Mr. Nguyen Nhu So: Dabaco produces animal feed that never loses, predicts pig prices will go up

The head of Dabaco Group believes that hog prices will have to go up. Currently, the price is around 54,000 - 55,000 VND/kg, the Chairman of the Board of Directors confirmed that the total herd decreased, so there is no reason why the price of pigs will not increase.

On the morning of April 22, the 2023 Annual General Meeting of Shareholders of Dabaco Vietnam Group Joint Stock Company (Code: Dabaco) took place with the participation of 309 shareholders, representing 53.22% of the company's voting rights. .

In 2023, the enterprise sets a revenue target of VND 24,562 billion, which includes internal consumption. While the target  profit after tax reaches 569 billion dong many times higher than the achieved figure in 2022 (5 billion dong).

Source: Compiled from Wichart and Dabaco's AGM documents.

In 2022, Dabaco's net revenue reached 11,558 billion, up nearly 7%, but profit decreased by 824 billion compared to 2021 to more than 5 billion. Compared to the set target, the group only achieved more than 51% of the revenue target and very small compared to the annual profit target (918 billion).

Regarding 2022, Mr. Nguyen Nhu So - Chairman of the Board of Directors shared that the initial goal was set based on careful calculations, but in the past year, there have been many events in the bond market, the stock market in addition to other factors. Russia-Ukraine conflict, the economy goes down.

In 2022, the head of Dabaco estimated purchasing power to decrease by about 45%, but up to now, it has decreased by 65%.

Dabaco is a business in the essential food industry, but most have to sell below the cost of products. For the pork segment, production is priced at 55,000 - 56,000 VND/kg but only sold at 47,000 - 48,000 VND/kg and the highest is 49,000 VND/kg. That is not to mention the epidemic in 2022.

Mr. Nguyen Nhu So shared: “In my 27 years at Dabaco, I have never had to meet with the board of directors once a week, from 7 a.m. even every 3 days. Hay 16, 17 years ago, I have never had a meeting with the market team, but for almost a year now, I have to meet continuously.

Chairman of the Board of Directors of Dabaco shared and discussed with shareholders. (Photo: HK).

At the meeting, Mr. So shared a series of difficulties that businesses are facing. "The epidemic is very complicated, there are areas that seem to never have an epidemic. Dabaco produces 60 million breeding chickens a year but has to destroy 30 million, selling only 30 million."

"The supply axis disruption causes prices in the world to increase. For example, an oil press factory, Dabaco buys about 30,000 - 40,000 tons of soybean meal each time, but the price keeps going up. If it goes down to hundreds of USD/ton, it is normal for Dabaco to lose a few million USD. It is difficult to calculate in the market. Dabaco tries very hard to buy from manufacturers, not from trade, "said owner. information Dabaco president.

Regarding the issue of escalating interest rates, Dabaco Chairman said that businesses have never had to borrow more than 6%/year, currently only borrow at 4.5%, 5% or have 6% in banks. Working capital is still a lot.

In the real estate segment, there are 36 hectares of land with more than 200 billion in compensation in 2016 but so far it has not been implemented due to problems with policies and mechanisms of the state.

Meanwhile, Dabaco still has to invest, Thanh Hoa invests a lot, up to trillion dong but can only raise 6,200 pigs. Recently, the epidemic situation in Vietnam is so great, Dabaco has to import 5,000 parents from France, this July will return to 6,000 children of grandparents and return at the end of the year.

In addition to the African swine fever vaccine being studied, the company plans to sign a contract to produce classic swine fever and aims to produce a foot-and-mouth disease vaccine.

"Particularly for the African swine fever vaccine project, Dabaco has to spend a lot of research, machinery and human costs. This is not a simple project, but if done successfully, it will be a billion-dollar project. USD".

Assessing this year, the head of the group said that 2023 is an extremely difficult year, with the current price situation, we will certainly have to endure until the end of the second quarter. Previously, the total number of pigs in the country was about 28-29 million, which was enough for supply, now only 23 million heads, but the purchasing power has decreased.

No dividend in 2022

In terms of investment and capital construction plans, the company plans to expand production facilities in the main and auxiliary fields, actively seeking opportunities to implement projects in other fields in order to maximize benefits.

Specifically, Dabaco will review, complete investment and put into use unfinished projects such as Parkview City building, social housing area, vaccine factory; implementing approved or approved projects in terms of guidelines such as: Road H2 in the form of BT and reciprocal projects, livestock area in Quang Ninh, vegetable oil press factory phase II.. .

The company also plans to submit to the general meeting a profit distribution plan in 2022. Dabaco proposes to use all undistributed after-tax profits as of December 31, 2022, about VND8 billion to supplement the development fund of the company. company.

At the same time, the maximum rate of remuneration for the Board of Directors, Supervisory Board, and Secretary of the Board of Directors is not more than 1.5% of profit after tax.

Discussion part:

Plan to launch African swine fever vaccine on the market?

Chairman Nguyen Nhu So: To have a vaccine to market, it must be the fourth quarter of this year. By the end of June or mid-June, the vaccine factory will be put into trial operation but cannot yet produce it.

If Dabaco deploys commercially, will the business be export-oriented?

Chairman Nguyen Nhu So: If the vaccine can be made, it will be a billion-dollar project. Dabaco will export the vaccine to many pig-raising countries around the world.

Potential increase in pork prices this year?

Chairman Nguyen Nhu So: Subjectively, I think the price should go up. The price is currently around 54,000 - 55,000 VND / kg, the total herd decreases, there is no reason not to increase.

Recently, the total herd decreased in all countries in the region of China, Thailand, not only Vietnam.

Dabaco's business plan always takes risks into account. For example, a sow that gives birth to about 28 pigs a year is only counted for 26, in the process of raising pigs, the mortality rate is only about 5%, the calculation is brought up to 7%. Profits are only given at 5-7%.

The price of live hog in the country this year. (Source: Wichart/VietnamBiz).

Revenue and profit of Dabaco's cooking oil segment last year? Will the finished soybean meal after oil pressing be consumed internally or sold outside?

Chairman Nguyen Nhu So: Last year, profit of 60 billion from the oil press factory. Oil residues at the factory are used 80% internally and 20% are sold outside. Previously, cooking oil products were only made of one type, in the near future Dabaco will release more products for mothers and babies, oils for people with heart disease, etc.

Estimated business results in the first quarter of 2023?

Chairman Nguyen Nhu So: Currently, Dabaco has not finished synthesizing data, but the first quarter will still be difficult. "The forecast for the second quarter is better, the third quarter is better and we will try to do better in the fourth quarter. Dabaco will fulfill the set target." However, business results still depend on "times - geographical advantages".

Dabaco imports a lot of feed ingredients, does the company have any solutions to limit this in order to reduce production costs?

Chairman Nguyen Nhu So: In the country, not only Dabaco, but all US, Dutch and Thai enterprises have to import raw materials.

In other countries in the world, they grow in large sample fields of thousands of hectares, but in Vietnam, the scale is small, the yield is low, and the price is high.

In the animal feed industry, Vietnam had to import fishmeal in the past but now has to buy it domestically. The main raw materials must be imported. But why does the production of animal feed do not make a loss because all businesses have to import.

As for the research on products to replace domestic raw materials, every feed manufacturing enterprise is concerned, scientists or managers are also concerned.

Revenue structure by business segments of Dabaco in 2022. (Source: Audited Consolidated Financial Statements 2022).

Dabaco's products are difficult to reach customers even though they have been sold through supermarkets in the past few years, what plans do you have to promote products to consumers?

Chairman Nguyen Nhu So: The cost of entering the supermarket is very high. Previously, the group had participated, but recently, it did not consider accessing the supermarket channel. There are supermarkets asking for 30-40% discount while the producer does not even get 30-40% of the profit. Or there is a supermarket that wants to take Dabaco's products and then put the name of the supermarket's product, so the company doesn't do it.

Dabaco will not abandon the supermarket channel but only accept a maximum discount of 18-21% to sell.

The company only sells green eggs and omega-3 eggs in supermarkets, up to 80% of Dabaco's eggs are sold to confectionery businesses at higher prices.

Dabaco has developed a number of consumption channels such as traditional market channels, trade union channels, and kitchen channels. Last year, there was access to sell products in many buildings.

At the end of the meeting, all proposals were approved.

Source:  https://vietnambiz.vn