Kinh Do eyes Tribeco

Kinh Do aims to take over beverage company Tribeco

At last week’s press briefing to announce the acquisition plan, Kinh Do’s chief executive officer Tran Le Nguyen said his firm wanted to become the controlling shareholder in the bourse-listed Tribeco. Last weekend its stake in Tribeco reached 35.4 per cent.
“The plan to take over shares is continuing. We’re aiming to hold up to 51 per cent of Tribeco,” he said. “We intend to build Kinh Do into a conglomerate in the food and beverage sectors.”
If the takeover succeeds, it would be the first one of a publicly-listed company on the local stock market since it began operating in July 2000.
Tribeco is one of the big players in Vietnam’s beverage market, with a nationwide distribution network and a wide range of carbonated and non-carbonated drinks such as Tribeco soymilk, TriO fruit juice, Trimilk full-cream milk and Tri purified drinking water. The company reportedly gains an annual sale growth of 20 per cent.
Nguyen also said investing in Tribeco was a good way for Kinh Do to decrease possible risks due to the seasonal nature of his firm’s products.
“April to May is the low season for confectioners but the peak for drink makers,” he said. “It will be ideal to have a merger between us.”
Moreover, Kinh Do reckons it is more cost and time efficient to invest in Tribeco rather than establish a new concern, he said. Once Kinh Do becomes the majority stakeholder in Tribeco, as it fully expects to do, Kinh Do will expand Tribeco’s production capacity.
“We will set up two new beverage factories, on in the south and one in the north”, which save on transportation costs, Nguyen said. He added that his firm has already bought land in Hung Yen and Binh Duong provinces to build the factories, which are expected to be operational by late 2006 or early 2007.
Tribeco, for its part, hailed Kinh Do’s advances.
“It is quite normal business that Kinh Do wants to invest in Tribeco. I think the combination will help the two companies better tap their brand equities and distribution channels to bolster their sales,” said Tribeco CEO Phan Minh Co.
Asked about the partnership’s prospects, Co said: “The partnership is long term. We will join forces to promote our image to consumers, boost sales and expand market shares, and lead the local and regional foodstuff industries.”
In 2003, Kinh Do took over the Wall’s ice cream factory from Unilever, replacing the Wall’s trademark with Kido’s. Since then, the factory has grown 20 per cent.
Kinh Do, which has VND250 billion ($15.8 million) in chartered capital, is expected to list on the local stock exchange, where its offshoot North Kinh Do is already traded, by this month or December at the latest.
A number of foreign institutions, including British life insurer Prudential, Vietnam Opportunities Fund (VOF), and Singapore’s Temasek Holdings, hold stakes in Kinh Do. Kinh Do, which employs nearly 5,000 people, is one of the most successful branded food companies in Vietnam. It now has more than 150 distributors and 40,000 retail outlets throughout the country, together with over 25 bakeries in Ho Chi Minh City and Hanoi.
Its products are exported to scores of countries and territories around the world and can be found on the shelves of large supermarket chains like Wal-Mart, Costco, Sam’s Club and Albertson’s.
Retail Asia magazine selected Kinh Do among its top 500 retailers in the Asia Pacific last year.