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Kinh Do, NutiFood form partnership
Kinh Do Corporation, which lists on the Ho Chi Minh City Stock Exchange, entered into a strategic alliance with milk producer NutiFood after the two signed an agreement on Sept. 24.
Under the agreement, Kinh Do will aquire a 30 percent stake in NutiFood, which is in the process of increasing its capital to 150 billion VND (9.3 million USD) from the current 120 billion VND. An initial public offering is planned for this year’s fourth quarter. Listing at the HCM City Stock Exchange is expected before the year ends.
Kinh Do Chairman Tran Kim Thanh said he wanted to expand operations into nutritious food, and NutiFood is a well-known brand name in that market. NutiFood has a large distribution network nationwide, including schools. Kinh Do also considers its young and competent managing staff an asset.
The partnership is not simply a financial investment by Kinh Do, said NutiFood General Director Le Trung Thanh.
The two will work together and support each other by drawing on their strengths, similar to deals struck by Pepsi and Unilever and Nestle and Coca Cola. “We’ll jointly carry out businesses in different fields to best tap markets in and outside Viet Nam,” said Thanh.
The two companies plan to cooperate on promotions, marketing programmes, material purchases and product development. “In the fourth quarter of this year, we’ll begin the first promotion and joint material purchase programmes. In the first quarter of 2008, a new product, nutritious cake, will be launched, Thanh added.
NutiFood has ambitions to expand its activities into real estate, in which Kinh Do already has a footing and can share experience and investment opportunities.
Kinh Do has around 30 markets overseas, and can help NutiFood to boost its exports.
NutiFood is among the top four milk producers in Viet Nam, according to market researcher ACNielsen. The company has a target annual growth rate of 30 percent until 2011, doubled the estimated 12 to 15 percent average rate for the market as a whole.
VNA
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