Vietnam Dairy Products JSC (Vinamilk) is optimistic about its future development as the sector still has room to grow, the company’s general director Mai Kieu Lien told an investor meeting on November 6.(Photo: bizlive.vn) HCM City (VNS/VNA) - Vietnam DairyProducts JSC (Vinamilk) is optimistic about its future development as thesector still has room to grow, the company’s general director Mai Kieu Lientold an investor meeting on November 6.
“The dairy market has not reached equilibriumyet,” Lien said. “There will be slower growth in the short term, but the marketis still developing.”
She said the company’s profit margin is 22 percent,above the sector average of 18 to 20 percent, thanks to its large-scaleproduction, big market share and stable investment policy.
“Winning a greater market share would solve allproblems,” she said. It would raise profit margins, but competition would alsogrow as more players enter the profitable sector.
Lien said Vinamilk would try to win more of thedomestic market – of which it currents holds 58 to 59 percent – to compete withlocal and foreign companies.
In the first nine months of the year, Vinamilk’smarket share grew by 0.8 percent, meaning the company is well on its way tomeeting its goal of one percent market share growth this year.
The company has reported its combined thirdquarter revenue rose 3.3 percent over the same period last year to 13.73trillion VND (610.4 million USD), but its pre-tax profit for the last quarterfell 5.9 percent year on year to 3 trillion VND.
The profit reduction was due to higher sellingcosts, which increased by 14 percent to 3.41 trillion VND.
In the first nine months of the year, Vinamilkrecorded 39.5 trillion VND in revenue, a yearly increase of two percent, and 9.37trillion VND in pre-tax profit, down 7.8 percent from last year.
The company estimated its profit in 2018 wouldbe equal to last year’s figure of nearly 10.3 trillion VND, boosted by lowerinput material and operation costs.
The lower numbers for 2018 are due to a declinein market demand for dairy products, not only in Vietam, but also around theworld.
Lien said that a decrease in the size of thedistribution network affected Vinamilk’s performance.
Seven to eight years ago, the company sold 80-90percent of its products via distributors, she said. But now, the rate hadfallen to just 10-20 percent.
The company now focuses more on retail channels,which account for 80-90 percent of its sales, according to Lien.
Vinamilk would not curb its prices, Lien said,warning that such an act would pull average market prices lower and dampencorporate earning. She also said it could lead to lower spending onadvertising, marketing and promotion.
The company would try to keep its stockpilesstable and increase its sales volume, she said.
Vinamilk has recorded good growth rates inexports to overseas markets, especially within Southeast Asia.
Revenues in Cambodia jumped 121 percent overlast year in the first nine months of the year and profits grew sevenfold.
The company has plans to double its investmentin Cambodia in five years from the current 25 million USD.
ASEAN is the main focus of Vinamilk, and thecompany’s revenue from selling products in the region is expected to increase15 percent each year.-VNS/VNA
“The dairy market has not reached equilibriumyet,” Lien said. “There will be slower growth in the short term, but the marketis still developing.”
She said the company’s profit margin is 22 percent,above the sector average of 18 to 20 percent, thanks to its large-scaleproduction, big market share and stable investment policy.
“Winning a greater market share would solve allproblems,” she said. It would raise profit margins, but competition would alsogrow as more players enter the profitable sector.
Lien said Vinamilk would try to win more of thedomestic market – of which it currents holds 58 to 59 percent – to compete withlocal and foreign companies.
In the first nine months of the year, Vinamilk’smarket share grew by 0.8 percent, meaning the company is well on its way tomeeting its goal of one percent market share growth this year.
The company has reported its combined thirdquarter revenue rose 3.3 percent over the same period last year to 13.73trillion VND (610.4 million USD), but its pre-tax profit for the last quarterfell 5.9 percent year on year to 3 trillion VND.
The profit reduction was due to higher sellingcosts, which increased by 14 percent to 3.41 trillion VND.
In the first nine months of the year, Vinamilkrecorded 39.5 trillion VND in revenue, a yearly increase of two percent, and 9.37trillion VND in pre-tax profit, down 7.8 percent from last year.
The company estimated its profit in 2018 wouldbe equal to last year’s figure of nearly 10.3 trillion VND, boosted by lowerinput material and operation costs.
The lower numbers for 2018 are due to a declinein market demand for dairy products, not only in Vietam, but also around theworld.
Lien said that a decrease in the size of thedistribution network affected Vinamilk’s performance.
Seven to eight years ago, the company sold 80-90percent of its products via distributors, she said. But now, the rate hadfallen to just 10-20 percent.
The company now focuses more on retail channels,which account for 80-90 percent of its sales, according to Lien.
Vinamilk would not curb its prices, Lien said,warning that such an act would pull average market prices lower and dampencorporate earning. She also said it could lead to lower spending onadvertising, marketing and promotion.
The company would try to keep its stockpilesstable and increase its sales volume, she said.
Vinamilk has recorded good growth rates inexports to overseas markets, especially within Southeast Asia.
Revenues in Cambodia jumped 121 percent overlast year in the first nine months of the year and profits grew sevenfold.
The company has plans to double its investmentin Cambodia in five years from the current 25 million USD.
ASEAN is the main focus of Vinamilk, and thecompany’s revenue from selling products in the region is expected to increase15 percent each year.-VNS/VNA
VNA
