Discussing opportunities for recovering livestock industry after pandemic
(VAN) Chairman of Hung Nhon Group Vu Manh Hung shared his opinion on the opportunities for recovering livestock industry in the year-end months.

With the development of the livestock industry, the animal feed sector of Vietnam has experienced a growth of 13-15% annually during ten consecutive years.
In 2020, the total production of Vietnam’s industrial animal feed reached 20.3 million tons, taking the country to the top ten in the world and number one in the Southeast Asia in terms of producing industrial animal feed, well above Thailand and Indonesia.

Although the livestock husbandry is a key industry in Vietnam with an impressive growth of 5-6% annually its contribution to the total export value is still limited.
In 2020, the livestock industry contributed less than US$1 billion to the total export turnover of agricultural, forestry and fishery products of over 40 billion USD. In 2021, it continues to face challenges due to Covid-19.
Chairman of Hung Nhon Group Vu Manh Hung had a talk with Vietnamese Agriculture News about the opportunities for recovering the Vietnam livestock industry in the year-end months as well as the investment prospects to reach out the international market.
Supply of many animal products may slump by the year end
Amid the Covid-19 pandemic, the prices of many animal products, especially poultry have slumped. The whole production chain of the livestock industry has been broken. What are your assessments of the prospects of a market recovery for animal products in the year-end months of 2021. Is there a meat shortage?

Currently, statistics and assessments from livestock farms nationwide unveiled that the biggest barrier is the consumption as a huge quantity of animal products is still unsaleable. It’s because most slaughter houses are in the center of Ho Chi Minh City, crowded areas and “red zones” where are put under restrictions and social distancing measures.
On the other hand, the demand for animal products, especially egg and meat has slump down as many companies have been shut down. Meanwhile transporting animals from farms to slaughter houses have faced a lot of difficulties.
With the situation, it’s expected that there is likely a food shortage in the year end and by the Lunar New Year because most enterprises are operating at indifferent levels. Moreover the companies are also facing with labor shortages as they resume the operations. A large number of workers have left big cities for their hometowns to avoid Covid-19. All these factors are believed to affect livestock market.
In my opinion, to remove the hurdles we have to focus on “releasing” the backlog of animals at farms. Secondly, we have to quickly stabilize production and labor forces, developing detailed plans and scenarios for the year end market.

How is your company preparing to recover production in the year-end months when the Covid-19 pandemic is under control?
We understand the pandemic will continue to be complex in the near future so we have prepared production plans to adapt to the general situation very early.
In which we have been focusing on the implementation of “three-on-the-spot”, strictly controlling all input activities. We have also provided workers meals, food in the spirit of “self-sufficiency” to limit their going to the market places where are at high-risk of the disease infections.
We also carry out the vaccination; preparing accommodation, quarantine areas, encouraging workers to keep on working.
As a result, 95% of Hung Nhon Group’s employees have kept working according to “three-on-the-spot” method in the last four months. Although we have to pay additional costs it’s primarily worth because we have maintained a “green zone” status which means it’s safe for our operation.
Improving competitive advantages to reach out the international market
There are many opinions that with a population of 100 million, Vietnam was saturated with the livestock products. However we have to reach out to the global market, willy-nilly. What do you think about that?

Five years ago we predicted and calculated that the domestic market would be saturated. It was because many livestock enterprises rushed to the Vietnamese market, leading to an abundance of animal products while the demand was limited.
Currently, the domestic market is saturated but for long-term strategy and amid the disruption of the global economy, if we focus on stabilizing production and improving the quality of animal products it will be the most effective way.
The more saturated the market is the fiercer the competition will be. Therefore the enterprises need to take firm steps, focusing on the technical elements, complying with the strictest standards.
Bringing animal products to the world is necessary as the domestic demand is still limited. Hence, the enterprises need to develop specific and methodical strategies to access the global market.
In this period we should pay attention to the technical barriers, upgrading production system, putting the advanced technique into use, following the highest standards to promptly respond to changes in the market.

Specialization in animal production
Currently, the agricultural sector is very interested in the formation of cooperative linkage according to commodity chain including pushing the connection between enterprises and cooperatives and farmers. What did Hung Nhon Group do to expand this linkage?
What Hung Nhon Group did has been benefiting farmers a lot. However it takes time for farmers and cooperatives to operate smoothly and methodically like a company.
The biggest challenge is how to make farmers and cooperatives operate properly in the chain and benefit from that chain. It takes drastic and synchronous measures from the ministries, agencies and the People’s Committee of provinces and cities.
Most of our cooperatives are now at small-scale and scattered. Hung Nhon Group will train them so that they can increase their contribution to the linkage chains. It’s a difficult task but I’m sure we can do if we try our best.

Hung Nhon Group is now specialized in animal production. Do you think it will reduce the profit margin of your company? Could you share with us why Hung Nhon have chosen this direction instead of involving in all steps in breeding?
In my opinion, if we choose to take part in the development chain we should focus on what are our strengths. When the linkage becomes strong every chain will be inseparably linked and they will pull each other to move constantly. We should focus on one field that we are already good at. When the enterprises operate in a linkage chain they will promote what are their strengths at maximum.
Amid the complex situation of the Covid-19 outbreak if we go alone it will be hard to recover production because there are many issues like financial sources, market and human resources we have to deal with.
Therefore Hung Nhon Group has chosen to work with other enterprises to create a linkage chain which will help Hung Nhon stand firm and go further.
Thank you!