Economic slowdown in Vietnam has hit consumption, Vinamilk says

Economic slowdown in Vietnam has hit consumption, Vinamilk says

Vietnam-based Vinamilk has said it is prepared for profits to fall this year as it reacts to slowing consumption in its domestic market - and lines up investment overseas.

The company, Vietnam's largest dairy processor, has forecast its net profit will fall 8.3% in 2014 to VND6.53bn (US$309.5m), with pre-tax profits estimated to drop 6% to VND7.53bn.

Vinamilk told just-food there were domestic and international factors behind its forecast.

"Due to the economic slowdown in Vietnam recently, the purchasing force of Vietnamese also decreases and hasn't improved since Q2/2013 despite all the effort and investment in marketing and sales of Vinamilk and other FMCG companies," a spokesperson said. "In order to overcome this situation, Vinamilk is willing to sacrifice its profit for market share, as well as preparing for Vinamilk's investment to other markets."

Vinamilk is expecting its sales to grow this year, issuing a forecast for a 14.9% rise in total revenues to VND36.3bn.

Poland is the latest market in which Vinamilk is looking to do business. It has drawn up plans to draw up a subsidiary that will take part in the retail trade of products including milk and dairy foods, as well as the wholesale trade of agricultural raw materials.

The move is the latest stage in Vinamilk's plans for international expansion

In January, Vinamilk received approval from the Cambodian government for a new plant in the country.

In December, Vinamilk secured a licence from its own government to invest in US firm Driftwood Dairy.