Vietnamese corporations have made great strides in the agricultural sector. Many deals have been successful and there are also ongoing deals that promise to create new "empires" in the region.
Representative of Dabaco Vietnam (DBC) Nguyen Nhu So revealed that several large corporations had proposed cooperating with DBC in the field of Livestock activities.
During the recent meeting with investors, DBC Chairman Nguyen Nhu So said that some domestic corporations had proposed cooperation with DBC in the field of livestock and wanted to hold 60% of DBC shares. DBC currently ranks first in the country for pig productivity, with more than 40,000 sows and a closed processing factory with 60,000-70,000 pigs, second only to the Thai group CP for pork in Vietnam.
In 2020, Dabaco earned revenue of over VND10 trillion (up nearly 40%), while after-tax profit increased nearly 5 times to VND1.4 trillion.
Vietnamese giants built agricultural empires
Meanwhile, Masan Group of billionaire Nguyen Dang Quang has invested heavily in meat processing and distribution in recent years, under the brand name Meat Deli. Recently, Masan Meatlife has expanded its operations into the chicken market through a 51% stake in 3F Viet Joint Stock Company.
By the end of 2020, total assets of Masan Meatlife increased by VND3.2 trillion to nearly VND18 trillion. Masan Meatlife has 3 directly-owned subsidiaries, and 17 indirectly-owned and associate companies. Its indirect-owned companies are all big names such as International Agricultural Nutrition Joint Stock Company (Anco), Vietnam - France Animal Feed Producing JSC (Proconco), or affiliated companies such as Vissan, where Masan Meatlife holds 24.9%.
Masan's meat segment grew strongly in 2020, thanks to brand expansion at 1,606 points of sale in both the South and North, in VinMart, VinMart +, supermarket chains Coopmart, BigC, Lotte, and Aeon.
The appearance of Vietnam's large meat processing enterprises is a good sign for Vietnam’s agriculture, which is weak in modern breeding, slaughtering and distribution.
More than a decade ago, Thai businesses came to Vietnam. Charoen Pokphand Group (C.P Group) of Thai billionaire Chearavanont stirred up Vietnam's agricultural market, from animal feed to pig slaughtering, chickens, eggs and processed products.
Masan made an impressive debut in the field of livestock and pork processing worth $10 billion. Masan Meat Life was also started and only a few months after launch, it achieved huge turnover. Its distribution network has also skyrocketed, partly thanks to the retail segment purchased from Vingroup.
In the past decade, many Vietnamese corporations have poured billions of US dollars into the agricultural sector with long-term calculations of building brands for Vietnamese agricultural products, and not thinking about making money in the short term.
Vinaseed (NSC) of Mr. Nguyen Duy Hung has recently been successful with some of the best rice brands in the world (such as ST25); and Mr. Doan Nguyen Duc (Boss Duc) - Chairman of Hoang Anh Gia Lai Group (HAG) has shaken hands with billionaire Tran Ba Duong of Thaco to build a new agricultural empire.
Boss Hien's T&T Group has also quietly entered the agricultural sector. T&T Group is a strategic shareholder of many State-owned enterprises, including a series of agricultural brands such as Vigecam, Vinafor, Vegetexco, Unimex and Vinafood.
Some billionaires have made big investment in agriculture with an ambitious plan to build a strong brand for Vietnam’s farm produce, but they do not expect to make a profit in the short term.