Dong Anh Milk in the race of Vietnam’s powdered milk industry

Dong Anh Trading and Production Company Limited (Dong Anh Milk) was established in 2008 as a limited company founded by Mr. Le Thanh Lac. Dong Anh Milk is the company specializing in the production, distribution and trading of condensed milk, liquid milk from many famous brands such as Goldsure, Milac,…

Over nearly 13 years of operation, Dong Anh Milk’s center and distributor system have available in nearly 20 provinces nationwide, from Ho Chi Minh City, the head office, to central highlands, and other areas to ensure distribution channels across the country.

Source: VIRAC

Dong Anh Milk’s product portfolio is diversified in different categories, mainly imported powdered milk products with some big brands Goldsure, Milac, and Goldlife for a wide range of consumers including the elderly, children and woman in pregnancy.

Source: VIRAC

Financial Review

The business result of Dong Anh Milk in the past 3 years has profoundly fluctuated. Revenue in 2017 reached approximately USD 850,000, followed by a drop to nearly USD 600,000 in 2018, down nearly 30% from the previous year. Sales in 2019 dropped even more deeply when business showed no signs of recovery, continuing to decline 10% from 2018, recording a decline of nearly 37% compared to 2017.

Net profit from business activities in the 2017-2019 period showed better signs when in 2017, the company lost nearly USD 12,000, but in 2018 and 2019 it brought net profit. However, recent business has not been able to witness positive cash flow as its after-tax profit is still negative at around USD 30,000.

Source: VIRAC

In 2019, Dong Anh Milk’s total assets reached more than 2 million USD, having grown impressively from 2017 to now. Fixed assets of the company also tended to increase strongly, but especially inventories were the main cause of Dong Anh Milk’s stagnant business.

Source: VIRAC

In general, it can be seen that in the past 3 years, Dong Anh milk’s business activities and milk production have seen many fluctuations, causing various consequences regarding inventories, business solvency,…

Source: VIRAC

Prospects of powdered milk in the dairy industry 2020

VIRAC forecasts that the dairy industry prospect in 2020 will continue to grow at a high level.  Increasing investment capital in dairy farms aims to reduce the dependence on imported milk and to meet the needs of people’s domestic consumption. The growth rate of powdered milk consumption in Vietnam is estimated at 3.3% per year in the period 2020 – 2024F.

In general, Vietnamese consumers’ expenditure on FMCG products started to slow down. Consumption in the rural market fluctuates greatly due to the increasing input price of agricultural products. Moreover, the level of average income in this market determines the level of spending on FMCG goods. Products of increasing consumption trend include fresh milk, yogurt and high value-added products such as cheese, while the demand for formula and condensed milk may continue to stay the same.

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