Vietnamese dairy producer TH Group will be the main developer of a US$2.7bn milk production plant in Moscow Oblast, following a deal it reached with Russian authorities last week, local media reported.

The project will be launched soon, after Thai Huong, chairwoman of TH Group, and Andrey Vorobyov, governor of Moscow Oblast, signed an agreement for the project in the presence of Vietnamese President Truong Tan Sang in Moscow on October 22, according to Dau Tu (Investment) newspaper under Vietnam’s Ministry of Planning and Investment.

According to the deal, the $500 million first phase of the high-tech plant, including a dairy farm and milk processing facility, is expected to begin in April 2016, meaning the first batch of Russian-made milk of the Vietnamese firm will debut next year.

The project of TH Group, modelled after the existing one in Nghia Dan District in the north-central Vietnamese province of Nghe An, will be completed by 2025, making it Vietnam’s largest agricultural project in Russia.

Once finished, the project, covering 140,000 hectares, will produce 5,900 metric tons of milk daily, or 1.8 million metric tons a year, from a herd of 350,000 cows.

On October 21, during a visit to Vietnam, Dmitriy Stepanenko, Minister of Agriculture and Food of the Moscow region, visited TH Group’s dairy farm in Nghe An.

The $1.2 billion farm, put into operation in October 2009, applies automatic and professional cow raising technology from Israel and a veterinary management process meeting New Zealand standards.

Currently, the farm has 45,000 cows, of which more than 22,000 are lactating at 30-40 liters per head every day.

The number of cows will be raised to 203,000 by 2020.

Stepanenko told Dau Tu that he was impressed by the scale of the farm and the professional qualification of the technical staff of TH Group.

"We have direct support worth three rubles per liter of milk produced by TH Group in Russia, an incentive that may be helpful for the firm's investment in the country," Stepanenko added.

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