In the context of the cost of imported raw materials such as vitamins and minerals from Europe and the US increasing by about 4.5% in the first quarter of 2025, Vinamilk only adjusted the selling price up by about 2.6%. The expected increase in selling price for the whole year is only 3.4%.

Afternoon of April 25, Joint Stock Company Vietnam Milk (Vinamilk, HOSE: VNM) held the 2025 annual general meeting of shareholders online.

Raw material prices increase, Vinamilk wants to stabilize selling prices

At the congress, the content that received many questions was the impact of trade tensions on Vinamilk's business strategy. How does the increase in input prices of milk affect profits and revenue?

Directly answering questions from shareholders, Ms. Mai Kieu Lien - General Director of Vinamilk - said that she has signed a long-term import contract from Europe, including vitamins, minerals and important ingredients.

Vinamilk has preliminarily calculated that the price of raw materials this year will increase by about 4.2%. In the first quarter alone, the price of raw materials increased by about 4.5%, but Vinamilk only increased the selling price by about 2.6%.

Expected to increase selling price for the whole year by about 3.4%. Try to offset the price increase so as not to directly affect consumers.

"We try to control costs not by cutting, but by innovation and improvement. From raw materials, production, distribution to logistics, everything is reviewed to ensure maximum efficiency," said Ms. Lien.

The current tariff situation only affects the psychological level, but if it is actually applied, export industries such as wood, garment, etc. will be greatly affected. That leads to a defensive mentality in consumption.

"At Vinamilk, the domestic market is the main thing, export growth is fast but sales account for a small proportion so the impact is not big. The world is a communicating vessel, everything is temporary. Everyone wants their country to be stable so there will be cooperation agreements.

We think the current turmoil will end very quickly. Currently, the countries are negotiating. Instead of implementing it immediately, the tax imposition will be postponed for 90 days. Personally, I feel optimistic," said Ms. Lien.

With a product line ranging from low-cost to super-premium, Vinamilk can flexibly adapt to every market segment. Even when shareholders were concerned about its ability to compete in the context of a 0% import tax on US milk, Vinamilk's general director said that "it will not have too much impact".

The reason is that imported liquid milk has difficulty competing with domestic products due to transportation costs, consumer habits and freshness.

For powdered milk, the current tax rate is 10%. If it goes to 0%, the impact will not be too big because the price difference between segments is still very high.

Increase investment in farms, gradually reduce purchases from farmers

One of the notable issues is that the "big guys" in the dairy industry want to increase farms and reduce dependence on farmers.

Up to now, Vinamilk is managing a total herd of 130,000 cows, of which Vinamilk and Moc Chau Milk farms alone have about 40,000 cows. The output is 1 - 1.1 million liters of milk per day, from both farms and farmers.

The upcoming strategy is to continue to increase investment in farms, gradually reducing purchases from farmers, an inevitable trend when urbanization causes small-scale farming to gradually shrink.

However, finding new land for the farm is a challenge, so Vinamilk will focus on increasing the productivity of the existing herd to ensure output.

According to Vinamilk, this enterprise has completed its investment portfolio in Laos. The herd here currently reaches nearly 4,000 cows, with an average milk yield of 35 liters/cow/day, higher than the 30 liters/cow/day at domestic farms thanks to the cool climate similar to Da Lat.

Regarding production activities, the management board said that the Dielac Factory in Dong Nai will be relocated according to the local decision in 2025. Vinamilk has worked with the provincial government and expects to complete the relocation within two years, moving to Binh Duong province.