Vinacafe Bien Hoa looks for a market caffeine high

Both companies claim leadership in the production of instant coffee and boast of bigger ambitions ahead.  While Trung Nguyen is touting its progress in exporting instant coffee to the growing Chinese market and elsewhere, Vinacafe -now part of the Masan Group empire - is talking more about the domestic market.

“We have ambitious plans to hold up to 80 per cent of the instant coffee market and 51 per cent of the roasted ground coffee market in Vietnam by 2016,” said Vinacafe Bien Hoa deputy CEO Nguyen Thanh Tung.  

The early performance of its new flavoured instant coffee brand, called Wake-up, has been a source of encouragement.  The southern Dong Nai province-based company’s 2016 vision envisages it among the top three largest listed companies in Vietnam’s food and beverage industry, he added.

Coffee has become a major engine of  Vietnam’s economic growth over the past 15 years, as the country transformed from a minor exporter raw coffee beans into a powerhouse that rivals Brazil for global leadership.  With companies like Trung Nguyen and Vinacafe leading the way, Vietnam has moved up the industry’s value chain by roasting and grinding coffee for both domestic and foreign markets. Vietnam’s strong, harsh “Robusta” beans are especially suited for instant coffee.

For Vinacafe, a major step for the ambition is to put online its third instant coffee plant in the first quarter next year, designed to produce 3,200 tonnes of unflavoured instant coffee a year.  

“Together with 1,200 tonnes of unflavoured instant coffee from our two operating plants, we will provide 4,400 tonnes a year in all,” said Tung.

The third plant is located in the province’s Long Thanh District, with construction starting in 2011. “And we consider 2012 a year of big investments, calling for investors.”

Last October, Masan Consumer bought a 50.25 per cent stake in the company. Vinacafe Corporation, the parent company of all Vinacafe firms in Vietnam, holds 37.3 per cent of the Bien Hoa member, and other shareholders own the balance.

Tung said Vietnam’s coffee consumption in 2011 was estimated at VND11 trillion ($529 million), with VND4 trillion (over $192 million) from instant coffee and VND7 trillion ($336.6 million) from roasted and ground coffee.