Vietnam’s appetite for foreign baby formula is making US giant Abbott rich

Abbott is widely known as a formula milk supplier, and bagged more than $1 billion in sales from 2014-2016 in Vietnam.

Abbott, a U.S.-based global healthcare company, said its net sales in Vietnam last year jumped 31 percent from 2015 to $434 million, ranking the country as the fastest growing among the firm’s top 10 markets based on revenue.

Sales growth in the Southeast Asian nation surpassed major markets such as the U.K., Canada, Colombia and Italy, bringing Abbott’s total revenue last year to $20.85 billion, or 2 percent up from 2015, the firm said in its 2016 annual report.

In Vietnam, where the firm arrived in 1995, Abbott is widely known as a formula milk supplier, and bagged more than $1 billion in sales from 2014-2016.

Last year, the firm expanded its commercial presence into Vietnam’s pharmaceutical business by acquiring two manufacturing facilities. This deeper penetration was among the company’s business highlights of 2016, Abbott said in the report.

Established in 1995, Glomed has two plants in the southern province of Binh Duong and five branches across the country.In August 2016, Abbott acquired Glomed Pharmaceutical Company Inc (Glomed), a leading Vietnamese drug manufacturer.

A month later, Abbott’s subsidiary CFR International SPA raised its ownership in Vietnamese drug firm Domesco Medical Import Export Joint Stock Corporation (Domesco) to 51.7 percent from 45.9 percent.

Formed in 1888, Abbot has about 100 manufacturing facilities globally with 94,000 employees.

The Vietnam Dairy Association (VDA) said foreign firms, led by Abbott, Mead Johnson, Dutch Lady, and Nestlé, dominated the domestic powdered milk market, holding up to a 75 percent of market share as of 2013.

The developing country with more than 90 million people is now home to 60 dairy firms that produce and trade more than 300 dairy brands.

Last year, revenue in the dairy sector edged up 3.3 percent from 2015 to more than VND95 trillion ($4.2 billion), 45 percent of which came from Vinamilk, the Industry and Trade Ministry cited VDA data as showing.

The ministry estimates that Vietnam’s dairy industry grew on average 17 percent annually from 2011-2015, while per capita consumption of milk is forecast to rise 9 percent per year to 27-28 liters by 2020 from around 20 liters now.