15.09.2020, 23:27

Chairman of Dabaco: The company’s business results will only have a slight impact if the live hog price continues to decline

Chairman of Dabaco said that the business results of the past were a combination of many segments, not just pigs. Therefore, even though the pork price has decreased, the business results from now to the end of the year will not have much impact.


Dabaco’s business results will not affect much if the pig price falls slightly


Talking to the writer on the sidelines of the conference on livestock development strategies for the period 2020 – 2030 Mr. Nguyen Nhu So, Chairman of Dabaco Group Vietnam Joint Stock Company, said that even if the pig price falls slightly, the results The company’s business will not affect much.



Chairman of Dabaco: The company’s business results will only have a slight impact if the live hog price continues to decline


Mr. Nguyen Nhu So, Chairman of Dabaco Group Vietnam Joint Stock Company. Photo: Duc Quynh


“Dabaco’s business results have recently combined many segments, not just pigs.


With that result consistent with the previous investment process. Therefore, even though the pork price has decreased, the business results from now to the end of the year will not have much impact.


Even I think that live hog prices need to be reduced further to ensure a balance between the interests of farmers and consumers, “said Mr. So.


According to the report of the Board of Management, second quarter revenue of the company is estimated at 3106 billion dong, up 5.3%; Profit before tax and after tax were VND 432 billion and VND 397 billion, respectively, up 14% compared to quarter I /2020.


In Dabaco’s revenue structure, revenue from selling finished products accounts for 88% of total revenue.





In the first 6 months of the year, Dabaco estimated that after-tax profit was about 744 billion dong, 63% higher than year target.


This year, Dabaco sets a net revenue target of 13203 billion VND, profit after tax of 457 billion; growth plan in the next 5 years with these two indicators 5.4% and 11.4% respectively.


Previously, Bank for Investment and Development of Vietnam Securities Joint Stock Company (BSC) stated that Dabaco will have good business results in the first half of the year, but it will be difficult to maintain at a high level in the second half year as the supply of pork will increase due to the re-herding of the population and the need for less essential food storage.


The domestic live hog price tends to decrease. At the end of August, the average price of live hog of the whole country fluctuates between 78000 – 83000 VND /kg, down from 5000-10000 VND /kg compared to the end of July 2020.


The cause of the decrease is due to the return of COVID-19 epidemic in some provinces, affecting purchasing power, while supply increased compared to previous months. Along with the supply of imported pigs, the livestock companies that have a large share of the country also increase their herd.





Price movements of live pigs in the whole country in the first 8 months of 2020. General: Duc Quynh


According to Rabobank, Vietnam’s import of raw pork and pork in 2020 is forecast to increase 60% compared to 2019. While, pork production is revised down by 8-11% compared to 2019 to 215 – 2.2 million tons.


With the amount of retained sows, imported breed pigs and grandparents increasing, live pig production is likely to recover better from the fourth quarter of 2020.


In terms of financial ratios, BSC warned about the risk of short-term cash shortage of Dabaco in 2020 when it found that the number of days in inventory is increasing sharply to 181 days, causing the cash turnover of the business to increase to 153 days in the first quarter.


Dabaco is investing in expanding the herd size with three main projects in Binh Phuoc, Thanh Hoa and Hoa Binh in 2020 from which the total pig herd is expected to increase to 47000 sows (up 53% over the same period).


Besides, other projects such as DeVi instant chicken egg processing factory and Dabaco vegetable oil factory have also increased capacity, which will significantly contribute to the company’s growth.


Take into account egg exports


When asked about the strategy to export livestock products in the coming time, Mr. So said Dabaco is thinking of promoting the export of livestock products to add value.


“However, for the time being, we will focus on exporting processed and deeply processed products such as colored chicken. In the future, we will export eggs. For pigs, we need a longer roadmap.”


Representatives of Dabaco Group said that in order to export pork, production costs must first be lowered because the price of animal feed is still quite high due to import.


“Currently, for Vietnam, it is necessary to solve the stage of food so that the price is low. Animal feed is still imported from other countries, so the price is high, not yet competitive with other countries in the region. “said Mr. So.


To proactively source food, Mr. So said that the agricultural sector needs to restructure crops to ensure raw materials for the production of animal feed, not import anymore.


Source: vietnambiz.vn – Translated by fintel.vn