Daesang has acquired Duc Viet Food for $32 million. Photo: Guu.vn
South Korea’s food-making conglomerate Daesang Corp. has announced it has completed the acquisition of a 99.99% stake in Vietnam
-based meat processor and distributor Duc Viet Food JSC for $32 million in September, in a move to expand its presence in Vietnam’s fast-growing food processing market.
Daesang will make the first Korean firm to enter the chilled sausage market in Vietnam, where local and foreign players such as the Philippines’s San Miguel Corp., Japan’s Nippon Ham Group and Thailand’s CP Foods are competing fiercely for shares.
With the acquisition, the Korean food maker expects to reap 50 billion won ($42.33 million) in annual sales from the meat processing business in Vietnam by 2020, according to Pulsenews.co.kr.
According to Daesang, Duc Viet Food, which mainly makes processed meat products such as hams and sausages, is a small, but sound company with 16 billion won ($13.6 million) in total assets and $5.93 million in liabilities. The Vietnamese company posted a net income of $1.69 million and $26.24 million in sales last year.
According to market intelligence agency Mintel Group Ltd., demand in processed meat products in Vietnam reached 580 billion won ($491 million) in 2015. Chilled sausages made up the largest share of 23%, followed by shelf stable sausages with 19% and Vietnamese traditional sausage with 18 %.
Established in 2000, Duc Viet Food now has a registered capital of $5.82 million. Founder Mai Huy Tan was the largest shareholder with ownership of 28.62% as of May 2016.
Daesang has been present in Vietnam since 1994, with its major business being MSG processing under the Miwon brand.