Việt Nam News | 3 December 2024Foreign investors set sights on Việt Nam's food processing sector
Việt Nam's potential in the agricultural processing sector has caught the eye of foreign investors, particularly from Japan, seeking partnerships and acquisitions.
A new product line of KIDO. — Photo courtesy of the company
HÀ NỘI — The activities of mergers and acquisitions (M&A) in the food processing industry have recently been vibrant and poised for further growth, as numerous enterprises within the sector exhibit significant potential for development.
One of the latest developments involves Nutifood, a nutritional foods corporation, which has successfully completed the investment procedures to acquire a 51 per cent stake in Kido Foods.
With this ownership share, Nutifood assumes the role of the parent company, gaining control over Kido Foods, the entity behind the well-known ice cream brands Celano and Merino.
This investment in Kido Foods enables Nutifood to expand into the realm of health-oriented nutrition. Simultaneously, the deal empowers Nutifood to oversee a distribution network in the frozen food sector, with hundreds of ice cream freezers spanning from traditional retail outlets to modern chains, restaurants, hotels and entertainment venues nationwide.
Meanwhile, KIDO Group, renowned for its prowess in the M&A domain, has previously sealed an agreement to acquire the leading steam bun brand Thọ Phát.
By the end of the third quarter of 2023, Thọ Phát was recognised as a subsidiary of KIDO, with a 51 per cent ownership stake, equivalent to an investment value of VNĐ810 billion (US$31.9 million).
In early October 2023, KIDO injected an additional VNĐ269 billion, increasing its ownership share in Thọ Phát to 68 per cent, indicating an expenditure of nearly VNĐ1.1 trillion for the complete acquisition of Thọ Phát's steam bun enterprise.
By the end of 2023, several buyout deals, including the acquisition of a 100 per cent stake in Vietnamese food distribution companies by Japanese enterprises, have transpired.
This trend underscores the robust entry of foreign companies, particularly those from Japan, into the Vietnamese food distribution market.
Specifically, New Viet Dairy, the largest wholesale food trading company in Việt Nam with a 40 per cent market share, has successfully transferred all its shares to Sojitz Group and its affiliates. Details regarding the sale price have not been disclosed.
Sojitz is also collaborating with Vinamilk and Vilico to invest in livestock farming, processing and distributing beef products in the country for both domestic and international markets. The projected scale of this collaboration across various stages is estimated to reach US$500 million, equivalent to VNĐ11.5 trillion.
Additionally, Marubeni, a Japanese trading company, has acquired a minority stake of significant importance in AIG Asia Components, a leading food ingredient supplier in Việt Nam.
Attracting foreign investors
This year, Việt Nam's agricultural sectors are booming internationally, with expectations of continued growth in 2025. This has led to increased interest from major players and private foreign investors, who are investing heavily in Vietnamese companies through activities like M&A.
Recently, G.C Food JSC reported impressive financial results for the third quarter, with a 31 per cent revenue increase and an 84 per cent surge in profit after tax compared to the previous year.
Nguyễn Văn Thứ, Chairman of G.C Food, said that the processed export-oriented fruits and vegetables industry is thriving, with significant interest and investment offers from foreign funds and strategic partners, notably from Singapore.
Looking ahead to 2025, G.C Food is considering moving its listing to the Hồ Chí Minh Stock Exchange (HoSE) to raise capital for expansion while maintaining management control and honouring long-term strategies.
Việt Nam's potential in the agricultural processing sector has caught the eye of foreign investors, particularly from Japan, seeking partnerships and acquisitions.
Sa Kỳ Food JSC is among those receiving investment interest, prioritising cooperative offers and assessing compatibility for potential negotiations.
Foreign interest in M&A is creating opportunities for collaboration, job creation, technology transfer and product diversification. However, Vietnamese businesses must innovate, enhance capabilities and improve product quality to thrive in a competitive landscape. — VNS
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Vietnam Investment Review | 8 March 2023
The Vinabeef Tam Dao breeding and processing complex is the first project in the investment and collaboration plan between Vietnamese and Japanese high-tech agriculture corporations Vinamilk, Vilico, and Sojitz.
Sojitz and Vinamilk kick off the complex of breeding and beef processing Vinabeef Tam Dao
On the occasion of the 50th anniversary of diplomatic relations between Vietnam and Japan, the Vinabeef cattle breeding and beef processing complex has broken ground in Tam Dao with an investment totalling VND3 trillion ($140 million). The project has been funded through contributions from Vinamilk, its subsidiary Vilico, and Japanese investor Sojitz Corporation.
This is the first-ever cattle breeding and beef processing project in Vietnam, marking the cooperation of Vietnamese and Japanese companies in the high-tech agriculture industry. The MoU was signed at the end of 2021.
The project is located on an area of 75.6 hectares in Tam Dao district, Vinh Phuc province. The complex's two primary subdivisions are the cattle farm, which can house up to 10,000 cattle, and the refrigerated beef processing factory, expected to be in operation by 2024.
Masayoshi Fujimoto, president of Sojitz Corporation, said that this is a potentially major project in Vietnam for the corporation for at least the next five to ten years.
"According to an analysis of the beef industry in Vietnam, there is still a significant amount of untapped potential, as the demand for and consumption of high-quality meat products remains at a very high level. As the project is put into operation, we anticipate that it could usher in a new period of prosperity in the market," said Fujimoto. "In addition, Vinamilk and Vilico are large, well-known partners that have capabilities in the areas of resources, experience in the livestock business, operational expertise, and understanding of the market. When it comes to bringing the Vinabeef Tam Dao complex online, as well as upcoming projects in the future, we will make excellent partners because of how well we complement and assist one another."
The uniqueness of the Vinabeef Tam Dao complex lies in the fact that it is intended to be developed and operated using a closed 4-in-1 process, which includes livestock, production, processing, and distribution. By doing so, it will supply Vietnamese consumers with fresh chilled beef that is guaranteed safe for consumption.
Vinabeef's beef products will be processed in an ultra-clean environment on a closed, highly automated manufacturing line that can handle 10,000 tonnes of beef per year, utilising cutting-edge technology to ensure food safety standards are met. The distribution process will remain tightly managed, as is necessary to fulfill the criteria of the chilled supply chain, and full product traceability will be maintained to guarantee the highest standards of quality and safety from farm to table.
While discussing Vinabeef's development orientation, Mai Kieu Lien, general director of Vinamilk and chairwoman of Vilico said, "We expect this to be a prototypical case of collaboration between Vietnamese and Japanese businesses in high-tech agriculture, focussing on long-term sustainable development. This way, we can work towards our goal of making Vinabeef a household name in Vietnam, not just as a trusted brand in the beef industry, but as a provider of high-quality foods for both domestic consumption and international export."
