1. VINAMILK’S INVESTMENT PROJECT IN THE COMPANY
MIRAKA LIMITED- NEWZEALAND
I. Introduction about Vietnam Dairy Products Joint Stock Company –
Vinamilk:
Vinamilk is the enterprise in manufacturing milk and dairy products in
Vietnam. It is also the 15th largest company in Vietnam with 39% of the market
share nationwide.
The company has more than 220 distributors in the distribution system and
over 140,000 outlets in Vietnam. In addition, products are sold in all systems of
supermarkets nationwide. Besides, Vinamilk products are also exported to the
Middle East, USA, France, Canada, Cambodia, the Philippines and Australia…
Over 30 years, Vinamilk has built 8 factories. Vinamilk has 200 items of
milk and dairy products line.
II. Introduction about Vinamilk’s investment project:
On September 11th 2010, Vinamilk has received a license to invest in a high
– quality milk processing factory, the NewZealand’s Miraka Company Limited. It
has also been the Vinamilk’s first investment project overseas so far. The factory
was constructed in November 6th 2010 and officially went into operation in August
2011. With this project, Vinamilk is gradually integrating into the international
market.
1. Type of investment:
This is the form of foreign direct investment Vinamilk:
●Based on the method of investment, this is a form of investment in
building new manufacturing facilities.

2. ●Based on the sector of investment, this is a form of investment in
backward vertical FDI.
2. Purpose of this project:
The purpose of this project is to find places to build factories which are
near suppliers of high-quality raw materials. So that the price will be cheaper
when imported from abroad and producing high quality products to provide for
international market. With this plan, the whole of milk powder produced will be
sold to customers in Asia and the Middle East.
3. Total investment capital:
The plant is designed with a capacity of 32,000 tons of powdered milk a
year, with total investment of 90 million NewZealand dollars, equivalent to 74.5
million ie 1.5496 billion Vietnam dong. The amount of 17.37 million dollars
which vinamilk invested in NewZealand accounted for 19.3% of the stake of the
project.
III. Advantages and disadvantages when investing in NewZealand
1. Advantages and reasons for choice
When reading this investment project, we will think of the questions:
Why in the first investment abroad, Vinamilk selected NewZealand? To become
one of the choices of international investors, what factors are there in
NewZealand? We will analyse these issues together
●With favorable geographical location and natural conditions, NewZealand
is the supply of natural and rich inputs for the production of cheap and good
quality milk, reduce price of the products. In addition, when investing in
Miraka factory, the export of milk to other countries in the world is also more
convenient due to cost of export saving.

3. ●The topography is mainly fresh pastures and good prairies, NewZealand
has a good basis of developing agriculture especially dairy farming. The
number of cows in NewZealand is very large and milk quality has been highly
appreciated.
●The political situation is stable in this country that create a safe investment
environment, reduce the risks in investing activities of Vinamilk.
●NewZealand has a stable legal environment, which include a consistent
system of policies, regulations, statutes…to ensure the interests of
bussinessperson as well as investors like Vinamilk.
●NewZealand has been appreciated to be one of the countries which has a
relatively stable investment environment. Some priority areas are being
invested in NewZealand are agriculture, oil and gas, mining…
●NewZealand’s economy is stable and favorable for a long term
international competition.
●NewZealand government has strongly supported investment environment
to allow international investors moving more resources and cooperating with
NewZealand companies.
●Abundant labor force with high skill is one of the advantages of
NewZealand when receiving investment capital from abroad. So it’s easy for
investors to search for supplies or moving more international staffs.
Additionally, foreign companies invest in NewZealand because of the
following reasons:
●NewZealand is a great place for bussiness activities, is one of ten most
prosperous countries in the world.

4. ●It is a big consumption market and great place to test new products and
services.
●NewZealand was highly ranked in competitiveness by the World
Economic Forum (WEF)
2. Disadvantage:
●NewZealand’s economy was also heavily influenced by the world
financial crisis, pushing the unemployment rate to 4.6% (highest since 2003).
●In 2010, World Dairy was expanded due to increasing demand in Asian
countries and Russia. So in NewZealand, 90% of milk produced is exported to
foreign countries. This resulted in having more milk processing plants here.
From the analyses above, we can see the problems that Miraka are facing:
●Miraka is a newly established company, will not avoid competition from
other dairy companies. Especially the companies have a foothold in both the
domestic market and around the world
●The ongoing development of technology and the global economy requires
company to invest and develop continuously
●Consumers become more aware of products and careful whening
selecting the products. This requires process in generating customer’s trust.
This is the first problem arising for a new established company like Miraka to
overcome.
Risk is unavoidable in investment. Therefore, the difficulties above are
inevitable in the process of international integration in most countries. But with
the advantages that NewZealand has, Vinamilk saw the potentiality, possibilities
of development that this project offering is large and worth exchanging the
difficulties to join the NewZealand dairy industry.

5. IV. Operational status and development potentiality:
1. Operational status :
The project was constructed on 6/11/2010 - used 250 workers during
construction and was officially put into operation in August 2011.
On 1/8/2011, the first bag of milk came out of production chains. This plant
will make whole milk powder (WMP) to provide for Vietnam and other Asian
countries.
In the first year, Mikara milk powder plant operated at 80% designed
capacity
2. De’velopment potenti’alilty:
Miraka Factory specializes in producing high quality milk powder products
with a capacity of 8 tons / hour and can be expanded in the future, e’quivalent
to 32,000 tons / year, capable of processing 210 million liters of raw
milk annually, the equivalent of 55,000 milk cows, eight tons of milk powder per
hour. In peak season, the plant can operate at full capacity and process 1.1 million
liters of milk per day
V. The influence of Vinamilk foreign-invested project on society:
Vinamilk 's construction investment project of high quality milk powder
with full dairy ice-cream factory has brought many benefits to themselves and to
society in both Vietnam and NewZealand.
1. Impacting on Vinamilk and Viet Nam:
Developing brand name: this project helps Vinamilk not only intergrate
into world market step by step but also enhance brand ‘value.

6. Avoiding the risk of exchange rate: compared with raw materials import,
this project has provided a stable milk supply to Vinamilk, reduced/d/ cost risk and
exchange rate fluctuations.
Expanding business market and accessing world market: Milk production
would be more convenient here because of solid and modern technological
facilities, international- standardized staffs and high quality of milk. The export of
milk to other countries is more convenient due to export expenses saving, helps
Vinamilk to expand its market to the world.
Building consumer’s faith: The investment of milk factory in NewZealand
will set consumer’s mind at rest about milk quality.
Con’tributing to increase ‘profit: This project will bring a significant
revenue stream for Vinamilk in the future.
Reducing domestic shortage of milk: Miraka project helps allocating
Vinamilk’s material source to produce milk in an effective way to meet domestic
demand. Factories in NZ will supply milk for both export and Vietnamese market
in order to avoid dairy import from China, Europe,…
2. Impacting on NewZealand
Miraka project not only helps reducing unemployment rate in the region but
also enhances workforce quality by trainning professional skills.
Facilitating ‘agriculture to de’velop more powerful, especially in dairy
farming, improve living condition and income, con’tribute to de’velop
NewZealand economy.