are state owned. Marketing materials need to be tailored to the local style and presented in the Vietnamese language. Technical visits to equipment manufacturing sites or to-equipped-facilities are useful in providing a more direct marketing approach.

Equipment Sales

Most equipment sales are done on a one to one basis between a dealership or representative and the individual firm's executives. Relationship building is of the utmost importance. Visited executives have stated that they have received sales people in the past but follow up contact has generally been poor and sporadic. The request for catalogues during the research process speaks of the curiosity and the demand. Site visits to Canada are very important and timely business visa processing is critical. Several firm executives have stated that the difficulty in obtaining Canadian visas was taken as a sign that Canada (in general) is not interested in doing business. This is a perception that needs to change, and change quickly, and recent changes to visa issuance through the Consulate-General of Canada in HCMC (from January 2003) will hopefully address some of the concerns (most importantly, quick turnaround). Canadian companies wishing to facilitate Vietnamese visits to Canada should advise the commercial sections of the Embassy or Consulate-General as soon as they learn about prospective visits.

Purchases of large equipment in Vietnam, particularly through state-owned companies, are often arranged through tenders. It is critical to get to know and work with customers before the tender documents are made and released to the public. This is to ensure that the manufacturer's equipment specifications match the tender document specifications. This takes patience and time. Financial leasing is a potential source of funding that may have some potential in Vietnam, particularly as this sector becomes better known and as the sector becomes further liberalized as part of the US/Vietnam BTA.

Payment and Contracts

Payment for imported equipment is generally done through letters of credit. This is now a standard method in Vietnam. Any concerns regarding Vietnamese issuing institutions can be addressed to the Canadian missions in Vietnam. All contract details should be carefully analyzed, especially concerning warranties and replacement parts, payment systems and tax liabilities. Relying on recourse to the law is not a suggested strategy as the Vietnamese judicial system is poorly developed and enforcement, particularly against state-owned companies, difficult. Offshore arbitration is a common business practice between foreign and domestic parties who enter into serious business relationships; again, Vietnamese courts require enforcement.

The services of Export Development Canada and of the Canadian Commercial Corporation are available for Vietnam. For further details, contact the Canadian missions in Vietnam.

The Competition For Slaughter Line And Meat Processing Equipment

As the meat processing sector is in an emerging market period, there has yet to be the substantial development of competitive equipment markets having defined company market shares. Strong demand is only now emerging and companies with a presence in Vietnam, either representative offices or dealership networks, will take the near future market share.

The Danish Embassy has focused effort on broadening Danish firm's access to the animal husbandry and meat processing markets. This includes a recent market analysis of the Pig Meat Sector and efforts by their trade division to promote bilateral business relations include the mixed credit program (subsidized credit).

Two third-level meat processors (under 5000 tonnes per year) in northern Vietnam have recently completed plant upgrades with German equipment. VISSAN executives have already spoken with Dutch, German, Italian and Spanish manufacturers regarding their 40 million dollar investment plans.

The competitive equipment market is divided into two categories: representative offices and agencies with local firms. Representative offices most often deal with a broad range of food processing equipment and are focused on larger turnkey factories or more expensive sub-process equipment. Equipment bearing the brand names of Seiderman, Cossini, and Mouler are currently sold in-country.

It is more difficult to identify and verify information on Vietnamese trading firms. According to the people interviewed in this research, these trading firms appear to be opportunistic, rarely having exclusive dealership arrangements, and reluctant to divulge which equipment they are representing and selling for fear of having in-country competition. This dealership relationship is a point to consider for market entry strategy for Canadian companies. The Canadian missions in Vietnam can provide advice on individual companies, particularly if referred to by third parties.

A number of countries, such as Spain, the United States and the United Kingdom are increasingly focusing on commercial missions aimed at the growing food preparation and packaging sector. The Canadian missions in Vietnam are interested in a similar technical seminar and mission planned for 2003. Interested parties should contact the missions (contacts below).

Key Contacts And Support Services

Canadian Contacts

The

Canadian Embassy in Vietnam
31 Hung Vuong Street,
Hanoi, Vietnam
Tel.: (84-4) 823-5500
Fax: (84-4) 823-5333
E-mail: hanoi-td@dfait-maeci.gc.ca
Internet: www.infoexport.gc.ca/vn

Consulate General of Canada in Ho Chi Minh
Metropolitan Building,
235 Dong Khoi Street, Suite 1002
District 1,
Ho Chi Minh City, Vietnam
Tel.: (84 8) 824-5025
Fax: (84 8) 829-4528
E-mail: infocentre-hochi@dfait-maeci.gc.ca
Internet: www.infoexport.gc.ca/vn

Canada Business Service Centres
Toll-free: 1-888-811-1119
Internet: www.cbsc.org

Canadian Commercial Corporation
Metropolitan Centre
50 O'Connor St., Suite 1100
Ottawa, ON K1A 0S6
Tel.: 1-800-748-8191 or (613) 996-0034
Fax: (613) 995-2121
E-mail: info@ccc.ca
Internet: www.ccc.ca

Canadian Government International Trade Centres
Internet list of addresses by province www.strategis.ic.gc.ca/SSG/ig00006e.html
E-mail: strategis@ic.gc.ca

Department of Foreign Affairs and International Trade
125 Sussex Dr.
Ottawa, ON K1A 0G2
Internet: www.dfait-maeci.gc.ca

Southeast Asia Division (PSE)
Contact: Shirley Ong, Trade Commissioner
Tel.: (613) 996-8199
Fax: (613) 944-1604
E-mail: shirley.ong@dfait-maeci-gc.ca

Market Support Division (TCM)
Contact: Richard Philippe, Trade Commissioner, Agriculture, Food and Beverages
Tel.: (613) 995-1773
Fax: (613) 943-8820
E-mail: richard.philippe@dfait-maeci.gc.ca

Export Development Canada
151 O'Connor St.
Ottawa ON K1A 1K3
Tel.: 1-888-332-4593 or (613) 598-2500
Fax: (613) 598-6697
E-mail: export@edc.ca
Internet: www.edc.ca

Foreign Competitors

Jons. Riechermann Hamburg Company
(Hanoi Rep Office)
#108, Xuan Dieu St.
Tay Ho District
Hanoi, Vietnam
Contact: Nguyen Minh Tan, Director of Food Processing Equipment
Tel.: (84-4) 823-8661
Fax: (84-4) 823-8717
Chief Representative: Stephan Prutzmann
Number of Staff: 17 (2 foreigners)
Representing: Equipment from Germany and Italy, have sold to VISSAN, all information regarding meat processing projects for investment in Vietnam

Cong Ty Ha Yen (domestic trade firm)
#7, C2 Alley 178, Thai Ha Street
Hanoi, Vietnam
Tel.: (84-4) 537-2704
Fax: (84-4) 537-2378
Director: Mrs. Nguyen Thi Lan Anh
Representing: Locally manufactured food processing equipment and small scale foreign equipment

Techgel Ltd. (domestic trade firm)
11 Ly Van Phuc Street
District 1
Ho Chi Minh City, Vietnam
Tel.: (84-8) 822-3118
Fax: (84-8) 820-5587
Chief Representative: Dang Cong Ngon

Ferrostaal Ltd. (Hanoi Rep Office)
Room 806, #2 Ngo Quyen
Hoan Kiem District
Hanoi, Vietnam
Chief Representative: Trinh Minh Tuan
Tel.: (84-4) 826-8989, 826-8696
Fax: (84-4) 934 3422
Number of Staff: 5
Representing: Meat processing equipment from Germany; provide turnkey equipment lines or separate pieces; participating in several meat processing projects in Vietnam

Polyco Ltd. (domestic trade & manufacture firm)
767 Giai Phong
Hanoi, Vietnam
Director: Dinh Van Thuan
Tel.: (84-4) 864-1540
Fax: (84-4) 864-3779
Representing: food processing equipment for the domestic market

Tetra Pak Juroong Pte. Ltd. (HCMC Rep Office)
#138, Ly Tu Trong
District 1
Ho Chi Minh City, Vietnam
Contact person: Mrs Tu
Tel.: (84-8) 825-7100
Fax: (84-8) 825-7101
Chief Representative: Michael Zacka
Representing: Food processing equipment

Industry Contacts

These are divided into the two major geographic regions of Vietnam: the northern delta, surrounding the capital of Hanoi and its port of Haiphong, and the southern delta, surrounding the country's chief business center of HCMC. These two areas each account for approximately 40% of Vietnam's 80 million population.

NORTH DELTA

Kim Lien Food Processing Co. Ltd.
D9 F1 Kim Lien
Dong Da district
Hanoi, Vietnam
Tel.: (84-4) 852-5628
Fax: (84-4) 852-5628
Contact: Mrs. Le Thi Tuyet, Director
Main products: value added processed pork, beef, chicken.

Hien Thanh Co. Ltd.
251 Minh Khai
Hanoi, Vietnam
Contact: Mr. Nguyen Minh Phong, Director
Tel: (84-4) 636-2020
Fax: (84-4) 862-2209
Main products: value added processed meat.

Phu Tho Foodstuff for Export Enterprise
Minh Phuong Commune
Viet Tri city, Phu Tho province.
Contact: Mr. Le Van Ban, Director
Tel: (84) 0210-846-513
Main products: frozen suckling pig, pork in block/pieces for export.

Hai Duong Food Processing Export Company
2 Le Thanh Nghi
Hai Duong Province
Contact: Mr. Nguyen Thanh Dau, Director; H/P: 091-325-578
Tel.: (84) 0320-852-617
Fax: (84) 0320-856-650
Main products: frozen suckling pig, pork in block/pieces for export

Foodstuff Processing for Export Co. Ltd
Add: 48B, Team 25, Group 9, Quan Tru commune, Kien An Dist., Haiphong.
Tel: 031-877-307; Fax: 031-876-177
Contact: Mrs. Nguyen Thi Thanh Hao, Director H/P: 090-344-6928
Main products: frozen suckling pig, pork in block/pieces for export.

Vietnam Animal Processing Enterprise for Export (Anprex Haiphong)
An Duong Commune
An Hai Distr, Haiphong.
Tel: 031-871-631; Fax: 031-871-813
Contact: Mr. Vu Van Tanh, Director; H/P: 091-353-8582
Main products: frozen suckling pig, pork in block/pieces for export.

Haiphong Foodstuff Processing for Export Enterprise

SOUTH DELTA

Dong Nai Livestock Company
238-1A Highway
Bien Hoa
Dong Nai, Vietnam
Tel.: (84) 061-817-153
Fax: (84) 061-823-102
Contact: Mr. Phung Khoi Phuc, Director
Tel. (84): 091-394-0877
Main products: breeding pigs, processed and fresh pork

CP Vietnam Livestock Co., Ltd, Food Business
Bien Hoa Industrial Zone - No.2
Bien Hoa
Dong Nai, Vietnam
Contact: Mr. Piyachok Piyangsu, Factory Manager
Tel.: (84) 061-991-034
Fax: (84) 061-991020
Main products: Processed chicken and pork

Le Gourmet Co., Ltd
80/12 Ba Huyen Thanh Quan
District 3
Ho Chi Minh City, Vietnam.
Tel.: (84-8) 935-1107
Fax: (84-8) 935-1106
Contact: Mr. Emmanuel Lepretre, General Manager
Main products: value added processed meat

Phu Cong Minh Trade And Service Co., Ltd. (PCM)
9 Tran Doan Khanh Street
District 1
Ho Chi Minh City, Vietnam.
Contact: Nguy?n H?u Chung, CEO
Tel.: (84-8) 829-3838
Fax: (84-8) 824-2901
Main products: value added processed meat for high end market

Royal-Vissan Canned Food Processing JVC
420 No Trang Long Street
Binh Thanh District
Ho Chi Minh City, Vietnam.
Tel.: (84-8) 843-3907 / 843-2366
Fax: (84-8) 843-2372
Contact: Mr. Van Duc Muoi, Director of planning and investment.
Tel.: (84) 090-382-5098
Main products: frozen, fresh, processed pork, beef, chicken

Tuyen Ky Food Co. Ltd.
189 Do Ngoc Thach
Ward 4, Dist. 11
Ho Chi Minh City, Vietnam
Contact: Mr. Sam Hong Ky, Owner or
Mr. Dinh Ngoc Tuan, Deputy Director of Sale
Tel.: (84) 090-372-5398;
Tel.: (84-8) 855-6586;
Fax: (84-8) 856-4902
Main products: dried and canned pork, beef.

Tuy Hoa Producing Agricultural And Fishery

1 Royal Danish Embassy - Danish Economic and Commercial Office (12/2001) The pig meat sector of Vietnam: An analysis of business opportunities for Danish Companies in Vietnam, Report of the Danish Embassy, p.9

2 Royal Danish Embassy, p. 31; "When compared to the rest of the world, meat prices in Vietnam are still relatively high and not competitive, e.g., exported pork is quoted at US$ 750 per ton in Red River Delta and USD $900-1000 in the south, while U.S. companies sell leaner export products for US$600-700, and the Chinese for US$650 per ton."

3 Equipment was primarily imported from northern European countries.

4 These figures were provided by industry executives as well as analysis of published reports and marketing materials from 1999 to the present day. It is standard practice for Vietnamese firms to under-report growth and expansion, and the tax and regulatory system has yet to enforce accounting standards.

5 Given the limited pool of investment capital and significant competition between processing firms whether provincial (state) food companies, private, joint venture or foreign firms, accessing subsidized (whether loan guarantees or low interest) state investment capital will be more difficult to justify as the downstream markets are competitive.

6 Royal Dutch Embassy, p.24

7 Numerous slaughterhouses did not permit research teams to enter slaughterhouse, citing hygiene reasons, but also due to protecting their company's real or perceived competitive advantage.

8 Executives at CP Thailand stated that products are shipped by air from HCMC to Hanoi to ensure

9 According to Mr. Vu Van Thang, Director of Anprex, Haiphong.

10 These firms are based in HCMC

11

12 Danish Embassy, p.24

13 Flow through or potential nameplate capacity is very limited in comparison with international standard equipment. The biggest of these firms may process upwards of 200 90kg hogs per day at best.

14 Dutch Embassy, p.23 & Mekong Research (2002?) The Livestock Sector, Opportunities for Canadian Suppliers of Breeding Animals and Genetic Materials, p.6

15 According to the Meat Process Report Newsletter, consumption in Taiwan is above 50 kg per year.

16 Danish Embassy, p. 22 & Mekong Research, p.6

17 ANZDEC (2000) Vietnam Agricultural Sector Program, Phase I Technical Report, ANZDEC Consultants, p. 18

18 Mekong Research, p.8

19 According to CP Livestock

20 Danish Embassy, p.32

Report prepared by Booth LeChay & Associates Ltd., Hanoi
Southeast Asia Division (PSE)
Department of Foreign Affairs and International Trade
125 Sussex Drive, Ottawa K1A 0G2
Fax: (613) 944-1604
E-mail: pse@dfait-maeci.gc.ca

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DFAIT's InfoExport Internet site (www.infoexport.gc.ca).

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