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11
VIETNAM COOKING AND EDIBLE OIL SECTOR
Prepared by MarketIntello
www.marketintello.com
Table of Contents
22
Content Page Content Page
Executive summary 3 1. Scale and speed of consumption 23
Definition of Edible oil Sector 4 2. Consumption per capita 24
Global value chain of edible oil sector 5 Part IV. Competition landscape 25-28
Production value chain of edible oil sector in Viet Nam 6 1. Scene 25
Part I. Factors/Motivation promoting Vietnamese edible oil sector 7-10 2. Ownership status of the edible oil enterprises related to Vorcarimex 26
1. Income and expenditure 7 3. Market share 27
2. Consumption trends 8 4. Revenue and profit 28
3. Investment activities - New entrants 9 Part V. Key players 29-32
4. Regulation and policy 10 1. Cai Lan 29
Part II. Domestic production 11-22 2. Tuong An 30
1. Number of production enterprise 11 3. Golden Hope Nha Be 31
2. Type of enterprise 13 4. Nakydaco 32
3. Production capacity 14 Part VI. Market Prospects and Challenges 33-34
4. Production growth 15 1. Consumption 33
5. Structure of product 16 2. Production 34
6. Material supply 17 3. Challenges 35
7. Material import 18 Appendix 1. Socio-economic data 36
8. Crude edible oil prices 21 Appendix 2. Introduction about consumer behavior survey on edible oil sectors 39
9. Edible oil export 22 Appendix 3. About Market Intello 40
Part III. Domestic consumption 23-24
www.marketintello.com
Executive Summary
33
Edible oil sector in Vietnam still have a lot of potential
growth. According to result of enterprise census 2014,
there were xxx production enterprises in the
edible oil industry, mainly located in…areas. In
recent year, the state sector is gradually divesting from
edible oil market, instead is the rise of the private sector,
venture and especially is the enterprises with 100%
foreign capital.
In 2015, domestic production of edible oil was
estimated at xxx thousand tons, only reached %
of design capacity. The average annual growth rate of
edible oil production in Vietnam was 8,7% during the
period of 2012-2015 and was forecasted increase % per
year in the period of 2015-2020. Over % of raw material
for production is imported at present. It was forecasted
that the domestic supply only meet % of raw material for
production in 2020.
The domestic consumption also have more prospects
when the consumption per capita only at
10kg/person/year, remained significantly lower than the
average of the world (23,2 kg/person/year) and also lower
than the WHO-recommended level (13,5 kg/person/year).
In 2015, total domestic consumption was xxx
thousand tons, xx times higher than domestic
production. The average annual growth rate of edible
oil consumption in Vietnam during the period of 2012-
2015 was % and forecasted increase 8,3% between
2015-2020.
In 2014, total import of crude oil in Vietnam was xxx
thousand tons, decreased % compared with 2010.
However, import of processed oil increased % compared
with 2010, reached xxx thousand tons, in which,% was
palm oil. Since xxx, the import price of crude oil
tend to continuously decreased, significantly
affected to domestic production of raw material
and the enterprises use the domestic material.
Currently, there is no official data on exports of vegetable
oil. In 2014, Viet Nam exported xxx thousand tons
vegetable oil and animal fats, increased % in compared
with 2010.
Domestic competition market is the battle for market
share between Cai Lan, Tuong An, Golden Hope,
Nakydaco and other import firms. Among the leading
enterprises, Cai Lan and TAC have larger scale
than other with total revenue of the two
companies in 2015 was nearly 15,000 billion
dongs - accounting for 2/3 of the whole market.
Besides the potential of development, the edible oil
industry in Viet Nam is currently facing with many
challenges. The main raw materials for the production still
depends on imports. Changing in exchange and interest
rates will affect the profitability of the enterprises.
Especially, from May 6, 2017 the edible oil industry will no
longer receive protection from the State. At that time the
domestic edible oil market will be more intense
competition from foreign brands.
www.marketintello.com 44
This report refers to the type of cooking and edible oil made from nuts or vegetables contain oil, also
referred to as vegetable oil. The vegetable oil is extracted, distilled and purified from the seeds, flowers,
roots, fruits, stems, leaves ... of vegetables. However, the vegetable oil terminology generally refers to oil of
vegetables with higher extractive index from oil seeds such as peanuts, soybeans, rapeseed, cotton,
sunflower, sesame and from the fruits contain oil such as coconut, palm, olive ...
Definition of edible oil sector
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Globla value chain of edible oil sector
55
Source: MarketIntello
www.marketintello.com
Production value chain of edible oil sector in Viet Nam
66
Source: MarketIntello
www.marketintello.com
Part I. Factors/Motivation promoting Vietnamese edible oil sector
77
1. Income and expenditure
0
40
80
120
160
200
2010 2011 2012 2013 2014 2015 2016* 2017*
Personal income and household expenditure in Viet Nam 2010-2017
Personal income Household expenditure
billion USD
During the period 2010-2015,
average personal income rose by
% a year and the total
expenditure of households
increased by % on average.
Income and expenditure in
Vietnam have increased
considerably over the past 5
years, and are expected to
continue to grow.
Source: Economist Intelligence Unit
* : Estimate
www.marketintello.com 88
• Vegetable and seed oil remained the biggest category within oils and fats over the review period….
• The improvement of income and awareness along with the urbanization and development of food
processing industry boosted the consumption of vegetable oils….
• Consumers started to buy more packaged oil products, rather than produce home-made ones…
• Olive oil was more favored by households with high income….
2. Consumption trends
Part I. Factors/Motivation promoting Vietnamese edible oil sector (cont)
www.marketintello.com 99
- ICOF Viet Nam (Tiara soya-bean)
- Sao Mai An Giang (Ranee fish oil)
- Venture among KIDO (45%, Vietnam) and FGV (Malaysia) + ITL (Indo) (55%): Bottled palm oil product
- Quang Minh corporation joint stock - a multidisciplinary enterprise enter the edible oil market with the brand Mr Bean, OilLa, Soon Soon.
- Supermarket such as Big C, Co.op mark, Metro also involved in oil production with the price advantage (50% lower than the market price)
- The imported edible oil brands are gradually penetrate into Vietnam market such as Sailing Boat from Malaysia, Omely from Indonesia and Soya-been Cook from Thailand.
3. Investment activities - New entrants
A growing number of private enterprises invested in the edible oil sector:
Part I. Factors/Motivation promoting Vietnamese edible oil sector (cont)
www.marketintello.com 1010
• August 23, 2013, the Ministry of Industry and Trade issued Decision No. 5987 / QD-BCT on the
application of formally safeguard measures for items vegetable oil processed imported from countries
and other territories together in Vietnam.
• The import tax rate will be reduced in each period, 3% for the period from July 5, 2015 to May 6, 2016
and only 2% from May 7, 2016 to May 6, 2017, and then to 0 %.
From May 6, 2017 the edible oil industry will almost no longer receive protection from the State. At
that time the domestic edible oil market will be more intense competition from foreign brands.
4. Regulation and policy
Part I. Factors/Motivation promoting Vietnamese edible oil sector (cont)
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Part II. Domestic production
1111
1. Number of production enterprise
Source: Enterprise census, GSO
0
10
20
30
40
50
60
2010 2011 2012 2013 2014
The number of production enterprise in 2010-2014
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Part II. Domestic production (cont)
1212
1. Number of production enterprise (cont)
Source: Enterprise census, GSO
Region 2010 2011 2012 2013 2014
Red River Delta
Northern midlands and mountain areas
North Central and Central coastal areas
Central Highlands
South East
Mekong River Delta
The number of production enterprise by region 2010-2014
The edible oil production enterprises are mainly located in South East (%) and Mekong River
Delta (%).
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Part II. Domestic production (cont)
1313
2. Type of enterprise
Source: Enterprise census, GSO
The number of production enterprise by type of enterprise 2010-2014
Type of enterprise 2010 2011 2012 2013 2014
Cooperatives
Private enterprise
Limited liability company with state capital <50%
Joint stock company without state capital
Enterprises with 100% foreign capital
Joint venture between the SOEs and foreign
Joint venture between the private enterprise and foreign
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Part II. Domestic production (cont)
1414
3. Production capacity
0
500
1000
1500
2000
2500
3000
2008 2010 2015* 2020** 2025**
Production output Designed capacity
Total production output and designed capacity of the whole industry 2008-2025 (Unit: 1000 tons)
* : Estimate
** : Forecast
Source: MoIT
In 2015, the domestic production only reached % of design capacity, expected to reach % in
2020.
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Part II. Domestic production (cont)
1515
4. Production growth
0
500
1000
1500
2000
2500
2012 2013 2014 2015* 2020** 2025**
Domestic production in Vietnam 2012-2025 (Unit: 1000 tons)
Domestic production Linear (Domestic production)
% was the average annual growth rate of edible oil production in Vietnam during the period of 2012-2015 and was
forecasted increase % per year in the period of 2015-2020.
* : Estimate
** : Forecast
Source: MoIT
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Part II. Domestic production (cont)
1616
5. Structure of product
Palm oil is the main product of vegetable oil accounted for 70%, soya-bean oil was 23%, and other vegetable oils
accounted for 7%.
Palm oil70%
Soya-bean oil23%
Other7%
Structure of edible oil product in Viet Nam 2015 (%)
Sources: MoIT
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Part II. Domestic production (cont)
1717
6. Material supply
0
20
40
60
80
100
2010 2015 2020*
Material supply for domestic production 2010-2020 (%)
Domestic supply Import
Sources: MoIT and MarketIntello
90% of material for production is imported at present. Forecasts to 2020, domestic supply only meet % of raw
material for production.
* : Forecast
www.marketintello.com 1818
Source: GSO, GTA
7. Material import
0
100
200
300
400
500
2010 2011 2012 2013 2014
Import of crude vegetable oil 2010-2014 (Unit: 1000 tons)
Total Palm oil Soya-bean oil Other vegetable oil
7.1 Crude oil import
Part II. Domestic production (cont)
www.marketintello.com 1919
0
100
200
300
400
500
600
700
800
2010 2011 2012 2013 2014
Import of processed vegetable oil 2010-2014 (Unit: 1000 tons)
Total Palm oil Soya-bean oil Other vegetable oil
Source: GSO, GTA
Part II. Domestic production (cont)
7. Material import
7.2 Processed oil import
www.marketintello.com 2020Source: Uncomtrade, GSO and GTA
Part II. Domestic production (cont)
7. Material import
7.3 Import source
Crude oil
Processed oil
Palm oil Soya-bean oil
Palm oil Soya-bean oil
www.marketintello.com 2121
World prices of crude vegetable oil materials 2010-2015 (USD/tons)
Source: World Bank and MarketIntello
8. Crude edible oil prices
0
200
400
600
800
1,000
1,200
1,400
2010 2011 2012 2013 2014 2015
Palm oil Soybean oil
The price of crude palm oil and soybean
continuously fell during the last 5 years.
Part II. Domestic production (cont)
www.marketintello.com 2222
Export market 2010 2011 2012 2013 2014
Korea
China
Taiwan
Singapore
Japan
Other countries
Total 96,100 102,262 179,987 158,909 182,982
Source: GTA
Currently, there is no official data on exports of vegetable oil. In 2014, Việt Nam exported thousand tons vegetable oil and animal fats, increased % in compared with 2010.
Export market of vegetable oil and animal fats of Viet Nam 2010-2014 Unit: 1000 tons
Part II. Domestic production (cont)
9. Edible oil export
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Part III. Domestic consumption
2323
In 2015, the total domestic consumption was thousand tons, times higher than production.
The average annual growth rate of edible oil consumption in Vietnam during the period of 2012-2015 was % and
forcasted increase % between 2015-2020.
Sources: MoIT, USDA and MarketIntello
1. Scale and speed of consumption
0
400
800
1200
1600
2000
2012 2013 2014 2015* 2020** 2025**
Domestic consumption in Vietnam 2012-2025 (Unit: 1000 tons)
* : Estimate
** : Forecast
www.marketintello.com
Part III. Domestic consumption (cont)
2424
• Consumption of edible oils in Vietnam remained
significantly lower than the world’s during the
last 5 years.
• Edible oil consumption per capita in Vietnam is
expected to reach the WHO-recommended
level of 13.5kg per annum in
Sources: MoIT, USDA and MarketIntello
2. Consumption per capita
Edible oil consumption per capita (kg/person/year)
* : Estimate
** : Forecast
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Part IV. Competition landscape
2525
• More than 40 enterprises are competing in Vietnam’s edible oil market. Large enterprises are
all belong Vietnam vegetable oils industry corporation (Vocarimex), the brand known such as
Tuong An, Neptune, Simply and Mezan.
• Is the battle for market share between Cai Lan, Tuong An, Golden Hope, Nakydaco and other
import brands such as Sailing Boat, Omely, Soya-bean Cook…
• With the competitive retail price, the imported edible oil brands from Malaysia, Indonesia,
Thailand and Canada appear more frequently
1. Scene
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Part IV. Competition landscape (cont)
2626
% % % % %
%
%
VDFM
Sime Darby
Plantation - Malaysia
%Musim Mas Vietnam Oils &
Fats Pte. Ltd - Singapore
%
Source: MarketIntello
2. Ownership stutus of the edible oil enterprises related to Vorcarimex
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Part IV. Competition landscape (cont)
2727
Source: MarketIntello
3. Market share
Cai Lan, the largest enterprise in the edible oil sector in Viet Nam has breakthrough in terms of market share. Until
2015, Cai Lan accounted over % market share in the whole edible oil industry.
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Part IV. Competition landscape (cont)
2828
• Among the leading enterprises, Cai Lan and TAC have larger scale than other.
• Total revenue of the two companies in 2015 was nearly xxx billion dongs - accounting for 2/3 of the whole market.
• Cai Lan accounted more than xx% market share and xx% profit of the whole industry.
0
200
400
600
800
1000
1200
1400
Calofic Tuong An GHNB Nakydaco
2014 2015
Source: MarketIntello
Revenue of the largest edible oil enterprise
(1000 billion dongs)
Profit of the largest edible oil enterprise
(billion dongs)
4. Revenue and profit
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Part V. Key players (related to market structure above)
2929
• Largest market share
• The revenue
• Highly profitable
• Owning the three most popular brands
1. Cai Lan
0
100
200
300
400
500
600
700
800
900
1000
2011 2012 2013 2014 2015
Profit of Cai Lan vegetable oils over the years (Unit: billion dongs)
Source: MarketIntello
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Part V. Key players (related to market structure above)
3030
2. Tuong AnProfit of Tuong An over the years (Unit: billion dongs)
• Capacity:
• Distribution network:
• Main products:
0
10
20
30
40
50
60
70
80
90
100
2011 2012 2013 2014 2015
Source: MarketIntello
www.marketintello.com
Part V. Key players (related to market structure above)
3131
3. Golden Hope Nha Be
• Capacity:
• Main products:
• Distribution network:
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Part V. Key players (related to market structure above)
3232
4. Nakydaco
• Capacity:
• Distribution network:
• Main products:
• Export market:
0.4
1.6
1
0.8
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
2012 2013 2014 2015
Profit of Nakydaco over the years (Unit: billion dongs)
Source: MarketIntello
www.marketintello.com
Part VI. Market Prospects and Challenges
3333
1. Consumption
• Consumer-awareness of health and wellness, premiumization, and the low level of per capita consumption
together are expected to promises the ongoing growth of the domestic market in the next 10 years.
• More consumers in rural areas are expected to switch to branded products, instead of animal fats and unpackaged
or home-made products.
• The average annual growth rate of edible oil consumption in Vietnam was forecasted increase % between 2015-
2020.
www.marketintello.com
Part VI. Market Prospects and Challenges (cont)
3434
2. Production
• The size of the domestic consumption when the consumption meet the WHO’s recommended in xxx is xxx
thousand tons.
• The domestic production is forecasted to expand strongly to meet the domestic demand by 2020.
• The edible oil output in 2015 was thousand tons, it means that to meet the WHO’s recommended in xxx and
domestic demand in 2020, the market need to produce adding more xxx thousand and xxx thousand tons,
respectively.
www.marketintello.com 3535
• Shortage of raw materials:
• No longer protected:
• Changes in exchange rates:
• More dependence on bank interest rates:
3. Challenges
Part VI. Market Prospects and Challenges (cont)
www.marketintello.com
Appendix 1. Socio-economic data
3636
70
75
80
85
90
95
100
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016* 2017* 2018*
Vietnam’s Population (Unit: million people)
1. Population (millions) (2003 - 2018)
Source: GSO and MarketIntello
* : Forecast
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Appendix 1. Socio-economic data (cont)
3737
2. Gross domestic product (Real GDP) (2005-2015)
Source: GSO and MarketIntello
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Unit: billion dongs
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Appendix 1. Socio-economic data (cont)
3838
3. Exchange rates (by monthly) (Jan 2010 - Sep 2016)
0
5,000
10,000
15,000
20,000
25,000
1/2010 7/2010 1/2011 7/2011 1/2012 7/2012 1/2013 7/2013 1/2014 7/2014 1/2015 7/2015 1/2016 7/2016
VND/USD
Source: GSO and MarketIntello
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Appendix 2. Introduction about consumer behavior survey on edible oil sectors
3939
Study sites: nationwide
Survey period: 11/2016
Sampling method: randomly
Survey method: online survey
Contents of the survey:
(i) Brand awareness;
(ii) Customer satisfaction;
(iii) Consuming habits;
(iv) Factors influencing customers’ buying decisions;
(v) Willingness to pay;
(vi) Brand loyalty;
(vii) Shopping locations and channels to access product information.
The results of the survey will provide your enterprise useful information in order to have better orientation in
market expansion, new market entry and competitor analysis.
For more details about the study as well as receiving the research report or requiring in-depth market
research on your products or competitors’ products, please contact us.
www.marketintello.com 4040
[email protected] (+84)04-39351419
For more information, please contact: MarketIntello Vietnam
www.marketintello.com www.facebook.com/marketintello
Room 305 – 306, 12 Trang Thi, Hoan Kiem, Ha
Noi
@Copyright: Report was conducted and published by MarketIntello Viet Nam, any reproduction and circulation not consented by MarketIntello Viet
Nam is pirated.
Published date: 31/10/2016
(+84)04-39351418
Appendix 3. About Market Intello
Market Intello was founded in 2015 as an initiative of Development and Policies Research Center (DEPOCEN) in
response to the increasing requests for market studies and research from corporate clients. Strongly backed by
DEPOCEN, the firm has a research team with full capacity of providing survey, comprehensive and intelligent information,
using advanced mobile/tablet survey technologies and platforms to help our clients make timely business decisions and
stay informed about market trends and competitors. We also publish in-depth sector and industry analysis reports for both
domestic and international clients.