Company agrees to terms with two Malaysian partners to form joint venture to dominate domestic market in packaged palm oil.
The Kinh Do Cooperation and Felda Global Ventures (FGV) and the Indo-Trans Logistics Corporation (ITL) from Malaysia signed a cooperative agreement on June 22, under which they will conduct discussions over the next six months on identifying strategies to capture Vietnam’s packaged oil market, leveraging on the strengths of all parties.
Although the total capital is yet to be disclosed, it is expected that Kinh Do will contribute 45 per cent while FGV and ITL will together contribute 55 per cent.
This is the next step in Kinh Do’s oil development strategy after it purchased shares in the country’s major oil producer, the Vietnam Vegetable Oils Industry Corporation (Vocarimex), and completes raising funds to become its controlling shareholder.
Kinh Do currently holds 24 per cent of Vocarimex and is expected to increase this to more than 51 per cent when its capital raising efforts are completed in the near future.
In the first stage the joint venture will focus on the distribution of oil and raw materials imported from Malaysia via FGV and ITL.
FGV is one of the largest palm oil producers in the world and has a role within the new joint venture of securing supplies of palm oil materials, while ITL will contribute to the joint venture through its logistics services and extensive transport network.