Firm jointly established by Vietnam’s Kido, Vinamilk disbanded
Monday, December 05, 2022, 16:02 GMT+7
Vietnamese dairy giant Vietnam Dairy Products JSC (Vinamilk) and packaged food producer Kido Group Corporation announced the dissolution of their ice cream and non-alcoholic beverage joint venture, Vibev Food and Beverage Joint Venture Company Limited, after nearly two years of operation.
The dissolution decision was announced by Kido Group Corporation chairman Tran Kim Thanh and Vinamilk CEO Mai Kieu Lien.
Thanh attributed the dissolution to “the impact of the global economy, unpredictable fluctuations in the domestic market, and changes in Kido Group’s development orientations."
Meanwhile, Vinamilk CEO Lien said Vibev was scrapped due to changes in business development orientations of both Vinamilk and Kido.
As publicized by the Ho Chi Minh City Stock Exchange (HoSE) early this month, Vinamilk will work with Kido and Vibev with a spirit of cooperation to complete dissolution procedures in line with the law.
Vinamilk and Kido on June 9, 2020 announced the establishment of their joint venture Vibev, specializing in manufacturing and trading beverages, such as tea, milk tea, ice cream, and frozen food.
On March 1 last year, Vibev was officially founded with an initial investment of VND400 billion (US$16.4 million), to which Vinamilk and Kido contributed VND204 billion ($8.4 million) and VND196 billion ($8 million), or 51 and 49 percent, respectively.
At the time, Vibev general director Mai Xuan Tram said that the non-carbonated beverage sector in Vietnam had extreme potential. Most suppliers of fresh drinks were small with low technology and operated on a small scale.
Therefore, the joint venture was expected to dominate the market based on the strengths of Vinamilk and Kido, thus becoming a leading company in non-alcoholic beverages in Vietnam.
According to Kido’s consolidated financial report, its investment in Vibev fell to VND160 billion ($6.6 million) at the end of the third quarter of this year but its holding was still maintained at 49 percent.
It can be inferred that Vibev has suffered from an accumulated loss of nearly VND73 billion ($3 million) after nearly two years of operation.
A report by SSI Securities Corporation showed that although the input cost increase has not been completely reflected in the consumer price index (CPI) of Vietnam, consumers can see the price hikes.
Food and beverage enterprises have increased the sale prices of their products by 2-10 percent on average.
The prices of these firms’ key input materials have also risen over the same period last year, such as flour by 30-40 percent, sugar by 30 percent, soybeans by 20 percent, and palm oil by 44 percent.
The beverage market witnessed intense competition among local and international brands.
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