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Asia300

Vinamilk sets revenue target of $2.25bn for 2017

Earmarks $750m for investment up to 2021

HO CHI MINH CITY -- Vietnam Dairy Products, or Vinamilk, is aiming for 51 trillion dong ($2.25 billion) in revenue and over 9.7 trillion dong in net profit in 2017 -- year-on-year increases of 8% and 4%, respectively.

The targets being presented to shareholders at next week's annual general meeting in Ho Chi Minh City are relatively humble compared to gains that sometimes exceeded 13% over the past five years despite stiffer competition from foreign and local rivals, including FrieslandCampina, Nestle, Abbott, TH True Milk, NutiFood, and IDP.

As in 2016, the company plans to pay dividends this year at least 50% in cash. Vinamilk has said it will set aside $750 million for strategic development of production and marketing in the next five years. Production capacity will increase 70% to 2.8 million tons by 2021. With annual growth of 10%, domestic sales are expected to reach 61 trillion dong by 2021, and will account for 75% of total revenue expected to grow to 80 trillion dong. Vinamilk is also investing in U.S. and Australasian dairies to increase its supply of raw milk.

Following the Vietnam government's decision last year to privatize Vinamilk shares, the number of directors will be increased from six to nine for the next four years. These will include two representatives of Vietnam's State Capital Investment Corp., which retains a 39% stake. Two representatives of Fraser & Neave, which now owns 17% of the dairy company, are expected to join this month pending approval at the annual general meeting.

Vinamilk shares have been trading at around 140,000 dong apiece, and rank among the top ten stocks on the Ho Chi Minh City bourse.

(Nikkei)

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