· To mobilize all resources from various economic sectors in a bid to develop the milk industry to cater to domestic demands and accelerate milk exports.

· To improve the competitive capacity of the milk industry and apply advanced technologies and techniques; to develop the industry in an open direction and flexible manner with diversified milk products to meet various market demands and the requirements of integration with the international economy.

· To step up development of dairy herd with high economic efficiency and competitive edge, setting up areas for concentrated dairy cattle husbandry by means of wide application of technical advances and new high-yield and -quality breeds. Focus shall be made on research studies to --select-- core dairy herds of the industry. To invest in plants and works that specialize in storage of feeds (covering up grass and auxiliary feeds) and processing refined feeds for dairy cattle.

· The milk processing industry is to develop in the direction of raising a market share of domestically produced fresh milk and reducing a share of imported powder milk. Milk manufacturers must prepare their respective investment programs for dairy herd development.

·  Overall goal

-  The milk industry shall be gradually built and develop in a synchronized manner from production of raw materials to processing of end products, meeting an estimated domestic consumption per capita of 8 kilograms a year in 2015 and 20 kilograms a year in 2020 and aiming at exports.

-  The construction of milk processing plants must be closely linked with dairy cattle husbandry areas so that 20% and 40% of domestic demand for raw milk shall be met by 2015 and 2020, respectively.

· Specific objectives

Vietnam’s annual milk production in the 2015-2020 period is projected to increase by 5-6%, (See table 1)
 

Development of Vietnam’s dairy herd from now up to 2020 in order to partly replace imported raw materials is a crucial and pressing task. Domestic fresh milk production in 2015 is expected to exceed 140,000 metric tons (MT) in order to substitute for around 20% of imported raw materials before totaling more than 300,000 MT to meet about 40% of raw materials demand in 2020. Vietnam’s fresh milk output is projected at 1 million MT after 2020 and to cater to 50% of raw fresh milk needs by 2020.

                                                                                                                                                                                      Unit: Heads

 

By 2015 and 2020, there should be 128 and 254 milk procurement stations, respectively. Total investment capital for setting up the procurement stations is expected at VND 152.8 billion. Grasslands are seen at 15,600 hectares in 2015 before expanding to 30,200 hectares in 2020

Building on the current capacity of 547.3 million liters of milk (processed fresh milk basis) a year and increasing year-on-year consumption, it is anticipated that further investment is needed to produce 120 liters of processed fresh milk in 2015 and 248 liters in 2020.

Investment shall be made in building a milk packaging manufacturing and label printing lines to cover 50% of overall capacity. The annual manufacturing capacity is projected at 75,000,000 sq. meters in the first phase, and 150,000,000 sq. meters in the second phase. Meanwhile, investment capital in the first and second phases is seen at US$ 5 million and US$ 3 million, respectively.

                                                                                                                                                       Values in VND billion

Funding from budget and state programs for the development of dairy herd regions is projected to account for around 10%.

Credit lines used for building milk processing plants and concentrated raw material resource regions are seen to represent 50%.

Investment capital from economic sectors and businesses is forecast at 40%.

Pursuant to Decision No. 167/2010/QD-TTg by the Prime Minister on a number of measures and policies to develop Vietnam’s dairy herd , the milk industry must be arranged in connection with raw material resource regions. In particular, processing plants shall be concentrated in dairy husbandry areas with big markets, with each plant being based at every distance of 100-150 kilometers. Small processing plants are expected to be located in regions with limited dairy herd and small market, operating at a capacity of about 4,000 -5,000 MT a year with main products being pasteurized milk and York hurt for domestic use and providing raw milk to large processing plants. Along with other popular milk products of large-scale processing plants, soy milk will be launched in regions which are suitable for soybean growing, like provinces in the west of Southern Vietnam and in the Red River Delta.

Businesses are required to register their trademarks, designs and product’s quality. Propaganda should be stepped up so that people can be aware of the benefit of milk drinking in improving health and physical status, as well as maintaining and renovating race. To carry out the school milk program.

To coordinate with the Ministry of Industry and Trade and Vietnam’s foreign trade offices in disseminating information, promoting exports of dairy products and expand market shares.

2.1. On production capacity:  Further investment shall be made in expansion and building of new milk plants to achieve 228 litters a year between 2015 and 2020.

Investment shall be made in building of packaging plants for the milk industry to cater to changing designs of milk products and l to limit imports of items that are domestically made.

2.2. On production allocation: In dairy cattle husbandry centers, such as the east of Southern Vietnam, the north of Central Vietnam and the south of Southern Vietnam, investment shall be focused on a number of large-scale manufacturers to utilize local raw materials.

Small-scale milk plants shall be set up with a designed capacity of 4 to 5 million liters a year in areas with small-sized dairy herds in mountainous midland provinces and some provinces in the west of Southern Vietnam.

3. On scientific research and technology transfer

To encourage businesses to study on new products and to apply latest technology, particularly to conduct research on use of domestically made raw materials as a replacement for imported ones.

To step up activities of scientific research institutions, establishing a firm link between research and application of sciences into production and business.

To further invest and upgrade scientific research and training institutions in order to improve quality of researches on breeds, farming techniques, veterinary science, feeds and transfer of technology to farmers.

Relationship between farmers, businesses, the State and scientists shall be built on the basis of ensuring their respective interests and responsibilities via long-term contracts.

A review of the existing land fund shall be conducted, so as to set aside a pot of land for guiding farmers on development of grasslands for dairy cattle husbandry.

Raw material resource regions Development Fund shall be founded by including 2– 5% of the value of raw materials imported for milk production into the production cost.

To draw up synchronized programs and plans, which are of strategic significance to training staff and skilled workers.

To finance part of on-spot personnel training cost. To combine specific-purpose training courses at domestic universities and have policy on recruiting graduates in line with their specialty and sending personnel for training in foreign countries with a long tradition of milk production.

Budget spending will be used for building breeding centers and centers for research on sperm production, research institutes, and training institutions to provide personnel to the milk industry.

Businesses’ funds shall be concentrated on investment in development of processing capacity and providing assistance capital to farmers as well as on investment in building of milk procurement stations at localities and building a contingent of raw materials developers.

To make best use of social funds, such as credit lines, state programs, sales of shares, stocks, foreign direct investment capital, official direct assistance capital for investment in milk processing projects as well as investment projects for development of raw materials resource regions.

1. The Ministry of Industry and Trade shall be responsible for coordinating with the Ministry of Agriculture and Rural Development, the People’s Committee of cities and centrally run provinces in directing the development of milk industry according to planning.

2. The MARD shall bear main responsibility to develop concentrated raw material resource regions via the system of agricultural extension, dairy cattle breeds and techniques for raising dairy cattle.

3. The Ministry of Planning and Investment, the Ministry of Science and Technology, the Ministry of Natural Resources and Environment, the State Bank of Vietnam, and Development Bank of Vietnam shall, subject to their respective functions, collaborate with the Ministry of Industry and Trade in providing assistance to businesses, provinces and cities to carry out the ratified plan.

4. The People’s Committee of provinces and centrally run cities shall use the system of agricultural and industrial extension and introduce policies to encourage the development of milk processing plants in connection with local raw material resource regions. Also, they shall arrange the preparation of detailed plans, and allocation of land for developing concentrated raw material resource regions and building local milk processing plants.