Vietnam-based dairy company Vinamilk is reportedly planning to establish a joint venture (JV) in Hanoi with Japanese trading house Sojitz to process and sell beef products.

With this new JV, Vinamilk intends to diversify into the growing domestic beef market, reported Nikkei.

Vinamilk will hold a 51% stake while the remaining 49% stake will be held by Sojitz.

The JV will initially import beef products from Japan and other parts of the globe, as well as distribute them to supermarket and restaurant chains in Vietnam.

The new JV will leverage Vinamilk’s sales network and Sojitz’s expertise in selling livestock products to establish its presence in the Vietnamese beef market.

The two companies could also expand their business beyond the boundaries of Vietnam.

According to Sojitz, Vietnam consumes 500,000t of beef a year.

It is estimated that the consumption of beef products is expected to increase with the growing population and income levels.

Earlier this week, Sojitz and Osaka Gas’ Sojitz Osaka Gas Energy (SOGEC) JV finalised a supply agreement with Acecook Vietnam (ACV) to provide natural gas to the latter’s food plants.

SOGEC is focusing on fuel switching from coal to natural gas.

Switching from coal to natural gas is expected to offset carbon emissions by nearly 76,300t over ten years.

This project will also be undertaken in cooperation with the Vietnamese and Japanese governments.