Having sold 80% of its confectionery business to Mondelez International for around US$370 million, Kinh Do Corporation (KDC) has changed its name into KIDO Corporation, effectively abandoning its core confectionery operations.

A view of the general meeting of KDC last Friday.

At an annual general meeting of KDC last Friday, shareholders agreed on the company name change but keeping the stock code intact, KDC.

According to Tran Quoc Viet, deputy general director of KDC, the deal to sell 80% of its confectionery business to Mondelez International is complete and is waiting for regulatory approval from authorities.

A reliable source from Kinh Do said the deal might conclude the following month.

KDC has switched to making products like instant noodles, cooking oils and condiments bearing the brand Dai Gia Dinh.

KDC will pay cash dividend of 200% to shareholders after the deal. According to deputy general director of KDC Nguyen Xuan Lan, after all procedures are done, the firm would transfer the 200% dividend to investors.

KDC leaders said the money earned from the deal had been included in its 2015 profit.

This is also why the firm has set a revenue target of only VND3 trillion for this year, down 40% against 2014, but its pre-tax profit could amount to VND6.5 trillion, well above last year’s VND663 billion.

Besides the special dividend of 200%, KDC shareholders will receive cash dividend of 14% this year.

At the meeting, shareholders expressed concern over the steady decline of the KDC share price after its confectionery division was taken over by Mondelez. However, Tran Le Nguyen, CEO of KDC, said the firm was investing in the essential consumer goods sector with a clear business development strategy. He promised to bring KIDO revenue back to VND5 trillion over two years and profit to VND600 billion over three years.

Kinh Do had been a domestic confectionery market leader for years, but KDC found little scope for further expansion in the sector, so it decided to shift to the food and flavor sectors to meet huge consumer goods needs and become a household name.

KDC is seeking partners and products to carry out mergers and acquisitions deals in the essential consumer food field.

The firm currently has around VND9.57 trillion, with VND4.62 trillion for dividend payments, VND1.73 trillion for investments in food production and VND3.22 trillion to be spent on other investments, Viet said.

Last May KDC inked a deal with Saigon Ve Wong Co., Ltd to form a joint venture and build an instant noodle and spice factory at Vietnam-Singapore Industrial Park in the northern province of Bac Ninh.

Recently, the firm has entered into a cooperation agreement with Malaysia’s Fleda Global Ventures (FGV) and Indo Trans Logistics Corporation (ITL) to produce bottled cooking oils to supply the Vietnamese market.

KDC posted net revenue of VND4.95 trillion last year, up 8.6%, and pre-tax profits of VND663 billion.

SGT