Doubling Profit Target with Nearly 900,000 Pigs Sold

According to the business plan revealed exclusively at the AGM, BAF is aiming for the target revenue of over VND 5.6 trillion, with livestock operations contributing nearly VND 5.46 trillion – a 1.69x increase over the previous year.

The company projects VND 774 billion in pre-tax profit and VND 638 billion in net profit, of which approximately VND 636 billion will come from pig farming activities. The remaining contribution comes from the feed production segment. It’s worth noting that in 2024, BAF achieved an impressive net profit of VND 319 billion, a 10-fold increase year-on-year—marking the second-highest profit in its history after 2021.

Speaking at the AGM, CEO Bui Huong Giang emphasized that despite stable top-line revenue, the sharp increase in profit is driven by a strategic shift: in 2025, 100% of operations will focus on pig farming, compared to 60% in 2024 (the remaining 40% previously came from crop trading). “Our 2025 plan is fully centered on livestock, which marks significant growth. We aim to sell nearly 900,000 pigs this year, so in reality, our livestock revenue is increasing,” she added.

Output and Margin Expectations

In 2025, BAF plans to sell over 831,000 market hogs and more than 41,000 breeding pigs, totaling 872,000 pigs. This is expected to generate approximately VND 5.5 trillion in revenue and nearly VND 1.5 trillion in gross profit, with a gross margin of about 27%.

Navigating Challenges, Leveraging Market Trends

Despite market challenges in 2024 – such as Typhoon Yagi in Northern Vietnam and outbreaks of African Swine Fever (ASF), especially among smallholders – BAF delivered strong results. According to the Ministry of Agriculture and Rural Development, Vietnam’s pork output reached 5 million tons in 2024, up 3.7% YoY, while live hog prices rose from VND 50,000/kg to nearly VND 70,000/kg, a 31–35% increase nationwide. Simultaneously, lower feed costs improved overall profitability.

With the new Livestock Law effective from early 2025, a structural shift from households to industrial-scale farming is accelerating. BAF plans to leverage this transformation by expanding operations and strengthening biosecurity to maintain herd size while executing M&A strategies to acquire new farms.

In 2025, BAF will deploy 13 new farms/farm clusters, along with 2 new a feed mill in Binh Dinh and a meat processing plant in Binh Phuoc, both already under construction.

“BAF currently operates 40 farms, not including contract farms. We’re racing against time to reach our 2030 target of 10 million commercial pigs. We’ve also received approval to invest in multi-story pig farms with a capacity of 64,000 sows, a model capable of supporting millions of commercial pigs” said CEO Giang.

Q1 2025: Exceeding Expectations

In Q1/2025, BAF recorded over VND 1.1 trillion in revenue—slightly down YoY, but with improved livestock contribution. BAF sold 160,000 pigs, and pre-tax profit reach at VND 140 billion, slightly up from the same period last year.

The AGM approved the retention of all 2024 profits, with no dividend distribution until the end of 2026. BAF requires substantial capital to build new farms and scale operations.
Chairman Truong Sy Ba explained:

“To reach our 2030 goal of 10 million commercial pigs, we’ll need VND 54 trillion in total investment. We are committed to reinvesting all profits. International partners like IFC have agreed to this strategy and understand the long-term value. Our vision is to scale significantly by 2027, after which we aim to begin distributing dividends.”

The total herbs are excepted: 900,000 pigs in 2025; 165,000 sows & 1.8 million commercial pigs in 2026; 250,000 sows & 3.5–4 million commercial pigs in 2027

Sustainability is inevitable, almost unaffected by US tariffs

On the topic of U.S. tariff policies under Donald Trump, Chairman Ba reassured shareholders that BAF would not be significantly affected.

“We import corn, soybean meal, and wheat from South America, the U.S., and the Black Sea. If tariffs rise, China – the largest buyer – may retaliate, causing prices to fall, which actually benefits us.”

BAF sees sustainability as a long-term necessity:

“ESG is easy to talk about but costly to execute,” CEO Giang noted. “However, Vietnam is committed to carbon neutrality. If companies want to survive and thrive, sustainability is no longer optional.”

“BAF invests in green and sustainable practices, and we believe consumers will increasingly recognize and support these efforts—even if it means paying a bit more.”

The AGM also approved the registration of privately issued convertible bonds on the HNX, originally sold to IFC (Bond code: BAFH2330001). Issued in March 2023, the 7-year, non-collateralized bonds carry a fixed interest rate of 5.25%/year, with a supplementary rate for early redemption or non-conversion.

In governance updates, shareholders approved the resignation of Supervisory Board members Ms. Hoang Thi Thu Hien and Mr. Nguyen Quoc Van, and elected Ms. Duong Thi Hong Tan and Ms. Tran Thi Thanh Tra, both nominated by major shareholder Siba Holdings.

All proposals presented at the 2025 AGM were passed.

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Specifically, BAF established three subsidiaries: BAF Tay Ninh 1 High-Tech Livestock Co., Ltd., BAF Tay Ninh 2 High-Tech Livestock Co., Ltd., and BAF Tay Ninh 1 Animal Feed Production Co., Ltd. The total charter capital of these three companies is nearly VND 800 billion.

These entities will develop Vietnam’s first and most modern multi-story pig farm project. With support from Muyuan – one of the world’s leading livestock enterprises – BAF is expediting legal procedures to commence construction this year. This initiative is part of the strategic cooperation agreement between BAF and Muyuan in 2024.

Located in Tay Ninh province, the 1,550-ha project will be a fully integrated complex, including four buildings that house breeding sows, market pigs, and a feed production plant.

Applying Muyuan’s multi-story livestock farming model, this mega project will feature the most advanced farming technology worldwide. It will have a total farming capacity of 64,000 sows, 1.6 million market pigs, and an animal feed production plant with an annual capacity of 600,000 tons.

14th Farm Acquisition in Just Three Months

On the same day, February 26, 2025, BAF announced the acquisition of 100% equity in Xuan Nghi Phat Co., Ltd., a company with 111 hectares of land bank and a livestock capacity of 7,500 sows. Located in Tay Ninh province, Xuan Nghi Phat has a charter capital of VND 20 billion.

Since partnering with Muyuan, BAF has completed 14 M&A transactions within just over three months. These acquisitions include land, farms, and ongoing legal procedures before construction begins.

The newly acquired farms are expected to commence operations between 2025 and 2026, with an estimated capacity of nearly 71,000 sows and 500,000 market pigs.

Currently, BAF owns over 36 high-tech farms, 9 Global GAP-certified; 2 animal feed with an annual capacity of 460,000 tons, certified by Global GAP and FSSC 22000; 65 SibaFood stores and 350 Meat Shops.

BAF’s total farming scale includes approximately 800,000 pigs, consisting of 70,000 sows and 730,000 market pigs.

BAF’s rapid M&A strategy aligns with its ambition to become Vietnam’s leading livestock company. With Muyuan’s support, BAF aims to sell over 1 million pigs in 2025 and 10 million pigs by 2030.

With live hog prices trading around VND 80,000/kg (the highest in the past three years), this is considered an ideal time for BAF to expand its market share.

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Pork prices continue to increase amid declining supply

According to BAF’s latest update, the global pork price index reached 119 points in December 2024, marking a 7% year-over-year increase. Disease outbreaks in Europe, South Korea, and Southeast Asia are slowing production growth, while U.S. slaughter restrictions and EU regulations are further driving up pork prices. These conditions have contributed to growth and profitability improvements for livestock companies.

The latest quarterly report forecasts a 1% decline in global pork production, reaching approximately 115.1 million tons due to lower output in China. In Europe, pork production is expected to decrease by 0.5% annually. Overall, pork is anticipated to trade at high price levels throughout the year.

Similarly, in China, pork prices rose by 15% in 2024 due to low supply and rising demand. While livestock profitability improved, pork production is projected to decline by around 2% in 2025, reaching 26 million tons, which is expected to support further price increases.

In Vietnam, the livestock industry ended 2024 facing major challenges from disease outbreaks and Typhoon Yagi. Despite this, the sector remains optimistic, contributing over 26% to GDP. Livestock production value is estimated to have grown by approximately 5.4% year-over-year, driven by rising live hog prices and a decrease in small-scale farming.

Total herd size increased slightly by 4%, yet still fell short of domestic demand. According to the General Department of Customs, Vietnam imported over 100,000 tons of fresh, chilled, or frozen pork in the first 11 months of 2024, valued at $228 million (down 17.2%). The country currently imports pork from more than 40 markets, primarily Brazil, Russia, and Canada.

ASF Outbreaks and Regulatory Challenges Impacting Supply

Regarding the African Swine Fever (ASF) situation, industry representatives reported the emergence of a new chronic strain that is reducing the number of healthy pigs. Global ASF developments are expected to remain complex in the near future.

In Vietnam, ASF continues to spread with multiple new variants. Nearly 1,600 new outbreaks were recorded nationwide – up 79% year-over-year in 48 provinces and 2.5 times higher in 20 provinces. This is expected to put further pressure on pork supply.

During Q4, ASF, coupled with the aftermath of Typhoon Yagi and the new Livestock Law effective from January 1, 2025, severely impacted pork supply. Many farmers rushed to sell pigs before shutting down operations, temporarily increasing supply and driving year-end prices down. Pork prices remained stagnant during the Tet holiday due to additional disease outbreaks, including foot-and-mouth disease.

However, pork prices have been rising after New Lunar Year, reaching nearly VND 73,000/kg due to supply shortages. In southern Vietnam, where illegal imports from Cambodia influence the market, prices have surpassed those in the north. This trend suggests a structural supply shortage rather than a temporary fluctuation. As a result, pork prices are expected to continue rising.

In the animal feed market, prices of most raw materials have declined compared to the previous year- imported corn is down 16%, soybeans down 18%, and wheat down 21%. This trend is primarily due to a reduction in total livestock numbers, which benefits large-scale producers.

Doubling Profits in 2025 and Aggressive M&A Strategy

Following a strategic partnership with Muyuan Group in November 2024, BAF successfully acquired 13 companies within just over two months. These acquisitions include land and farm facilities, with legal procedures currently underway before full-scale construction begins.

The expansion aligns with BAF’s ambition to reach 10 million commercial pigs by 2030. According to Mr. Ngo Cao Cuong, Deputy CEO of BAF, the company is negotiating to acquire an additional 10-12 companies in preparation for 2026. Meanwhile, newly built farms are expected to be stocked with pigs in 2025.

“If opportunities and resources align, we may even reach the 10 million pigs before 2030. We cannot outline a fixed M&A plan – whenever suitable land and farms are available, we will proceed with acquisitions. Currently, BAF is negotiating to purchase 10-12 more farms for the upcoming growth phase,” said Mr. Cuong.

Regarding financial targets, Mr. Cuong stated that detailed plans would be disclosed at the 2025 Annual General Meeting. However, initial projections suggest that BAF plans to sell 900,000 to 1 million commercial pigs, generating approximately VND 6 trillion in revenue (based on a price range of VND 55,000-60,000/kg). The profit target is set at 2.5 times the realized profit in 2024. Additionally, BAF will continue narrowing its focus, exiting the agricultural commodity trading segment due to its low-profit margins.

 “Nбєїu giГЎ duy trГ¬ nhЖ° hiện tбєЎi, lб»Јi nhuбє­n thб»±c hiện Д‘Ж°б»Јc cГі thб»ѓ nhiб»Ѓu hЖЎn nб»Їa” – theo Гґng CЖ°б»ќng.

“If current price levels hold, actual profits could be even higher,” Mr. Cuong added.

Long-Term Vision: Transforming into a Food Company by 2030

Beyond 2030, BAF aims to reposition itself as a food company, offering higher-margin products. To support this shift, the company plans to commence construction of a processing plant in Binh Phuoc soon.

“BAF is currently positioning itself as a livestock company until 2030, or possibly earlier. After 2030, we will transform into a food company, supplying ready-to-eat and ready-to-cook products. For now, we are developing the 3F model (Feed-Farm-Food) to meet immediate market demand. By April-May 2025, we will break ground on a processing, slaughtering, and central kitchen plant in Binh Phuoc. The land acquisition and investment approval process have been completed, with over VND 100 billion invested several years ago.”

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Specifically, BAF acquired 60% stakes in Nhat Quyet Livestock Co., Ltd. and Minh Phat Livestock Co., Ltd., which owning an area of 14.6 ha and 15.5 ha respectively, with livestock scale of 4,500 sows per company. Both companies have registered capital of 60 billion VND and are located in Binh Phuoc province.

After signing a strategic partnership with Muyuan Group (a world-leading livestock corporation), BAF has conducted 13 acquisitions in the past two months. These companies own land and facilities and are completing legal procedures before commencing construction.

These farms are expected to be operational from 2025-2026, with an estimated capacity of nearly 63,000 sows and 500,000 market hogs.

Currently, BAF owns over 36 high-tech farms, including 9 certified with Global GAP standards. It also operates 2 animal feed factories – capacity of 460,000 tons per year (certified Global GAP and FSSC22000), 65 SibaFood stores and 350 Meat Shops. BAF’s total herds has reached over 550,000 pigs, equating to an annual capacity of 1 million commercial pigs.

This continuous M&A activity aligns with BAF’s strategy to become Vietnam’s leading livestock company. With Muyuan’s support, BAF is confident in achieving sales of over 1 million pigs in 2025 and 10 million pigs by 2030.

In the context of the Livestock Law effect from January 1, 2025, this is considered a very suitable period for BAF to increase market share.

Impacts of the Livestock Law Effective January 1, 2025

The Livestock Law prohibits livestock farming in unauthorized urban and residential areas from January 1, 2025. Tens of thousands of small-scale farms that fail to meet the standards will have to close or relocate.

In Dong Nai province, 1,979 establishments have ceased operations or relocated. By December 31, 2024, 1,971 ceased farming, and the remaining relocated to rural areas.

In Chau Duc district, 1,005 farms in restricted areas must cease or relocate by December 31, 2024. Among them, 740 farms with livestock weighing over 500kg are eligible for relocation support, with 70% ceasing operations as of December 16, 2024. In Bac Ninh province, 4,947 farms are in restricted areas and subject to relocation.

This regulation aims to align with international practices, enhancing livestock quality while reducing disease risks and environmental impact. However, relocations have impacted pork supply, driving prices up by 15% (from 61,000 VND/kg to 70,000 VND/kg). Prices are expected to rise further approaching Lunar New Year, presenting growth opportunities for modern livestock companies like BAF.

“Founded in 1992 in Nanyang, Henan province, Muyuan Group has developed a vertically integrated livestock production chain, including feed processing, pig farming, slaughtering, and meat processing. Its main products are commercial pigs, breeding pigs, piglets, and pork

Muyuan Group has total assets of 210 billion CNY (29.4 billion USD) and employs 140,000 people. Its subsidiary, Muyuan Foods Co., Ltd., operates pig farms in 218 counties across 104 cities in 24 provinces in China. In 2023, Muyuan supplied nearly 64 million pigs to the market, ranking as the world’s largest producer.”

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Specifically, BAF purchased a 95% stake in Khuyen Nam Tien in Dak Lak for VND 47.5 billion (the company has a charter capital of VND 50 billion).

On the same day, BAF acquired 49% of the shares in five other companies in Quang Tri, including Toan Thang HT, Hoang Kim QT, Viet Thai HT, Hoang Kim HT-QT, and Thanh Sen HT-QT. Each acquisition involved 171,500 shares, representing 49% of the charter capital.

During an investor meeting on November 7, BAF’s CFO, Mr. Ngo Cao Cuong, shared that the company intends to acquire full ownership of all these six companies. For the five companies where BAF acquired 49%, it clarified that these companies have land reserves, are completing legal formalities, and BAF plans to acquire the remaining shares after these processes are finalized.

“BAF’s plan is rapid and large-scale expansion. By 2025, we aim to invest around VND 3 trillion to build approximately 15 farms. If construction falls behind, we will lease or seek investors with land and capital to build according to BAF’s model, which we would then lease back.”

BAF is reportedly speeding up farm construction and leasing as demand exceeds production. If the company cannot keep up, it will sell piglets to farmers to optimize costs and profit.

Pig Supply decrease

BAF disclosed that October 2024 saw a dip in pig prices due to a market surplus caused by companies and farmers selling pigs in response to disease outbreaks and damage from Typhoon Yagi, which left many farms without facilities. Additionally, the Livestock Law, effective January 1, 2025, will require many small farms to relocate, potentially reducing herd numbers. Setting up new farms to meet biosecurity and veterinary standards is challenging, meaning the displaced stock will not easily be replaced.

The company indicated that many units imported Great Grand Parent pigs in 2024, but seeding them to market hog weight will take nearly three years. Therefore, in 2025 there will not be many market hogs from these units, and it will not be until 2026.

Pork production in 2024 expected to decrease by 20% compared to 2023. A potential shortage could persist in the first half of 2025.

“Pig prices have recently hit a low but are rebounding. We expect a price increase toward year-end, maintaining high pricein the first half of 2025. In October, BAF sold 46,000 pigs, generating revenue of VND 337 billion. Year-to-date, we’ve sold 486,000 pigs, doubling last year’s figures with revenue nearing VND 2.7 trillion. Given the limited supply, BAF will increase pig sales in the coming months.”

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BAF Vietnam Agriculture Joint Stock Company (BAF, the Company) has just released its Q3 2024 Consolidated Financial Statement, showing significant growth in livestock operations. This growth is likely a result of continuous herd expansion throughout recent periods. BAF’s total herd has reached over 520,000 pigs, a 73% increase since the beginning of the year, with a commercial pork production of approximately 1,000,000 pigs.

In Q3 2024, pork production reached nearly 163,000 pigs, with market hogs making up the majority, a 114% increase compared to last year. The pork sales revenue reached almost VND856 billion, 2.3 times higher than the previous year. Cumulatively, in the first 9 months of 2024, total pork production exceeded 422,000 pigs, corresponding to revenue of nearly VND2,275 billion, 1.5 times the pork production and 1.9 times the revenue of pork sales for all of 2023.

Net Revenue in Q3 2024 was recorded at VND1,314 billion, an 8% increase year-over-year, with the Sale of animal husbandry products reaching nearly VND856 billion, representing 65% of Net Revenue. The Company benefited from securing feed supplies through two ‘vegan’ feed mills certified by GLOBAL GAP and FSSC 21000, coupled with a 10-20% decrease in raw feed material costs, which helped lower the Company’s Cost of goods sold (COGS). COGS rose by only 2%, lagging behind Revenue growth. Gross Profit reached nearly VND223 billion, a 55% growth year-over-year, with a GPM of 17% and the GPM of animal husbandry products reaching as high as 25%. Profit before tax (PBT) exceeded VND67 billion, a 63% rise from last year.

Source: BAF

In the first 9 months of the year, Cumulative Consolidated Net Revenue reached VND3,927 billion, an 8% increase year-over-year. Revenue structure saw a shift, with the Sale of animal husbandry products accounting for 58% of Net revenue, a significant rise from 25% in the same period last year. COGS was recorded at VND3,418 billion VND, increasing at a slower rate than Revenue growth

Gross Profit reached nearly VND509 billion, marking a 70% increase year-over-year, with the GPM improving to 13% from 8% in the same period last year. The GPM of animal husbandry products reached 21%. Administrative expenses increased slightly due to the addition of new operations, including Hai Ha Farm – the most significant farm complex in northern Vietnam, with a capacity of 5,000 sows and 60,000 market hogs – alongside several other farms.

PBT reached nearly VND275 billion, a 364% increase compared to last year.

As of the end of June 2024, the Company’s Total Assets reached nearly VND6,949 billion, an increase of 7% compared to the beginning of the period. Inventory recorded VND2,068 billion, a 30% growth, including various types of pigs that will be released to the market, in the context of expected pig prices rising above VND65,000 /kg soon.

Short-term receivables amounted to VND332 billion, a decrease of 62% compared to the same period last year, as part of the initiative to reduce agricultural business activities.

Long-term assets under construction reached VND1,091 billion VND, an increase of 21%, including farms expected to be operational in early 2025. Short-term and long-term debts amounted to VND1,867 billion, including a convertible bond issued to the International Finance Corporation (IFC) at an interest rate of 5.25% per annum for 7 years.

BAF’s financial indicators reflect a stable economic position, with the Current Ratio and Quick Ratio standing at 1.3 and 0.4, respectively

Strategic partnership signed with Muyuan – Leading Global Livestock Group

On September 16, 2024, Muyuan Foods signed a strategic partnership with BAF to transfer technology and innovative farming equipment, integrating artificial intelligence into the livestock chain operation process to ensure biosecurity and environmental friendliness. This marks Muyuan’s first strategic partner outside of China.

BAF is expected to access and implement core farming technologies such as constructing high-rise barns, precision feeding, management systems, and odor control to optimize costs and minimize disease risk, thereby significantly improving profits soon.

BAF was honored with two awards in October: “Outstanding Livestock Enterprise in Waste Management Technology” and “Outstanding Enterprise in Biosecurity Livestock” at the 2024 Vietstock Awards.

The Livestock Department organized the 2024 Vietstock Awards under the Ministry of Agriculture and Rural Development. The awards also demonstrate the capabilities of enterprises in researching and developing technologies and valuable solutions to address issues in the Vietnamese livestock industry. The Award Council applied stringent evaluation criteria to identify the most outstanding candidates in Vietnam and the region.

To achieve these accolades, BAF met all criteria, including compliance with legal regulations on quality management, applying advanced and environmentally friendly technologies, and ensuring biosecurity, disease control, and food safety. Additionally, the award prioritized enterprises that made significant contributions to social support activities and other community initiatives.

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One of the critical aspects of the cooperation agreement between BAF and Muyuan is the transfer of intelligent livestock technology. The company stated that in the 4.0 era, applying advanced technologies, automation, digital transformation, and artificial intelligence in livestock farming enhances production efficiency, optimizes resources and ensures biosecurity and environmental safety in line with global standards.

In collaboration with Muyuan, BAF aims to comprehensively improve its closed-loop system, from animal feed factories to livestock farming models. With Muyuan’s extensive experience and successful implementation of biosecurity management measures in China, BAF will learn and apply these practices effectively in Vietnam. This will help minimize the risk of disease outbreaks, protect the health of the pig herd, increase business efficiency, and ensure a stable supply for the market.

In addition,the livestock industry’s development has significantly impacted the environment, from water resource usage to greenhouse gas emissions. However, according to BAF, the advanced technologies transferred from Muyuan will enhance livestock waste management, enabling effective recycling and resource utilization. This will help reduce negative environmental impacts, develop a circular economy chain, and lay a solid foundation for sustainable development – an objective that is increasingly prioritized by businesses and organizations worldwide.

“Muyuan is confident in its ability to support BAF in achieving its goal of expanding the scale to 450,000 sows and 10 million market hogs by 2030. We believe that through this collaboration, both parties can provide Vietnamese consumers with clean, fresh, and safe food while jointly promoting the prosperity and development of the livestock industry in Vietnam. Together, we aim to create a greener, healthier environment and a more prosperous society,” said Mr. Gao Tong, CFO of Muyuan Group.

Mr. Truong Sy Ba, Chairman of the Board of Directors at BAF, also stated: “The partnership between BAF and Muyuan marks the beginning of a new journey for the future. We aim to stop the transfer of farming technology, biosecurity, and environmental solutions and expand our collaboration into many other areas. Together, we will continue to drive the modernization and innovation of the livestock industry.”

The new farming technology enables the goal of raising 10 million market hogs by 2030

According to the published information, Multi-storey Pig Farming Pattern is one of the most critical technologies that Muyuan will transfer to BAF.

Mr. Gao Tong explained that this model has been in China for a long time, with each floor serving a specific purpose. A typical facility consists of 6 floor: floor 5 and 6 are used for breeding sows; floor 3 and 4 are for newly newborn piglets and feeder pigs; and the bottom 2 are for market hogs. This scale allows for efficient management, especially in terms of biosecurity.

Muyuan’s farm also employ advanced waste gas treatment technology. According to a group representative, the system features 4 layers of filtration to ensure the air meets ICU standards before it enters the barn. The airflow is carefully calculated to deliver the precise amount needed inside. Once inside, the gases are accumulated and passed through a separate treatment system, where they are sanitized to a specific standard before being released outside.

Multi-storey Pig Farming Pattern

“Muyuan has numerous farms spread out, and our odor control technology always meets standards, whether in residential areas or more remote locations,” said by Muyuan representative.

More importantly, the Multi-storey Pig Farming Pattern offers many advantages, allowing Mr. Truong Sy Ba to envision even more ambitious goals. At the event, Mr. Ba mentioned that BAF’s target for 2030 increased from 6 million to 10 million market hogs and 450,000 sows.

“This is an ambitious and extremely challenging goal. However, in the context of the African swine fever outbreak, it poses a significant threat to food security. Without companies like ours expanding and managing operations, if the pig population cannot control the disease, there will be a supply shortage, and pork prices could rise to VND100,000/kilogram.”

“We are determined to turn the African swine fever crisis into an opportunity. In reality, no one wants an outbreak. But now that it’s here, we must act,” Mr. Ba shared.

He explained that this goal was set higher following the collaboration with Muyuan.

“Muyuan’s technology offers many advantages. Firstly, it significantly reduces production costs. Secondly, it addresses land use. Compared to conventional methods, Muyuan’s farming technology reduces land costs by 50-70% compared to traditional single-story buildings and even more with multi-story structures. Additionally, filtration systems are in place to ensure biosecurity. Muyuan representatives shared that the odor is filtered to ensure no smell.

Based on this determination, the partnership is a strategic move and a turning point for BAF’s next development steps. It represents a competitive advantage – being a pioneer and staying ahead will significantly enhance competitiveness. Currently, the major competitors in the market are not the large corporations but the small-scale operations. As these smaller players decrease, we aim to capture the market share they leave behind.”

According to Mr. Ba, to achieve the goal, BAF will need to build barns each year to accommodate approximately 1.5 to 1.8 million pigs, which will be introduced in the following years. This figure is equivalent to constructing 12 farms like the Hai Dang complex in Tay Ninh, which has a capacity of 5,000 sows and 60,000 market hogs.

“Currently, BAF operates several large-scale farms such as Hai Dang (Tay Ninh, already operational), Hai Ha (Quang Ninh, soon to be operational), and Giai Xuan (under construction, set to be completed by the end of 2024). Each of these farms supplies 130,000 to 150,000 market hogs annually. This means we must build 11 to 12 farms similar to Hai Dang.”

A complex like Hai Dang is built on about 50 ha. However, the multilayer barn design uses only 25 ha of the area. This means that the land area of Hai Dang can accommodate 2 such farms, resulting in double the production capacity.

“At first, there was some hesitation in protecting the herd, but Muyuan’s livestock technology includes stringent protective processes, ensuring optimal cost-efficiency. Therefore, BAF is fully confident in expanding to a scale of 10 million market hogs. Additionally, the savings on land and support from financial institutions and international banks provide us with the strong financial resources needed to achieve this vision.”

Muyuan Group is located in Nanyang city, Henan province. After over 30В years of development since its establishment in 1992, it has formed a pork industrial chain that integrates feed processing, pig breeding, pig raising, pig slaughtering, and meat processing. Its main products include commercial pigs, breeding pigs, piglets, and pork

Muyuan Group owns a total asset of 210 billion yuan (USD 29.4 billion) and has 140 thousand employees to date. One of its subsidiary Muyuan Foods Co., Ltd. went public in 2014 with its pig farms distributed in 218 counties/districts in 104 cities of 24 provinces/autonomous regions across China. In 2023, Muyuan has supplied about 63.82 million pigs to the market, ranking first in the world

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Disease Challenge Puts Smallholders in Deep Trouble

In assessing the overall situation, Chairman Truong Sy Ba noted that the total pig population in Vietnam is large, around 25-26 million pigs, supplying approximately 45 million pigs to the market each year. Meanwhile, Vietnamese people consume up to 70% of their dietary protein from pork.

African Swine Fever (ASF) has been present in Vietnam since 2019, according to Mr. Ba, posing a significant challenge, especially for small-scale livestock farmers. This observation is based on the reality that small-scale farming groups’ biosecurity and disease control conditions are weaker, leading to substantial negative impacts and even being perceived as “deep trouble.”

Nevertheless, opportunities still exist within adversity, particularly for the industrial livestock farming sector amidst the challenges.

Chairman of the “Vegetarian Pig” brand shares that, before the ASF outbreak, small-scale livestock accounted for the majority of the market, up to 80% of Vietnam’s total pig population. However, when the disease emerged, the market share of small-scale farming decreased to below 60%. This presents an opportunity for the industrial pig farming sector, which receives more systematic investment and better management control.

“Nobody wants the ASF outbreak, but when it happens, it is both a significant challenge for Vietnam’s livestock industry and an opportunity for businesses that have comprehensive and systematic investments in farms with good biosecurity management,” quotes the Chairman of BAF.

“In the next 10 years, small-scale live stock will continue to decrease, from 30% to 40%. This is a very fertile ground, an opportunity for industrial pig farming to develop and secure consumer food security,” said by Mr.Truong Sy Ba.

He believes the Vietnamese livestock industry must acknowledge and “coexist with the disease.” According to him, there is still no perfect vaccine – a type that has been confirmed and proven effective for pig herds – even though ASF has been present worldwide for over 100 years. Coexistence is necessary until a vaccine is developed to solve the problem.

“From small-scale to industrial pig farming, everyone must focus on managing disease safety, especially biosecurity, to protect their pig herds. It is due to the spirit of ‘coexistence’ that everyone is trying to control the situation.”

“However, this process is more controlled in industrial pig farming, while small-scale farming is heavily affected and not well-controlled. In the future, small-scale farming will gradually decrease, making room for industrial farming,” Mr. Sy Ba concludes.

In addition, the disease situation has become more complex since 2019 due to unpredictable strains of the virus. In this context, the industrial farming group will have an additional advantage due to higher control standards.

“Some pigs do not show disease symptoms, but they die within 3-5 days. It’s very difficult to detect and gets more complicated over time. The awareness of biosecurity among the public and businesses has increased, so the outbreak has reduced compared to 2019. However, it cannot be said that the outbreak has been fully controlled, and there are still many hidden risks.”

“I believe that modern farming is more affected by climate change because of investments in cool and enclosed pens, with temperature control systems through fans, ensuring a stable microclimate for the pig herd,” said Mr. Ba.

Is the price pressure from imported and smuggled pigs negligible?

Diseases cause price pressure on the livestock industry as there is an influx of disease-avoiding pigs from farmers into the market. In fact, the price of live pigs has sharply declined over the past few months from the peak above 60,000 VND/kg recorded in July 2023.

In addition to pressure from the disease, the influx of smuggled pigs through border gates into Vietnam is believed to be a reason for the decline in the domestic pig price. However, Mr. Ba thinks that this is not the main reason.

“The root cause is deep, stemming from the overall decrease in economic demand. Another reason is the supply, mainly still from domestic sources. This source has increased significantly as farmers sell pigs due to the disease. Although smuggled pigs have an impact, they are not the main cause. Recently, the Prime Minister issued a directive to tighten control on this issue at border gates. I think this situation will improve in the future,” according to Mr. Ba.

A number of smuggled pigs were caught in An Giang – Photo: Can Tho Newspaper

Similarly, Mr. Ba has a relatively positive view on the impact of imported frozen pork. This source accounts for about 2.1% of the total meat production in the country for the first ten months of 2023, according to data from the General Department of Customs. The reason is that the consumption habits of the Vietnamese people still prefer “hot meat, fresh meat,” so this segment is not affected.

Moreover, the 2% proportion is insufficient to regulate market prices; it would have to be around 50% – a level that Chairman Ba is confident Vietnam will not reach regarding pork imports.

“This source (imported meat) does not have much impact. The nature of imported meat accounts for only about 2%, mainly frozen meat. It is only suitable for the market segments of collective kitchens, restaurants, hotels, and tourist areas. Our people still go to the market to buy hot and fresh meat, as frozen meat is not as tasty,” he states.

 “However, this market segment cannot be hindered when integrating internationally, and we still have to accept it. Because foreign frozen meat is very cheap, when it comes to Vietnam, it also affects the collective kitchen market (Horeca market). As for the hot meat market, in my opinion, it will not be affected,” Mr. Ba said.

Supply is not too abundant; pig price may increase to 55,000 VND/kg after Tet

Regarding the supply and price of pork in the short term, Mr. Ba said that with a total pig herd of 27 million in the country (producing 45-50 million pork/year on the market) along with other foods, it is Ensuring supply during the upcoming Tet holidays, when consumer demand increases.

However, he believes that pig prices will increase at the end of the year because risks from ASF make the supply less abundant.

However, he believes that pig prices will increase at the end of the year because risks from ASF make the supply less abundant.

 “The total population statistics in Vietnam are not clear, but fully meet the needs of Tet when consumption increases. However, there are still challenges and risks from ASF reducing supply. Meanwhile, demand for pigs during Tet will increase by 10% – 20%. Therefore, although the supply is sufficient, it is not too abundant, which will cause pork prices to increase at the end of the year,” Mr. Ba shared.

As for pork prices, BAF Chairman said the current price is at the bottom. However, the impact on industrial livestock farming is actually not too great.

“This price range is the bottom, it must be understood that if this level is breached, it will be a loss. For small-scale livestock farming, which depends entirely on the purchase of breeds and feed, if the biosecurity of herd protection is not good, it is very risky. This price for them is approaching the cost price; even for farmers who do not control their herds well, they are at a loss.”

 “The story of industrial pig farming is different. The price of input materials accounts for 65%-70% of the animal feed of this group. Recently, the price of raw materials has decreased by 15% – 30%, thereby pulling the cost of industrial livestock farming down.”

“At BAF, the cost price is only about 40,000 VND/kg. At this price, it will be profitable if the herd is well-protected and free from ASF or other diseases. BAF is the best disease control company in the Vietnamese livestock industry, the disease rate in the total herd is very small and insignificant. In general, livestock enterprises with good control.

 “We also hope prices will continue to increase at the end of the year, and after the Lunar New Year. In my opinion, the price of live pigs during Tet will increase from 48,000 – 51,000 VND/kg to 53,000 – 55,000 VND/kg after Tet.”

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В BAF Vietnam Agricultural Joint Stock Company (BAF, Company) released its Consolidated Financial Report for Q2 2023, showing stable growth in business operations. Consolidated Net Revenue in Q2 2023 reached VND1,638 billion, a 14% increase compared to the same period. Gross Profit in Q2 2023 reached VND102 billion, a 54% increase compared to the same period, with a gross profit of VND63 billion from the livestock sector, an 82% increase. The gross profit margin from the livestock sector was 26%.

Cumulatively for the first 6 months of 2023, Consolidated Net Revenue reached VND2,455 billion, slightly lower than the same period, mainly due to decreased Revenue from agricultural merchandise and livestock business operations. Net Revenue from agricultural merchandise decreased by 21% due to a strategic reduction in this activity, which had a low gross profit margin and was subject to significant risks influenced by the Russia-Ukraine war. Besides, the company retained Feeder Pig for meat production, resulting in pork sales not matching the overall herd scale. Therefore, Livestock Revenue reached nearly VND600 billion.

Due to proactive sourcing of livestock feed from 3 “vegetarian” feed mills meeting GLOBAL GAP and FSSC 21000 standards, the cost of goods sold reached VND2,289 billion, a 17% decrease compared to the same period. GP reached VN166 billion, with a gross profit margin of 7%, a one percentage point increase compared to the same period. Enterprise Management Costs, Sales Costs, and Interest Expenses increased during the farm scale and distribution chain expansion. Pre-tax profit reached nearly VND18 billion.

As of the end of June 2023, the company’s Total Assets reached VND6,380 billion, a 35% increase compared to the beginning of the year. Short-term and long-term assets increased by 38% and 31%, respectively. Inventory was recorded at VND1,216 billion, a 38% increase, including pigs expected to be released to the market when pork prices were trading around 62,000 – 65,000 VND/kg from Q3 2023 onwards. Long-term assets in progress reached nearly VND1,000 billion, a 174% increase as the company rapidly put additional farms into operation in the year’s final months. Short-term and long-term loans amounted to VND1,603 billion, including convertible bonds issued to the International Finance Corporation (IFC) with an interest rate of 5.25% per annum for a 7-year term. BAF’s financial indicators reflect a state of stable finances, with a current ratio and quick ratio of 1.1 and 0.8 times, respectively.

The financial indicators of BAF reflect a stable financial condition, with a current ratio and quick ratio reaching 1.1 and 0.8 times respectively.

From 2020 to the present, BAF has implemented a closed livestock chain model under the 3F framework (FEED-FARM-FOOD) and has observed rapid growth in scale. The operation of 3 animal feed plants has achieved FSSC22000 and GLOBAL GAP standards. The number of modern farms has tripled to 23. The distribution chain has expanded to 60 Sibafoods and over 400 MeatShops. After a period of scaling up, the company has reviewed and adjusted its business operations toward sustainable development for the next phase. It has strengthened control activities, reduced expenses, and optimized the livestock process in line with the strategy to become one of the top 3 leading livestock companies in Vietnam.

As a result, business operations have not met expectations in the first 6 months of 2023. The company’s total herd has reached over 230,000 pigs, corresponding to about 570,000 market-ready pigs expected to sell from Q3 2023 onwards. Given the context of pork prices fluctuating around 62,000-65,000 VND/kg at present and projected to increase to 70,000 VND/kg in the final months of the year, the business results of BAF are anticipated to show positive outcomes in the upcoming period.В 

Expected Sustained High Pork Prices

In the past 3 months, pork prices have witnessed a 21% increase, rising from 51,000 VND/kg to 62,000 VND/kg due to reduced supply due to disease outbreaks and farmers not restocking.

Former Deputy Director of the Livestock Department (Ministry of Agriculture and Rural Development), predicts that pork prices are expected to stabilize around the lunar month of July (mid-August to mid-September in the Gregorian calendar). Demand could recover as schools reopen for the new academic year, increasing demand for institutional kitchens.

KBSV Securities Company anticipates that in the second half of 2023, pork prices will continue to recover and fluctuate around 65,000 – 68,000 VND/kg, nearly an 8% increase compared to the same period, driven by the removal of pork from stabilization goods and the ongoing downward trend in supply since the beginning of the year.

This favorable condition is expected to greatly benefit BAF, which currently holds a significant inventory of pigs, enabling it to make a breakthrough and achieve positive business results in the coming months.

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The price of live pigs increased by 18% to 59,000 VND/kg.

The explanation for the price increase is mainly due to the decline in supply as households haven’t restocked due to losses and the impact of African Swine Fever (ASF).

В In the early months of the year, live pig prices declined for a long period, and the high cost of animal feed caused many difficulties for households. The production cost of households fell to around 53,000 – 55,000 VND/kg, and they incurred losses of up to 1 million VND per pig sold. Additionally, concerns about the return of ASF and reduced pork consumption in the context of high inflation in the first quarter have made farmers hesitant to restock.

The decrease in supply has created an opportunity for the price of live pigs to increase by 18% in the past month. This is seen as an opportunity for modern pig farming companies which applying the 3F (FEED-FARM-FOOD) model – low production costs to regain growth momentum.

The opportunity for modern 3F pig farming companies

BAF Viet Nam Joint Stock Company (listed on HOSE, stock code BAF) is considered as a representative entity in applying the modern 3F (FEED-FARM-FOOD) pig farming model.

In terms of FEED, the Company has put into operation 3 “Vegetarian” feed factories producing vegetable source livestock feed without any harmful substances to ensure nutrition for pigs. The 3 factories have a capacity of about 460,000 tons/year and have achieved the highest global certifications in Animal feed production quality management systems: GLOBAL GAP CFM 3.0 and FSSC 22000 Ver 5.1.

In terms of FARM, a series of farms have been put into operation, and construction has begun to increase the number of farms operating and deployed to 23 farms. BAF’s closed farm system applies modern European technology, an automatic feeding system through a central control system to minimize contact between humans and animals, limit diseases, significantly reduce labor costs, and achieve a water circulation rate of 95%.

In the FOOD sector, BAF Vietnam has successfully launched high-quality BAF Meat, a plant-based protein product made from vegetarian feed. They have continuously expanded their distribution network, with over 60 Siba Food stores and more than 300 Meat Shops spread across Vietnam

The substantial investment and support from the International Finance Corporation (IFC) have contributed to the rapid development of BAF. Currently, BAF has emerged as one of the top 5 largest pig farming enterprises in the country. The total number of pigs sold in 2022 exceeded 303,500, nearly doubling compared to the same period. At present, BAF’s total herd size is around 230,000 pigs, with a production cost of approximately 45,000 VND/kg.

BAF aims to continue expanding its modern farm system and plans to operate an additional 9 farms by the end of 2024. The projected total herd size will reach 90,000 sows and 2.2 million commercial pigs.

Dabaco Group (listed on HOSE, stock code DBC) is a longstanding diversified company in the livestock industry. Its main business areas include pig farming, poultry farming, and real estate development.

In the first quarter, DBC recorded net revenue of 2,314 billion VND, a decrease of 18% compared to the same period. Due to business operations below the cost price, DBC incurred a net loss of 321 billion VND, while it made a profit of 8.6 billion VND in the same period last year. This is also the largest quarterly loss for Dabaco to date.

As of mid-April 2023, DBC’s total pig herd reached 120,000, a 25% decrease compared to the same period (according to VCBS). According to Mr. Nguyen Nhu So, Chairman of Dabaco, the production cost for the pig farming segment of DBC is currently around 55,000 – 56,000 VND/kg.

The price of live pigs is expected to continue increasing due to limited supply and the impact of ASF

Currently, the market share of households livestock farming in Dong Nai province has decreased sharply to around 25%-30%, compared to the previous 70%. The number of households in Vietnam has reduced by nearly five times, with less than 2 million households in the past 10 years.

According to Mr. Truong Sy Ba, Chairman of BAF, under the recent outbreak of ASF, Vietnam’s total pig herd has decreased by 20-25%. Additionally, the low of live pig’s price has led to a massive selling-off by farmers and a limitation in restocking. Under the impact of the disease, it is forecasted that from the end of May to the end of the second quarter of the following year, the average price of live pigs will range from 60,000 to 65,000 VND/kg.

According to the forecast by OECD, Vietnam will rank second in Asia (after China) in pork consumption, with an annual growth rate of 3.1% in the 2022-2030 period. Fitch Solution also predicts that Vietnam’s pork consumption growth rate during the 2018-2026 period will increase by 25%, and by 2026, the average pork consumption in Vietnam will be 31kg per person.

The limited supply of pigs in the upcoming period, along with the recovery of total demand, will be the main catalyst for pushing up the price of live pigs. It promises to create favorable conditions for modern livestock enterprises to return to a growth trajectory.

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