Photo: Duc Anh
South Korean food maker to buy 99.99 per cent of Duc Viet Food JSC next month.
South Korean food company Daesang Corp. is set to acquire 99.99 per cent of one of Vietnam’s leading meat processors, the Duc Viet Food JSC, for $32 million, according to Dealstreetasia.
Daesang will expand its foothold in Vietnam’s growing meat processing market with the deal, to be conducted on August 5.
VET contacted Duc Viet but was told by its PR Department that it would make no comment until an official announcement has been made.
Daesang currently owns three factories in Vietnam.
Established in 2001, Duc Viet specializes in manufacturing and distributing meat products, sausages, spices, and instant food. It has total assets of $5.99 million. In 2015 it earned $26.5 million in revenue and $1.7 million in net profit.
Starting operations in 1956, Daesang specializes in food and seasoning manufacturing, including soybean paste, samjang, marinade, soy sauce, soups, and Chinese noodles, among others. It first entered Vietnam in the 1990s with a seasoning manufacturing plant. One of its key products in Vietnam is Miwon monosodium glutamate (MSG).
In 2010 the Miwon Vietnam JSC was entangled in a scandal relating to environmental pollution after dumping wastewater into the Red River, which runs through Hanoi. Fortunately the discharge had little effect on the river’s water quality and only caused a foul odor.
Vietnam’s food market is witnessing increasingly fierce competition between sausage makers, with many famous names such as Vissan, Duc Viet and CPV fighting it out.
It’s clear why more and more companies are producing and trading in sausages. Vissan is well known both domestically and internationally for its various foodstuffs such as canned and processed foods, sausages, ham and frozen meat, which partly shows the greater popularity of sausages in the country.
Although Vissan and Duc Viet are major sausage manufacturers in the local market they still face stiff competition from other heavyweight opponents such as CPV.
All are now developing the feed - farm - food (3F) model, as are many other food producers, including the Dabaco Group and the Massan Group. As Vietnamese consumers are often confused by information about food contamination, the 3F model helps businesses obtain a competitive advantage as consumers tend to buy products with a clear origin.