Masan strengthens its consumer arm
Masan strengthens its consumer arm
Masan Group Corporation, one of Vietnam’s largest private businesses, yesterday announced a series of corporate initiatives to further strengthen its wholly-owned subsidiary Masan Consumer Holdings.
The move is part of Masan Group’s efforts to continue building and investing in Vietnam’s consumer sector.
Masan Group also announced that together with the new initiatives, Masan Consumer Holdings (MCH) shall have experienced a transformational year where it has emerged as the group’s primary platform to invest further in Vietnam’s consumer opportunities.
The initiatives that have occurred or are expected to be completed in 2014 include becoming sole owner of Masan Group’s interest in Masan Consumer, completing a landmark bond issuance and Entering the beer market.
Accordingly, Masan Group has restructured by consolidating its direct and indirect interests in Masan Consumer into MCH. By the end of 2014, MCH is expected to have further increased its ownership percentage in Masan Consumer.
In early December, MCH completed a landmark 10-year bond issuance, which raised VND2,100 billion at an 8 per cent fixed coupon rate. The bonds are the longest tenure and lowest cost issuance by a private sector company in Vietnam. The bonds are guaranteed by the Credit Guarantee and Investment Facility (“CGIF”), a trust fund of the Asian Development Bank (“ADB”), and is CGIF’s the first deal in Vietnam.
Meanwhile, MCH will become the sole and direct owner of Masan Brewery, which currently produces the Su Tu Trang beer brand. Previously, Masan Brewery was held directly by the Group. As a result, MCH will have another major vertical for growth as beer is a $4 billion consumer category in Vietnam.
In addition, other initiatives that have been announced and/or expected to be completed within 2014 at MCH’s subsidiary, Masan Consumer, include establishing Masan Beverage, Cholimex tender offer and sale of non-strategic assets. Following these initiatives, Masan Consumer has established a new subsidiary to consolidate its non-alcoholic beverage businesses and to better position it to win in the bottled beverage sector; is on track to become a major shareholder in Cholimex, a well-known sauces and condiments company in Vietnam, with brands that have been in the market place for nearly 30 years; and aims to improve its operational focus by divesting a non-strategic subsidiary, Minh Viet Packaging, which produces some of the Group’s packaging materials.
The initiatives outlined for Masan Consumer do not include ongoing M&A discussions. With its best-in-class operating platform, Masan Consumer is a strong position to advance the development of acquired businesses, which it has been able to achieve at Vinacafe and Vinh Hao.
To further sharpen the Group’s focus and demonstrate the role of MCH as a key strategic driver of future growth, Masan Group is in the process of strengthening its cash position by the sale of Masan Agri. The cash is expected to provide the Group with more resources and flexibility to support MCH’s growth and invest in transformational opportunities.
