Photo: Duc Anh
Bid to be made before year's-end for additional 27% stake.
KIDO Group Corporation has confirmed that it will bid to buy additional shares in the cooking oil giant the Vietnam Vegetable Oils Industry Corporation (Vocarimex) to increase its stake to 51 per cent from the current 24 per cent.
The bid will be made during the second half of the year, Ms. Nguyen Thi Xuan Lieu, Deputy CEO of KIDO, told VET. “It aims to consolidate the company’s revenue and profit as well as improve its business performance and stabilize its material sources,” she said.
The company’s ambitious target to acquire at least 51 per cent of Vocarimex was approved at its annual general meeting in mid-June, where the company’s Board of Directors described it as a “strategic move”.
Established in 1992, Vocarimex had total consolidated assets of VND2.4 trillion ($109 million) as at the end of March. Its unrefined cooking oil accounts for 94 per cent of total revenues and 89 per cent of Vietnam’s unrefined oil supply.
Vocarimex had 343 employees as at the end of 2015 and seven subsidiaries and associated companies. The State has a controlling stake in the Tuong An Vegetable Oil Company (Tuong An) and the Tan Binh Vegetable Oil Company (Nakydaco).
It also has three vegetable oil joint ventures: Golden Hope-Nha Be Edible Oils Company, the North Oils & Fats Industries Company (Nortalic), and the Cai Lan Oils & Fats Industries Company (Calofic).
Vocarimex also has a stake in a joint venture cosmetics company, LG VINA Cosmetics, and in a packing company, VMPACK. “Vocarimex has tremendous potential to develop but has not yet utilized its ability successfully,” Ms. Lieu said. “KIDO, along with Vocarimex, will improve the process of supply, maximize factory productivity and improve management at its affiliate companies and subsidiaries.”
KIDO will also support Vocarimex in improving its R&D ability and product distribution, Ms. Lieu added.
The Ho Chi Minh City-headquartered KIDO was previously known as Kinh Do Corporation but changed its name after selling 80 per cent of its subsidiary the Kinh Do Binh Duong JSC (BKD) to the US’s Mondelēz International in 2014 for $370 million.
KIDO also plans to fully divest from BKD by the end of this year by selling the remaining 20 per cent stake to Mondelēz International.
The company’s consolidated financial report for the first quarter of 2016 revealed total revenue of more than VND393 billion ($17.86 million), down 65 per cent against the first quarter of 2015. KIDO has over 600 distributors, 31 Kinh Do Bakery outlets, and more than 200,000 retailers selling its products throughout the country
Gross profit was almost VND160 billion ($7.27 million) in the quarter, a sharp decline of 60 per cent quarter-on-quarter. Consolidated net profit reached over VND28 billion ($1.2 million), down 6 per cent compared to the same period of 2015.
The group currently has 8,000 employees. “This cooperation between two companies will add value to each other, with KIDO helping Vocarimex maximize its competitive advantage, thus providing consumers with more choice and better quality products while also benefiting investors and shareholders of the two companies,” Ms. Lieu said, who is also Managing Director of Vocarimex.
Vietnam’s cooking oil market now has 40 companies producing and selling cooking oil products, 70 per cent of which are palm oil, 23 per cent soy bean oil, and 7 per cent vegetable oil, according to data from the Ministry of Industry and Trade.