Kido ups the ante for vegetable oil company

According to newswire Vnexpress, KDC will pay VND82,000 ($3.62) for each TAC share, VND4,000 ($0.18) higher than the initial price that it offered for TAC share. In addition, KDC will has requested to extend the date to complete the purchase to November 23 instead of the initially planned period between October 3 to November 15.

KDC expects to spend VND1.01 trillion ($44.6 million) for a 65 per cent stake in TAC, equalling 12.34 million shares.

KDC’s increasing stake acquisitions in vegetable oil manufacturing companies, the newest addition of which would be TAC, is part of its strategy to penetrate deeper into the food and spice market.

Earlier in June, KDC announced a plan to raise its stakes in cooking oil company Vietnam Vegetable Oil Industry Corporation (Vocarimex) from 24 to at least 51 per cent this year.

Once the Vocarimex purchase is completed, KDC will increase its stake in TAC to 92 per cent, as Vocarimex currently holds 27 per cent of TAC.

Earlier on June 22, 2015, KDC, Malaysia’s Felda Global Ventures (FGV), and Indo Trans Logistics Corporation (ITL) inked a memorandum of business exploration (MOBE) on forming a cooking oil joint venture.

Under the deal, the three parties would continue joint discussions over establishing the joint venture to produce and trade bottled cooking oil products in Vietnam.

In order to collect capital for its endeavor at the food and spice market, KDC sold its total stake in Kinh Do Binh Duong JSC, now Mondelez Kinh Do, its cake and candy arm. Notably, in 2014, KDC sold 80 per cent of its shares to Mondelez International for $370 million. In late August 2016, KDC completed the sale of its remaining 20 per cent for Mondelez International for VND2 trillion ($89.68 million).

KDC is currently manufacturing and trading ice-cream, dumplings, vegetable oil, and instant noodles. According to its consolidated financial report published on September 30, in the first three quarter of this year the company earned VND1.45 trillion ($63.97 million) in consolidated revenue and VND1.09 trillion ($49 million) in consolidated profit. The company expects to earn a revenue of VND1.8 trillion ($80.8 million) and a pre-tax profit of VND1.5 trillion ($67.3 million) by the end of this year.

Meanwhile, TAC specialises in manufacturing vegetable oil. According to its financial report published on October 19, in the first three quarters of this year, the company earned VND2.9 trillion ($127.9 million) in revenue and VND57.8 billion ($2.6million) in consolidated profit. Its products make up 20 per cent of the Vietnamese vegetable oil market.

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