Foreign livestock firms hold over 70% of Vietnam's animal feed market, pushing out the country's local businesses and making it difficult for them to compete fairly, according to local industry advocates who are calling for the government to step in.
Gaps in state policies and the weaknesses of local firms have made it easy for foreign manufacturers to come in and dominate the local market, said Le Ba Lich, chairman of the Vietnam Animal Feed Association. “Domestic businesses with thin capital cannot compete with foreign rivals, especially in the context of high interest rates," said Lich. "Now, most local firms need to borrow up to 70% of their capital demand, while foreign ones need only 30%. With abundant capital, foreign firms can stockpile raw materials when prices are low, but local companies cannot."
According to advocates, foreign firms are free to set prices that local firms must then follow. They are calling for the Vietnamese government to monitor prices more effectively and apply technical barriers, as well as support local farmers and animal feed producers.
Gaps in state policies and the weaknesses of local firms have made it easy for foreign manufacturers to come in and dominate the local market, said Le Ba Lich, chairman of the Vietnam Animal Feed Association. “Domestic businesses with thin capital cannot compete with foreign rivals, especially in the context of high interest rates," said Lich. "Now, most local firms need to borrow up to 70% of their capital demand, while foreign ones need only 30%. With abundant capital, foreign firms can stockpile raw materials when prices are low, but local companies cannot."
According to advocates, foreign firms are free to set prices that local firms must then follow. They are calling for the Vietnamese government to monitor prices more effectively and apply technical barriers, as well as support local farmers and animal feed producers.
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