Foreign investors set sights on Việt Nam's food processing sector

A new product line of KIDO. — Photo courtesy of the company

HÀ NỘI - The activities of mergers and acquisitions (M&A) in the food processing industry have recently been vibrant and poised for further growth, as numerous enterprises within the sector exhibit significant potential for development.

One of the latest developments involves Nutifood, a nutritional foods corporation, which has successfully completed the investment procedures to acquire a 51 per cent stake in Kido Foods.

With this ownership share, Nutifood assumes the role of the parent company, gaining control over Kido Foods, the entity behind the well-known ice cream brands Celano and Merino.

This investment in Kido Foods enables Nutifood to expand into the realm of health-oriented nutrition. Simultaneously, the deal empowers Nutifood to oversee a distribution network in the frozen food sector, with hundreds of ice cream freezers spanning from traditional retail outlets to modern chains, restaurants, hotels and entertainment venues nationwide.

Meanwhile, KIDO Group, renowned for its prowess in the M&A domain, has previously sealed an agreement to acquire the leading steam bun brand Thọ Phát.

By the end of the third quarter of 2023, Thọ Phát was recognised as a subsidiary of KIDO, with a 51 per cent ownership stake, equivalent to an investment value of VNĐ810 billion (US$31.9 million).

In early October 2023, KIDO injected an additional VNĐ269 billion, increasing its ownership share in Thọ Phát to 68 per cent, indicating an expenditure of nearly VNĐ1.1 trillion for the complete acquisition of Thọ Phát's steam bun enterprise.

By the end of 2023, several buyout deals, including the acquisition of a 100 per cent stake in Vietnamese food distribution companies by Japanese enterprises, have transpired.

This trend underscores the robust entry of foreign companies, particularly those from Japan, into the Vietnamese food distribution market.

Specifically, New Viet Dairy, the largest wholesale food trading company in Việt Nam with a 40 per cent market share, has successfully transferred all its shares to Sojitz Group and its affiliates. Details regarding the sale price have not been disclosed.

Sojitz is also collaborating with Vinamilk and Vilico to invest in livestock farming, processing and distributing beef products in the country for both domestic and international markets. The projected scale of this collaboration across various stages is estimated to reach US$500 million, equivalent to VNĐ11.5 trillion.

Additionally, Marubeni, a Japanese trading company, has acquired a minority stake of significant importance in AIG Asia Components, a leading food ingredient supplier in Việt Nam.

Attracting foreign investors

This year, Việt Nam's agricultural sectors are booming internationally, with expectations of continued growth in 2025. This has led to increased interest from major players and private foreign investors, who are investing heavily in Vietnamese companies through activities like M&A.

Recently, G.C Food JSC reported impressive financial results for the third quarter, with a 31 per cent revenue increase and an 84 per cent surge in profit after tax compared to the previous year.

Nguyễn Văn Thứ, Chairman of G.C Food, said that the processed export-oriented fruits and vegetables industry is thriving, with significant interest and investment offers from foreign funds and strategic partners, notably from Singapore.

Looking ahead to 2025, G.C Food is considering moving its listing to the Hồ Chí Minh Stock Exchange (HoSE) to raise capital for expansion while maintaining management control and honouring long-term strategies.

Việt Nam's potential in the agricultural processing sector has caught the eye of foreign investors, particularly from Japan, seeking partnerships and acquisitions.

Sa Kỳ Food JSC is among those receiving investment interest, prioritising cooperative offers and assessing compatibility for potential negotiations.

Foreign interest in M&A is creating opportunities for collaboration, job creation, technology transfer and product diversification. However, Vietnamese businesses must innovate, enhance capabilities and improve product quality to thrive in a competitive landscape.