Leadership change rocks Trung Nguyen’s boat

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A decision by the Binh Duong Department of Planning and Investment late last week annulled Vu’s role as the legal representative of Trung Nguyen Instant Coffee JSC, by revoking the company’s 8th amended business registration certificate, dated April 21, 2016 and restoring the 7th amended certificate dated November 28, 2013, which named his wife Le Hoang Diep Thao as the legal representative. Thao and Vu are undergoing divorce proceedings at the moment.

According to the Law on Enterprises, the legal representative, who can be either the chairman, a general director or director, represents the company to exercise its rights and obligations arising from business transactions. This person is responsible for representing the company when communicating with the public and decide important matters in its operations and its management, including personnel and use of the company’s bank account and seal.

Trung Nguyen Instant Coffee JSC’s flagship product is the G7 instant coffee, which for the last five years accounted for 5 per cent of the Vietnamese instant coffee market, according to data by market research company Euromonitor.

Euromonitor estimated Vietnam’s instant coffee market to total at VND5.5 trillion ($247 million) at the end of 2015. The two dominating brands were Masan Consumer’s Vinacafé and Nestle’s Nescafé, with market shares of 37.5 and 38.3 per cent, respectively, at the time.

Trung Nguyen Instant Coffee JSC produces the G7 coffee brand in two factories in Binh Duong and Bac Giang out of the total four owned by Trung Nguyen Group.

However, Thao owns other assets besides the instant coffee unit. In mid-December 2015, in response to rumours that the company temporarily stopped production of G7 instant coffee due to a conflict between Vu and Thao, Trung Nguyen Instant Coffee JSC issued a press release confirming that operations were still going on as usual.

The press release stated that Thao was the founder and general director of Trung Nguyen International Holding Pte. ,Ltd., a subsidiary in charge of marketing Trung Nguyen’s products abroad, and co-founder and co-owner of Trung Nguyen Coffee Group JSC, the coffee production unit.

It is unclear how the conflict is going to impact Trung Nguyen Group’s business.

Established in 1996, Trung Nguyen Group has been cultivating, processing, selling and exporting coffee and instant coffee. It also operates in real estate, tourism, and coffee shop franchising. The company currently has 1,200 coffee shops in Vietnam and Singapore. Trung Nguyen joined the instant coffee market in 2003 with the G7 brand.