Arla Foods Prepares to Move Into Vietnam

A large-scale effort to win over the Chinese market has been launched by Arla Foods, and according to the Scandinavian dairy company – which is owned by Danish and Swedish farmers – this attempted market entrance will not be their last in Asia. The plan is to use the potential success in China as a foundation for a successful entry into Vietnam, where milk product sales are rising.
     The products that Arla Foods will use in their Asian campaign are the ready-for-sale full cream milk powder brands such as Dano and Milex, which the dairy company have already been selling on a large scale in places like the Dominican Republic and the Middle East through their sub-company, Arla Foods Ingredients.
     In China, however, the consumption of milk powder products continues to rise rapidly. In 2005 the consumption growth was no less than 15 pct, thus making it a natural place for Arla Foods Ingredients to make its first large entry in Asia.

Vietnam is Next
As soon as Arla Foods have established their business in China, the Scandinavian dairy company plans to enter into the booming Vietnamese market. Such a move would be the first real aggressive market entry in Southeast Asia ever since the company established its current sales office in Kuala Lumpur, Malaysia.
     “We see Vietnam as the next step, because it is such a large and growing market in general – also when it comes to milk powder products. There is certainly a big potential there for us. It will be a natural step for us to take, once we have established ourselves in China and gained more knowledge of the Asian consumers. The customs conditions also make Vietnam a preferred market compared to other Southeast Asian countries such as Indonesia and even Malaysia,” says Business Unit Director Frede Juelsen.

Mohammed Not Entirely to Blame
According to Mr. Frede Juelsen, Arla Foods’ efforts to increase their sales on a more global level should not be seen solely in light of the recent boycotts of Danish goods in many Muslim countries, which was sparked by the 12 infamous Mohammed-drawings in a Danish newspaper – although that whole ordeal has affected the pace of their global market expansion.
     “We would most likely have moved into China even if the Mohammed crisis had never occurred. But it definitely did speed up the process, since the boycott has made us realize the need for us to put our eggs in a few more baskets. As a result we are looking more and more at the Asian markets now – more so than we have done in the past,” Frede Juelsen tells ScandAsia.

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