Vietnam's sauce, condiment, and spice market is booming, with retail revenue reaching 39.9 trillion VND (US$1.6 billion) in 2023, a 9% increase from 2022, according to Euromonitor.

From 2009 to 2028, the spice segment is estimated to grow at a compound annual growth rate (CAGR) of 11% in value, reaching 65.8 trillion VND (2.6 billion USD).

Euromonitor also reports that Masan Group continues to lead the market, setting trends with a 30% market share due to its major brands and new product development. Masan dominates the fish sauce segment with a 70% market share and also holds over 60% in soy sauce and 50% in chili sauce.

However, another company in this sector has surged dramatically with grand ambitions and a 20-year vision.

Vietnam’s second priciest stock

In recent weeks, investors have witnessed the rise of CMF stock from Cholimex Food Joint Stock Company (Cholimex Food). On June 26, CMF shares jumped 15%, or 32,900 VND, to reach 252,400 VND per share.

This increase placed CMF in third place for stock market value on the Vietnamese stock exchange, surpassing Halong Beer and Beverage Joint Stock Company (UpCOM: HLB).

By July 8, CMF shares reached 262,000 VND per share, overtaking VE4 of VNECO4 Power Construction Joint Stock Company (HNX).

CMF currently holds the second-highest stock price in Vietnam, trailing only VNG Corporation (UpCOM: VNZ) of Le Hong Minh, which closed at 570,000 VND per share on July 8.

CMF's high stock price and continued upward trend with low liquidity are attributed to its concentrated shares, with only 8.1 million shares in total and three major shareholders holding 92.55% of the company's capital. Additionally, CMF boasts solid business performance with steady revenue and profit growth and consistently high dividends.

Cholimex entered the chili sauce market in the late 1980s and currently offers main products such as soy sauce, chili sauce, and fish sauce. It is a leading company in the industry alongside Masan, Trung Thanh, and Nosafood, distributing to popular channels like Metro, Co.op Mart, and BigC.

Promising prospects?

One of Cholimex Food’s standout features is its leading position in supplying spices to major brands like Haidilao, Pizza Hut, Popeyes, Domino's Pizza, and Jollibee, which are prominent fast-food chains from countries like the US, China, and the Philippines.

Regarding shareholder structure, Cholon Import-Export and Investment Corporation (Cholimex) holds 40.72% of Cholimex Food's shares, Masan Food Company Limited holds 32.83%, and Nichirei Foods Inc holds 19%.

In 2014, Masan Group of billionaire Nguyen Dang Quang, sought to increase its influence by publicly offering to buy 49% of Cholimex Food's shares at 90,000 VND per share. However, major shareholders Cholimex and Nichirei Food did not agree. Currently, Masan remains one of CMF’s major shareholders.

In 2023, Cholimex Food reported its 14th consecutive year of revenue growth, reaching 3.41 trillion VND (up 5.9% from 2022) despite global economic challenges and low domestic consumer demand. CMF’s profit in the last two years has exceeded 200 billion VND annually.

CMF aims for 3.85 trillion VND in revenue in 2024.

The company led by Chairman Huynh An Trung and CEO Diep Nam Hai has ambitious goals for the future, expecting revenue to be five times the current level in five years. In the near term, CMF targets 10 trillion VND in revenue, with significant contributions from a new frozen food line from its new factory. This new food processing plant in Vinh Loc 2 Industrial Park (Ben Luc, Long An province) has a total investment of 850 billion VND.

CMF benefits from the robust growth of the spice industry. Consumers are increasingly using convenient spice packets like sauces and marinades. Companies are also boosting exports to dozens of countries, including Europe, North America, Australia, and South Korea.

However, Cholimex Food faces strong competition from giants like Masan Group, Trung Thanh, and Nosafood. Recently, Nguyen Dang Quang’s Masan has aggressively expanded its market scale and enhanced brand value through the "Go Global" strategy to bring Vietnamese brands to the world. If other companies in the industry do not accelerate their development, they risk falling behind.

Manh Ha