VietNamNet Bridge – Despite the economic recession and the gloomy stock
market, the shares of consumer goods enterprises have always been attractive in
the eyes of foreign investors.
Ming Lu, Asia-Pacific Director of KKR, an US investment fund, said that when
seeking the investment opportunities in the region, the fund’s managers paid
attention to many markets and many business fields, but they finally decided to
pour money into the consumer goods production in Vietnam.
He said that KKR has been convinced by what the Vietnamese market has – a large
market with 90 potential consumers, the rapid urbanization speed, and the young
population with increasingly high income. All that factors have made Vietnam a
brilliant point in the regional investment map.
KKR has decided to funnel $200 million into Masan, a big consumer goods group,
after it inked the $159 million investment deal in 2011.
It’s obvious to everyone that the Vietnamese stock market is now gloomy with the
stock prices having fallen dramatically. But the US-based fund does not think
this is a big problem.
Ming Lu said that investors always need to keep long term vision when investing
in newly emerging markets. Meanwhile, KKR does not follow monthly or quarterly
business strategy, but its business plans last for several years.
Other investors have the same viewpoint as KKR’s, which explains why food and
consumer goods have always been leading the merger and acquisition deals in
terms of the number of affairs and the value of each deal.
Toshiaki Muramoto, Deputy General Director of Technopia Vietnam, which makes
Jumpo brand mosquito repellent products, said in the eyes of Japanese investors,
the consumer goods industry in Vietnam is like a budding flower which is very
attractive.
“Vietnam’s economy has been developing strongly; the consumption level has been
increasing steadily. Especially, Vietnamese like new products,” he said, adding
that Fumakilla group spent eight million dollars to buy the factory from the
Malaysian partner. The group plans to launch new products into the market, while
having installed more machines and equipments at the factory in Vietnam.
The latest report by Nielsen released in January 2013 showed that the Vietnamese
consumer goods market is the fastest growing market in the region with the
growth rate of 23 percent, surpassing India with 18.8 percent and China with 13
percent.
Ly Truong Chien, a well-known economist, said the Vietnamese consumer goods
market has been growing even in the economic recession, because it has just been
developing in the last few years, while the demand from people is really very
high.
A survey by Kantar Worldpanel Vietnam showed that Vietnamese are willing to
spend twice as much for FCMG on Tet holiday, and that the economic difficulties
have only led to the changes of the consumption behaviors of people, while they
have not reduced the demand for shopping and buying things to give others as
presents.
The high demand explains why consumer goods enterprises still have been living
well, while others have got dissolved, or have been on the verge of bankruptcy.
Vinamilk, the dairy producer, has reported the total turnover of VND27,300
billion in 2012, an increase of 23 percent over the year before. NutiFood, also
a dairy producer, has reported the 30 percent increase in the turnover. Analysts
believe that the milk market would see higher growth in 2013, when more and more
Vietnamese at different ages use dairy products. Kinh Do Group, a sweets
manufacturer, has reported the 52 percent increase in turnover in 2012.
Nguyen Tan Phong, Public Relation of Tan Hiep Phat Group, affirmed that the
demand for drinks is always high. If noting that every of the 90 million
Vietnamese people drink three bottles of water a day, one would see how big the
market could be.
DNSG