New Australian dairy products are coming to Vietnam

Pactum Dairy Group- a milk processor based in northern Victoria which is a joint venture between Australian Consolidated Milk and Freedom Foods- has signed a deal to supply local firm IDP with about four million litres of UHT milk a year.

“Big isn’t always better when it comes to Australian businesses wanting to capitalise on the so-called Asian dining boom,” said Tran Bao Minh, chief executive of International Dairy Products JSC (IDP).

According to Minh, big firms can be too slow to deliver products to meet fast changing consumer tastes across Asia.


Tran Bao Minh – chief executive of International Dairy Products JSC

For example, Minh shared that it took 18 months to two years for one big overseas company he had recently dealt with to deliver a product to market.

Minh added that Asian dairy market was fast changing and consumers were constantly looking for new and better products.

“Our objective is looking for a company that is big enough to be reliable but not too big that it may become too slow as when they’re too big they’re not flexible enough,” Minh commented.

With this above criterion, IDP has recently chosen Pactum Dairy Group- a milk processor based in northern Victoria which is a joint venture between Australian Consolidated Milk and Freedom Foods, the cereal and snack company backed by the billionaire Perich family- to be their partner.

Pactum has signed a deal to supply IDP with about four million litres of UHT milk a year.

A promising long term partnership

Minh said it could evolve into a long-term partnership stretching across a suite of dairy products, provided that Pactum can keep up with the fast changing Asian tastes.

“We are also looking at ice creams, cheese – if you have high quality raw milk you can do all kinds of dairy products that Vietnamese are more and more looking for. So, it might be a very long-term strategy and partnership with Pactum Dairy if the partner can keep up with our fast pace.”

IDP is a mid-sized Vietnamese dairy company, generating about $150 million (AUD$198.4 million) in revenue each year.

Pactum Dairy Group, which launched 2014, operates one UHT plant in Shepparton in Victoria’s north. Despite its smaller scale, it has already signed strategic supply agreement with several Asian companies, including China’s New Hope and Bright dairies.

Under its partnership with IDP, it will supply UHT milk for the company’s LoveinFarm product range, which uses milk sourced exclusively from overseas.

Minh believe that overseas milk was a higher quality than Vietnam’s domestic supply, where cows are kept mainly in pens.

He shared that the name LoveinFarm came from his experiences visiting farms in New Zealand, Ireland and Australia, where cows roamed in paddocks and were more comfortable in a cooler climate.

“LoveinFarm comes from you having love for the cows on the farm as well as having love for the new generation that you are making the milk for,” Minh said.