Vinamilk Moc Chau Milk

- The appear of strong - NATURAL DISASTERS AND

competitors WEATHER RISKS
Moc Chau is one of the lands
•The growth of new milk brands favored by nature, with a
and imported milk increased. temperate climate suitable for
agricultural development,
•Competitors such as TH True especially the development of
Milk, Nestle, Dutch Lady, Abbott, dairy cows, however, the
and other foreign brands are phenomenon of change The
creating fierce competitive climate causes increasingly harsh
pressure in the industry. weather, which also partly affects
livestock and crops here.
•Potential risks such as reducing - RISKS ABOUT PRODUCT
the diversity of dairy products, QUALITY Dairy products bring
difficulty maintaining loyal good health to consumers.
customers, losing dairy market Therefore, product quality is
shares to competitors... a vital factor that businesses
always maintain and commit
- Ability to supply input to the highest responsibility
materials for consumers. To ensure
product quality at the
•Dependence on imported raw highest level, the Company
materials creates pressure because always uses advanced
quality and supply stability are not production technologies in
guaranteed. the world, applies modern
production processes and the
The psychology of favoring foreign strictest quality control. The
products company has achieved ISO
2000 Certificate for Food
•The "foreign-loving" mentality of Safety Management System.
some consumers is still strong, The goal is to minimize
affecting the priority in choosing possible product quality
imported milk. risks.
- COMPETITIVE RISKS IN THE
•Vinamilk needs to strengthen its INDUSTRY The company is
promotional campaign to affirm the under great competitive
nutritional value and quality of its pressure from domestic dairy
products, confronting the companies and international
preference for foreign products. brands. Especially when
bilateral and multilateral
•90 Vinamilk's export profits come trade agreements that have
from exporting to the Iraqi market. taken effect or will take
effect in the near future will
- According to Euromonitor also make imported dairy
research, powdered milk for products have lower prices
children in Vietnam faces and they will have a great
many difficulties in 2023 due competitive advantage.
to economic difficulties and than. The EVFTA Agreement
takes effect from August 1,
decreasing birth rate. 2020, a "wave" of milk from
Powdered milk for children is the EU will flood into
not yet considered an Vietnam, causing great
essential product, and price, pressure on domestic
especially of formula milk businesses. Although the EU
products, can be a significant eliminated all tariffs on
barrier for low-income Vietnamese dairy products,
consumers. Therefore, more Vietnamese dairy businesses
cost-effective alternatives, receive almost no benefits
such as breast milk or because the EU has not yet
homemade baby foods, can licensed the import of milk
be chosen by consumers originating from Vietnam.
during this difficult period. The Company's current scale
- Liquid milk products in 2023 is still relatively small, so
will also be affected by competitive pressure will be
inflation and increasing living huge. However, the
costs. Many Vietnamese Company has a plan to
consumers have not yet invest in building fresh milk
formed the habit of raw material areas in the
consuming milk every day, country such as investing in
while another group of new high-tech dairy farms
consumers prefer alternative and investing in effective
drinks such as plant milk and brand development to create
nut milk. Plant-based milk is strength and resilience for
benefiting from trends in the Company. company in
health, wellness and the short and long term.
sustainable lifestyles. - -RISKS OF INPUT MATERIALS
The Company's main input
materials are fresh milk from
the Company's dairy farms
and fresh milk purchased
from dairy farmers.
Therefore, a risk may arise
that the cost of input
materials may increase due
to fluctuations in economic
factors and inflation in
general or because domestic
fresh milk purchasing
sources cannot keep up with
demand. Market growth
leads to a shortage of input
materials for production. To
reduce these risks, the
Company has a plan to
invest in new dairy farms and
support farmers to develop
cow herds, improve milk
productivity and control costs
to lower milk prices. This is
always considered the
Company's long-term
strategy.
- -RISKS ABOUT CHANGING
CONSUMPTION TRENDS
Firstly, the market is
increasing the consumption
of plant milk. It is known
that soy milk and barley milk
are considered the best
alternatives to cow's milk,
thanks to their high protein
content. Second, spending
on fast-moving consumer
goods of Vietnamese
consumers in general began
to level off when basic needs
were met. Instead,
consumers often switch to
spending on hobbies to
satisfy higher needs (such as
eating/drinking out) and
spending on non-essential
items with the general
purpose of improving quality.
quantity of life. While milk
demand in the urban market
seems to be saturated,
consumption in the rural
market fluctuates greatly due
to increased dependence on
agricultural commodity
prices, depending on the
level of disposable income in
this market. spending norms
for fast-moving consumer
products. Overall
assessment, SSI Research
estimates that the above
structural trends will
continue, helping to further
impact the Vietnamese dairy
industry. Increasingly
consumed products include
fresh milk, yogurt (especially
drinking yogurt) and high
value-added products such
as cheese, while demand for
standard formula milk and
condensed milk increases.
may continue to be gloomy.
With risks in changing
consumer trends, the
Company's leadership has
flexibly responded,
conducted systematic
market research and built
product diversification
strategies to suit needs.