TIARA to break Vietnam’s veggie oil market

Lee Nio Kwee, general director of ICOF Vietnam, a subsidiary of Musim Mas’ marketing arm ICOF Singapore, talked to VIR’s Khanh Tran on how the brand would position itself in the highly competitive market of consumer-packed oil in Vietnam, as well as Musim Mas’ on-going plan to construct a $71.5 million factory in the central province of Thanh Hoa.

Competition is very tough on the Vietnamese edible oil market, with state-run Vocarimex and its subsidiaries holding about 80 per cent of the market. How does TIARA intend to set itself apart?

Vietnamese consumers have become more and more concerned about the health impacts of oil. TIARA easily meets the world standard by bearing the ISO and HALAL certificates, having very little saturated fat, no cholesterol, no trans-fat, but containing Omega 3, 6, 9 and vitamin E. We believe that TIARA will surely meet even the highest requirements and earn the credibility and trust of consumers.

Seeing as competitive pricing appears to be the key to win over Vietnamese consumers. What price ranges are you targeting?

TIARA is a premium brand so we compete in terms of quality, not so much in price. We are also looking into the cheaper segments but it is not easy because right now the market has many brands circulating, meaning fierce competition..

Of course, we are aware that competition is tough in the premium segment, too. Simply, Tuong An and others are very popular and they have been present for a long time. But as Vietnam’s population grows, the market will follow in suit. At the same time, income per capita will grow as well. Our competitors have already expanded their refining capacities. We shall also try to capture a share of this growing market.

For the first two years TIARA is going to be imported from Malaysia. However, as soon as our factory in Thanh Hoa is ready, which is expected by the end of 2016, we are going to shift production to Vietnam.

Could you update the progress construction of this factory?

Two years ago, we were looking for opportunities in Vietnam to see how we could extend the group’s presence in the edible oil market. In 2013 we embarked on this mission. We went all around the country to find suitable for investment. Thanh Hoa has a deep sea port and is improving its infrastructure for handling bulk oils. Besides, the local authorities and Nghi Son economic zone welcomed us with a lot of incentives. We were attracted by that, obviously. Eventually, on June 10 of the same year, we received our investment certificate.

The plant is 5.5 hectares, located in the Nghi Son Economic Zone, under Nortalic, a joint venture between Vocarimex and Musim Mas Group with the total investment of $71.5 million, to which Musim Mas contributed 70 per cent and Vocarimex 30 per cent.

Initially we were going to aim for the capacity of 600 metric tonnes per day while ensuring the capability of increasing it to 1,500 metric tonnes, which would make it the biggest of all edible oil refineries in Vietnam.

Vietnamese veggie oil companies are importing up to 90 per cent of their raw materials included in the production lines. How are you planning to secure the necessary inputs to the factory?

The majority has to be imported because of the availability of supply and the better prices offered outside Vietnam. We shall also look into crude oil from domestic soybean crushers, as long as their prices are competitive.