Foreign invested firms have been pouring money into and expanding animalfeed production, according to the Vietnam Animal Feed Association.
The domestic animal feed market is expected to see demand of 18-20 million tonnes by 2015 and 25-26 million tonnes by 2020.
US-invested Cargill Vietnam in March added two factories to itsnine existing feed production facilities, increasing total capacity to 1million tonnes per year, accounting for 10 percent of the local market.
"Recent investment in animal nutrition is a sign of ourcontinued commitment to fostering the economic growth of Vietnam ,"said Cargill CEO Greg Page.
Last year, CP, a Chineseanimal feed producer operating in Vietnam , announced it would buildsix additional factories by 2014 while another Chinese firm, New Hope, confirmed it would construct six more.
The associationsaid foreign investment increase in animal feed production was due tohigh domestic demand as well as advantages in capital and tax during theproduction process.
Meanwhile, local animal feedproducers have faced many challenges, including high interest rates onloans and low competitiveness.
Association Chairman Le Ba Lich admitted supporting capital to poor local producers is yet to become reality.
Lich suggested the Government better regulate the animal feed market,encouraging foreign invested firms to produce mixed feed materials usingadvanced technology.
The state should offer investmentincentives to local feed producers such as capital and warehousefacilities at ports, Lich added.
Vietnam currently has59 foreign-invested firms and joint ventures which hold 70 percent ofthe domestic market share while 180 local firms retain the remaining 30percent.
Local firms face the risk of losing their marketshare to foreign rivals due to increased foreign investment into thefeed industry, Lich noted.-VNA