Partnership with local firms to help Malaysia cooking oil maker enter Vietnam
Partnership with local firms to help Malaysia cooking oil maker enter Vietnam
Vietnam’s largest confectionery Kinh Do Corp. is teaming up with a local logistics firm and a Malaysian agricultural company to set up a joint venture to produce packaged oil.
Kinh Do, Malaysia's Felda Global Ventures (FGV), and Indo Trans Logistics Corporation (ITL) entered Monday into a memorandum of business exploration to examine the possibility of partaking in a business collaboration, the Malaysian firm announced the same day on its website.
The possible three-party partnership will work to build and operate a new business to manufacture and distribute branded, packaged edible oil in Vietnam, according to the announcement.
Dato’ Mohd Emir Mavani Abdullah, group president and chief executive officer of FGV, said the joint venture “will indeed be a stepping-stone for [us] to penetrate [the Southeast Asian] market.”
"This business exploration is in line with FGV’s Global Strategic Blueprint where we seek [a] significant position in [a] new location that is a major consumption center such as Vietnam,” he said in a statement.
Through the strategic partnership, the three parties will conduct joint discussions over the next six months about identifying strategies to tap the Vietnamese consumer packaged oil market, taking advantage of the strength of all parties.
"By leveraging on the strength of both Kinh Do and ITL, the strategic partnership has a huge potential to attain a leading position in this market,” said Dato’ Zakaria Arshad, head of palm downstream cluster with FGV.
Kinh Do and ITL have their own respective strengths in consumer foods business and in integrated logistics services, according to the FGV executive.
“This collaboration will also stretch our reach within the Indochina region and intensify our current presence in Southeast Asia,” he added.
Kinh Do CEO Tran Le Nguyen was also upbeat that the new joint venture will become a strong and successful packaged oil player with the combined strengths of the three parties.
The memorandum of business exploration is seen as Kinh Do’s next step to further penetrate the cooking oil industry, after launching its products under the brand Dai Gia Dinh An Hao late last month, according to the executive.
“This joint venture is the strategic cornerstone for Kinh Do to develop our cooking oil category as well as lay [a] foundation for the entire group to expand into [the] food and flavor segment,” he added.
"Kinh Do will leverage our extensive experience in building successful consumer brands trusted to ensure the success of this partnership.”
FGV will capitalize on its access to its high quality processed palm products for this venture, whereas the Vietnamese confectionery company will bring to the partnership its expertise in building consumer packaged food brands.
The Malaysian firm is the third largest palm oil producer in the world by planted acreage, according to The Star Online.
In the meantime, ITL, one of the leading logistics firms in Vietnam, will back the partnership with access to its “extensive storage, transportation and distribution network across the country,” said managing director Tran Tuan Anh.
