Productivity challenge
The nation’s pork production ranks sixth on a global scale, but the industry on the whole suffers incredulously from lack of productivity with some experts estimating it is half that of the EU.
Lower productivity stems from a mix of key factors – inferior genetics, extensive disease, inadequate biosecurity, poor feed conversion ratios and fertility/sow management, compounded by inefficient slaughtering and processing operations.
Changing profile
With an estimated two thirds of the population classified as farmers most hogs in Vietnam have been bred and finished in small herd sizes of one to five sows and less than 20 finishers, and most are slaughtered at small scale butchers' locations, oftentimes a home.
This unsophisticated aspect of the nation’s swine industry profile explains, in large part, the reason for the industry’s unacceptably low productivity. However, the profile is rapidly changing.
The economy of Vietnam is growing, largely on the back of increased foreign sector manufacturing, which is manifesting itself in a mass migration of people from the rural to larger metropolitan areas of the country.
As a corollary of the swift rate of urbanization, the associated increasing per capita disposable incomes of households is affecting consumer spending habits, resulting in higher pork consumption levels.
The nation’s swine industry is concentrated in two key regions – the Mekong Delta (about 15% of hogs and 18% of pork production) in the south and the Red River Delta (about 25% of the hogs and 33% of pork produced) in the north.
Seductive promise of the Vietnam pork segment
Estimates have put the number of modern or intensified commercial hog farms at roughly 10,000 in Vietnam, providing about 15% of the nation’s total requirements for pork protein.
A typical model for such farms is based on the integration with feed mills with Thailand based Charoen Pokphand Foods (CPF) leading the way in the use of this concept. San Miguel (Philippines) and Japfa (Indonesia) are two other integrators that have a presence.
Growing pork consumption
The average consumption of pork per capita is reportedly 20.1 kg per capita per annum but this disguises a wide range of behaviour having to do with city dwellers higher rates of consumption.
Experts generally agree that per capita consumption of pork is higher for city dwellers that the rural population with, at least one report placing consumption in Ho Chi Minh City, for example, at 25 kg per capita.
Still other reports place the figure for consumption closer to 35 kg per capita per annum.
There is a lot of confusion with per capita pork consumption figures in Vietnam, but whatever the figures, there is little doubt amongst the experts that Vietnam farmers will have to produce more pork – or the nation import it – in the future in order to meet the growing appetite for pork protein.
Experts and the World Bank expect that the increased pork consumption will continue to grow by nearly 8% per annum over the next few years, providing a strong incentive for investment in the swine industry of Vietnam.
