Trang 1 VIETNAM GENERAL CONFEDERATION OF LABOUR TON DUC THANG UNIVERSITY FACULTY OF BUSINESS ADMINISTRATION INTERNATIONAL BUSINESS STRATEGY REPORT YEAR 2020 VINAMILK BUSINESS STRATEGY In
LITERATURE REVIEW
Overall Information of Vinamilk
In recent years, the milk industry in Vietnam has experienced rapid growth, becoming a staple in the daily lives of its people due to its nutritional and energy-boosting properties A key player in this market is Vinamilk, officially known as the Vietnam Dairy Products Joint Stock Company, which was established on October 1, 2003, following the transformation of the State-owned Vietnam Dairy Company The company received its business registration certificate from the Department of Planning and Investment of Ho Chi Minh City on November 20, 2013.
• Company name: Vietnam Dairy Products Joint Stock Company (VINAMILK)
• Head office: Vinamilk Building - 10 Tan Trao - Tan Phu Ward - District 7 Ho Chi – Minh City
• Gmail: vinamilk@vinamilk.com.vn
• Website: https://vinamilk.com.vn
More specifically, in 2019, Vinamilk has a charter capital of 17,416,877,930,000 VND with a total revenue of 56,400,000,000,000 VND, an increase of 7.17% compared to
In 2018, Vinamilk reported impressive sales of 52.63 trillion VND, solidifying its position as the most preferred brand among consumers from 2013 to 2020 The company also achieved significant recognition, ranking first among the top 50 brands in 2019 and dominating the market in both liquid and powdered milk categories.
In 2020, Vinamilk was recognized as the leading brand in Vietnam and ranked among the top 1,000 Asian brands, with Forbes Vietnam estimating its brand value at an impressive $2.4 billion Additionally, Vinamilk has proudly held the title of "National Brand" for a decade, from 2010 to 2020.
Figure 0.3 Vinamilk achievement (Vietnam's most chosen FMCG brand owners and brands 2020, 2020)
Number of shares Ownership rate (%) Major shareholders (>=5%) 1.160.467.659 66.63%
Table 0.1 Statistics of Shareholders in 2019
History and development
Vinamilk, officially known as the Vietnam Dairy Products Joint Stock Company, was founded in 2003 and specializes in the production and sale of dairy products As reported by VNCS Research Center in 2018, Vinamilk is recognized as the largest dairy company in Vietnam, consistently reinforcing its leadership in the national dairy industry.
2003 - Equitised and officially became a joint stock company under the name of Vietnam Dairy Products JSC
2004 - Acquired Saigon Milk JSC (currently known as Saigon dairy factory)
2005 - Nghe An dairy factory was inaugurated and put into operation
- Vinamilk was officially listed on HOSE on 19/01/2006
- An Khang Clinic was opened in Ho Chi Minh city This was the first clinic managed information online in Vietnam
- In November, Vietnam Dairy Cow One-Member Ltd., was established
2007 - Lam Son dairy factory was inaugurated and put into operation
2008 - Tien Son dairy factory was inaugurated and put into operation
- Vinamilk contributed USD 10 million, as equivalent to 19.3% of Miraka Ltd.,’s share capital In 2015, Vinamilk raised its share capital in the subsidiary to 22.81%
- Vietnam beverage factory was inaugurated and put into operation
2012 - Da Nang dairy factory was inaugurated and put into operation
- Vietnam powdered milk factory and Vietnam dairy (Mega) factory were inaugurated and put into operation
- Thong Nhat Thanh Hoa Dairy Cow Ltd became a Vinamilk’s subsidiary with 96.11% of share capital owned by the Company In 2017, it became a wholly owned subsidiary of Vinamilk
- Vinamilk contributed 51% share capital to establish a joint venture, Angkor Dairy Products Co., Ltd., in Cambodia and owned 100% of stake in 2017
- Contributed 18% share capital of APIS JSC
- Vinamilk acquried 70% share capital of Driftwood Dairy Holdings Corporation in California, USA and officially owned 100% of stake in May 2016
- Cu Chi Raw Milk Center was going under operation
- Invested in sugar industry by acquiring 65% share capital of Vietnam Sugar JSC
- Acquired 25% share capital of Asia Coconut Processing JSC
2018 - Was the first company producing A2 milk products in Vietnam
- Invested a 51% share of Lao-Jagro Development Xiengkhuoang Co., Ltd
- Started construction Phase 1 of Laos’ 5,000-hectare Organic dairy farm with 24,000 head cows
- Doubled the capital at Driftwood Dairy Holding Corporation, from USD
- Completed the acquisition of 75% share capital of GTNFoods JSC, thus controlling Moc Chau Milk JSC whose total head cows are 25,000 ones
Table 0.2 The development stages of Vinamilk (since equitization - 2019)
By 2021, Vinamilk aims to maintain its leadership as the top dairy company in Vietnam and to rank among the top 30 largest dairy companies globally by revenue To accomplish these ambitious objectives, Vinamilk has established three key goals.
• Focusing mainly on dairy such as industries and related products
To enhance customer experience and meet diverse consumer preferences, it is essential to continue the research and development of innovative products This approach not only caters to varying tastes but also simplifies the process for customers to understand and engage with the product offerings.
• Prioritize exploitation of the domestic market
• For urban areas: focus on promoting high-end product segments
• Entering and expanding market in rural areas with popular product segment
• Build and develop a nationwide distribution system to become more widespread and stronger and increase market share
• Becoming the most valuable dairy company in the Southeast Asia
• Ready for M&A activities and expand cooperative relationships with partners
• Look for M&A opportunities with dairy companies around the world
• Continue to penetrate new export markets with the strategy of converting the traditional export model to other forms
Vinamilk boasts a diverse range of products and an extensive distribution network across all 64 provinces in Vietnam, reinforcing its reputation for quality and prestige The company not only focuses on major urban areas but also enhances its presence in rural communities, ensuring that most communes have access to Vinamilk agents and grocery stores featuring its products This comprehensive distribution strategy has effectively boosted consumer awareness and market share for Vinamilk.
• Coverage at most supermarkets and convenience stores
• 430 chain stores "Vietnamese dream milk"
• Building e-commerce channels to reach customers more easily
Organizational structure
1.3.1 Operation model in the Vietnamese market
Figure 0.4 Operation model of Vinamilk
Branches and subordinate units in Vietnam
13 dairy factories in North, Central and South
03 branches of sales offices in Hanoi, Da Nang and Can Tho
02 logistics enterprises in Hanoi and Ho Chi Minh City
Raw fresh milk center Cu Chi
Figure 0.5 Organizational and managerial hierarchy
Currently, Vinamilk is the leading nutrition group in Vietnam Owning a system of
Vinamilk operates 12 GLOBAL G.A.P certified farms and 13 state-of-the-art factories, offering a diverse portfolio that includes liquid milk, baby and adult formulas, nutritional powders, yogurt, drinking yogurt, energy drinks, soft drinks, condensed milk, and ice cream This extensive range of products caters to the varied needs of consumers in the Vietnamese market.
1.3.4 Vision, mission, and core values
"To become the leading Vietnam beliefs about nutrition products and the health service of human life"