FrieslandCampina’s sustainable growth in VN
Arnoud van den Berg - REPORTED BY THANH TRUC
Since it came to Vietnam 20 years ago, FrieslandCampina has remained one of the country’s leading dairy companies. The Saigon Times Daily spoke with Arnoud van den Berg, managing director of FrieslandCampina Vietnam, about the company’s business operations in the country and prospects for the Vietnamese dairy industry in the integration process.
What do you consider are the achievements of FrieslandCampina Vietnam in the last 20 years?
- Arnoud van den Berg: Our great achievement in the past 20 years has been to provide nutrition to many people in Vietnam. We sell more than a billion packs of milk every year.
The Vietnamese consumers have embraced our brands, and we can provide the right nutrition to many generations of Vietnamese.
From a very small company with one factory here, we have been able to expand three times in Binh Duong Province. Then we opened a factory Ha Nam Province in 2008. With that our total capacity right now is four times bigger.
I think there are many reasons for our success. There are some organizational reasons but it all has to do with the high-quality products we bring to Vietnam. We are very much an international company but we are locally based. We are working with a local team, and we have local products produced in Vietnam from milk from Vietnamese farms.
We have an ever growing number of farmers who co-operate with us. Currently 3,500 farmers supply milk to us on a daily basis. And that has grown from 300 liters a day to about 300 tons now. And it has not only grown in volume but also in quality. We have had very strict quality standards from the start, and have been able to increase the quality of milk brought to us by helping farmers with farming techniques we bring from Holland and other countries.
We have the “dairy development program” to help farmers improve quality and efficiency on the farm.
How do you see the potential of the Vietnamese dairy industry? Now that the ASEAN Economic Community has been established and the Trans-Pacific Partnership (TPP) signed, what are the likely advantages and challenges for the industry from Vietnam’s integration?
- I believe Vietnam’s dairy industry has a bright future. Dairy consumption will grow if GDP per capita grows. And Vietnam is growing its GDP per capita. If you look at the dairy consumption per capita, it is still quite low in Vietnam. If you compare with regional countries like Malaysia or South Korea, there is a possibility of growing four or five times if the GDP per capita grows.
We think one important development from TPP may be to get the milk pricing in Vietnam in line with the world market. What you currently see is milk prices, raw milk prices in Vietnam are 40-50% higher than in some markets such as Australia and New Zealand. There will always be a difference but the gap is quite big. So there is a big task for the dairy industry and the Government together with farmers to improve efficiency on the farm so that the price can be more competitive.
Do you have plans to open more plants in Vietnam?
- Currently, we are satisfied with the capacity we have. We have a factory in each of Binh Duong and Ha Nam that we have optimized and still have a lot of room to grow. So we can cater for growth in the next several years with what we have. Beyond that, if you look at another 20 years from now, I am sure we will need more capacity.
We have continuous improvement programs in our company with respect to quality, safety and efficiency because every year you have to be better than the year before since your competitors are as well.
So we have a world-class operations management program that is going to review all our plans to see where we can do better, what we can learn from what we do in Germany or in Indonesia or in Russia, what we can bring here.
We continue our dairy development program supporting the farmers with the best practices in the farms. Those are areas we focus on.
What is your advice if Vietnam wants to have a thriving dairy industry?
- I think the Vietnamese Government is doing a lot already to help farmers be competitive. In Ha Nam, we have set up a sustainable dairy zone, which is a partnership between Ha Nam’s government and the Dutch government within the Facility for Sustainable Entrepreneurship and Food Security for the period from 2014 to 2018.
I think it is important to see dairy farming as part of an open economy so that we can foster a healthy development environment for the dairy industry in the country. We need to make sure there is not too little or too much milk, and that only works in an open system where we can directly contact farmers as we have been doing in the past.
Can you tell us something about your company’s corporate social responsibility activities?
- The highlight of FrieslandCampina Vietnam’s exceptional CSR commitment is the DDD program. The Đèn Đom Đóm program has provided 25,000 scholarships for students and built 20 schools. Since its inception in 2002, the program has supported the construction and renovation of schools and provided scholarships to ensure that children are able to pursue their education without causing financial distress for their families.
Besides, inspired by the need to work towards improving the nutritional status of children, we have carried out the “Drink, Move, Be Strong” campaign under the Jr. NBA partnership to allow children across the country to adopt an active, healthy and nutritious lifestyle through play, sports and proper nutrition. We believe in the goodness of milk and basketball as a vehicle to promote a healthy lifestyle and help develop the future generations of Vietnam.
Reported by Thanh Truc