VIETNAM COOKING AND EDIBLE OIL SECTORhome.marketintello.com/data/widgets/Sample Report/Vietnam...

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


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


Globla value chain of edible oil sector

55

Source: MarketIntello


Production value chain of edible oil sector in Viet Nam

66



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


• 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)


- 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:



• 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 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


Part II. Domestic production (cont)

1212

1. Number of production enterprise (cont)


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 (%).



1313

2. Type of enterprise


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



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.



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



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



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


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



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


7. Material import

7.2 Processed oil import

www.marketintello.com 2020Source: Uncomtrade, GSO and GTA


7. Material import

7.3 Import source

Crude oil

Processed oil

Palm oil Soya-bean oil

Palm oil Soya-bean oil


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.



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


9. Edible oil export


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


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


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


Part IV. Competition landscape (cont)

2626

% % % % %

%

%

VDFM

Sime Darby

Plantation - Malaysia

%Musim Mas Vietnam Oils &

Fats Pte. Ltd - Singapore

%


2. Ownership stutus of the edible oil enterprises related to Vorcarimex



2727


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.



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


Revenue of the largest edible oil enterprise

(1000 billion dongs)

Profit of the largest edible oil enterprise

(billion dongs)

4. Revenue and profit


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)




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




3131

3. Golden Hope Nha Be

• Capacity:

• Main products:




3232

4. Nakydaco

• Capacity:


• 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)



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.


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.


• 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)


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


Appendix 1. Socio-economic data (cont)

3737

2. Gross domestic product (Real GDP) (2005-2015)


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


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



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.


[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.

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