Enterprises (companies) internal struggle to keep market share, but the effort also remove the salt tank. Not just being manipulated by foreign companies have factories in Vietnam that feed prices in Vietnam are higher than in the region of 15-20%, making the cost of products has always been the rise .
According to the Ministry of Agriculture and Rural Development, the import value of commodity groups feed for cattle, poultry and overall raw material first 5 months of 2013 reached $ 1.15 billion, up 40.6% compared same period last year. Unpredictable in materials, plus the cost of import duties, shipping, warehousing ... made feed prices in Vietnam are much higher than in the region.
Le Ba Lich - Chairman of Association Feed - said: The business is very difficult, many small and medium enterprises went bankrupt. Currently there are 234 DN animal feed, of which only 194 establishments, enterprises are operating, has 40 factories mainly domestic capital has stopped production, or business navigation. A potential market with average annual growth of 13-15% but are enterprises with foreign investment "acquirer", estimated to account for about 56% market share in animal feed.
The difficult competitive domestic feed enterprises not only because raw material prices and high input costs, but also because not much working capital, sales policy less flexible as FIEs. If FDI companies spend a lot of "commissions" to agents, with the bonus system according to sales, farmers have to buy food ... the internal DN can only spend a tiny fraction should not be competitive.
Pham Duc Binh - Chairman of Management Board Co. Thanh Binh (Dong Nai) - expressed Sector cattle feed are problems is not to sell but to thank for pigs! Many companies formed MLM, first sold to dealers a large volume, highly prized; subordinate agents to be shared incentives to promote consumption of the product, resulting in farmers must buy food at high prices.
Managed in difficult position
Not yet DN inner can withstand the fierce competition of the feed market as only 15 FDI enterprises and joint ventures but has owned up to 44 factories, produce over 7.15 million tons compound feed equivalent. Some internal DN names like: Dabaco, Proconco, Hong Ha, Cam VINA, Thanh Binh ... are gong to keep and expand the market with an output of about 3.13 million tons / year, accounting for 24% market share.
Each business has its own way but linked tripartite model as Thanh Binh Company is doing well as a quite effective form. Accordingly, farmers will buy bran companies introduced into the Agricultural Bank branch in Dong Nai to borrow at low interest rates. The Bank will disburse each drive on the needs of farmers, businesses direct sales to farmers will be 5% reduction in costs is not mediated by ...
These factors will help to lower product prices than the market price, both farmers and businesses are not investing loss. Currently, the company's food prices are always lower than of foreign enterprises from 15-30%.
This is just one of many ways businesses are not viable in the market competition. In the long term, the policies for development of new feed is an effective solution to this sector stability and development.
Many companies propose to remove VAT rate of 5% for animal feed for farmers to directly bear this tax.