Food market undergoing restructuring as more foreign companies arrive
19-12-2017

The Vietnamese food market is thriving, with 10.9 percent CAGR (compound annual growth rate) predicted by BMI Research for the 2017-2019 period.

vietnam economy, business news, vn news, vietnamnet bridge, english news, Vietnam news, news Vietnam, vietnamnet news, vn news, Vietnam net news, Vietnam latest news, Vietnam breaking news, Cau Tre, CJ, food market

The Vietnamese food market is thriving

Many visitors to the 2017 Vietnam Food Industry international exhibition noticed that ‘Cau Tre’, a familiar Vietnamese food brand, had changed to ‘CJ Cau Tre’.

‘CJ’ was added to ‘Cau Tre’ after the South Korean CJ Group took over Cau Tre in May 2017. Six months was long enough for CJ to turn the Vietnamese brand famous for tens of years into a Korean brand.

Sources said Cau Tre is not the only food company CJ is eyeing. The investor from South Korea is still considering buying a Vissan stake from Masan and eyeing other producers.

Before Cau Tre fell into CJ hands, the Vietnamese food market noticed a deal of Daesang Group, the owner of Miwon brand, taking over Duc Viet Food JSC, a well-known sausage brand, at $32 million.

The Vietnamese food market is thriving, with 10.9 percent CAGR (compound annual growth rate) predicted by BMI Research for the 2017-2019 period.

Another South Korean group, Lotte, is holding a 44 percent stake in Bibica, a sweets manufacturer.

Meanwhile, Mondelēz International became the new owner of Kinh Do after it spent $370 million to acquire the sweets manufacturing division of the group.

Sources said Singaporean, Thai and Malaysians are hunting Vietnamese food companies.

Ly Kim Chi, chair of the Food & Foodstuff Association of HCM City, said a number of Vietnamese food companies had been swallowed by foreign conglomerates.

Even large enterprises have fallen into foreigners’ hands because foreigners are willing to pay high prices to take them over.

Analysts say M&A activities are particularly hot in the food & beverage sector. BMI Research predicted a 10.9 percent CAGR for the food & beverage sector in 2017-2019.

Tran Anh Tuan, CEO of The Pathfinder, a consultancy firm, said companies can make a profit just after five years of investment if there is good cash flow.

He said Vietnamese food companies are eyed by not only financial investors and investment funds, but also by food conglomerates which are taking full advantage of the Vietnamese companies’ large networks to distribute their products.

Commenting about the sale of Vietnamese food companies to foreigners, Anh said there was no need for despair. “Instead of feeling regret, you should think about what would happen if Cau Tre had not sold its stake to CJ, and if Cau Tre had continued to shrink or lose market share?” Anh said.

Thanh Mai / VietnamNet

Other news.
SEND QUESTION