Vietnam Dairy Products, better known as Vinamilk, in March spent 300 billion dong ($13.4 million) to open its seventh farm in the central province of Ha Tinh. The farm, which complies with GlobalGAP, a global standard for agriculture practice, can raise 3,000 cows a year. It recently imported from the U.S. for the first time cows that can produce more milk.
Vinamilk has been trying to obtain certification at its farms since July 2014. It now plans to obtain the certification at all nine of its farms, including the ones to be added in Thanh Hoa and Tay Ninh provinces by the end of the year. Acquiring international standards will make it easier for the company to export products, and benefit from the expansion of the Trans-Pacific Partnership and other free trade pacts.
This spring, Vietnam Meat Industries, the country's largest meat company known as Vissan, signed strategic partnership with Masan Group, a major Vietnamese private-sector food processor to beef up its hygiene management for livestock feed. Since mid-April, Vissan, at 455 butchers around Ho Chi Minh City, has sold only pork in compliance with Vietnamese Good Agricultural Practices, or VietGAP, a food safety certification based on the GlobalGAP standard.
The project is expected to expand into the northern parts of the country. Masan's subsidiary has a high level of hygiene management technology for livestock feed.
Vissan will also team up with VietinBank and other companies in building two plants for organic foods and other safety-conscious products over the next five years.
In March 2015, property developer Vingroup entered the "VinEco" business to supply organic agricultural products. The real estate conglomerate will spend 2 trillion dong to operate farms in Ho Chi Minh City and Dong Nai Province, as well as in the northern provinces of Vinh Phuc and Ha Nam.
VinEco products sold better than expected at its 700 or so supermarkets and convenient stores thanks to growing consumer interest in food safety. The company decided it has to expand VinEco business, as there is a plan to more than double the number of stores by the end of the year.
With Aeon and other Japanese retailers entering the market, a growing number of Vietnamese retailers have started labeling foods to indicate their origins and the pesticides used. Previously, most Vietnamese consumers purchased food in traditional markets with an emphasis on price. With the growing ranks of health-conscious middle class consumers, however, failing to take food safety measures could seriously impact sales.
The Vietnamese government has been alarmed by reports of incidents endangering food safety. A national conference, convened by Prime Minister Nguyen Xuan Phuc in April, was attended by about 60 ministers and high-ranking officials of the local People's Committees to discuss problems such as contamination by banned chemicals and smuggling of food whose origin had been falsified.