Vinamilk decided to cooperate with Del Monte Philippines, Inc., a subsidiary of Del Monte Pacific Ltd. to establish a joint venture in the Philippines.
|Vinamilk establishes a dairy joint venture with Del Monte Philippines |
The total initial investment capital is $6 million, of which Vinamilk and its partners contribute 50 per cent each. The joint venture will import dairy products from Vinamilk, then market and distribute these in the Philippines through Del Monte Philippines, Inc. (DMPI).
The venture will co-brand as Del Monte-Vinamilk for its products to leverage the strong brand equity of both corporations. Both partners also plan to synergise the strengths of Vinamilk in production and Del Monte in distribution.
Particularly, Vinamilk is currently offering nearly 250 products, covering dairy and beverages products for not only the domestic market but also exports to 56 countries. Meanwhile, DMPI's products are available at more than 100,000 retail outlets in the Philippines.
The Philippines have the second-largest population in Southeast Asia, where dairy consumption per capita is increasing. The joint venture will provide an opportunity for growth as Vinamilk expands into a new market, and Del Monte expands its footprint in a new category with products that are consumed in Filipino households on a daily basis.
Mai Kieu Lien, CEO of Vinamilk shared, “We had studied many corporations before collaborating with Del Monte and believe that this is the most ideal partner due to Del Monte’s advantages in equity brand, distribution network, and its understanding of consumer demand for food and beverages in the Philippines. In addition, the both corporations share the same strategy to invest extensively in the dairy industry and offer Filipino consumers healthy dairy and beverage products that fit their tastes at reasonable prices.”
Luis Alejandro, COO of DMPI said that, "The Vinamilk-Del Monte cooperation is a union of market leaders with heritage and solid track record in their sector. Vinamilk is the leading dairy company in Vietnam and Asia, with many advantages to compete."
"I believe, the success of this joint venture is based on three factors. Del Monte has deeply studied the market and competitors to develop advantages. We have quality products that meet the nutritional needs of Filipino consumers, and also have a marketing plan. Moreover, we've already established a strong distribution network as well as communication plans that ensure consumer usage and loyalty," he added.
At the end of July, Vinamilk finished the production of the first order for the joint venture and exported its products to the Philippines, where they are expected to be on the shelves in September. Revenues in the first year are estimated at around $8.8 million.