Two weeks ago, AIG Asia Ingredients Corporation (AIG) made the announcement that Marubeni Growth Capital Asia Pte. Ltd. (MGCA) has become a strategic partner by acquiring a substantial minority interest in the company.
Post-transaction, MGCA will maintain its focus on Southeast Asia, driven by key underlying consumer trends, and it remains dedicated to creating value with its investee companies in the sector.
Bharat Sarma, president and senior managing director of MGCA, commented, “Food and functional ingredients play an increasingly critical role in the food sector, catering to consumer trends and changing lifestyles. AIG is strategically transforming along multiple dimensions, including innovation, solution development, natural foods, and branded packaged food products.”
Established in 2001, AIG is engaged in the supply and manufacturing of food ingredients and packaged food products in Vietnam, with significant investments in innovation centers and food ingredient manufacturing facilities.
MGCA, a wholly owned Singapore-based subsidiary of Marubeni Corporation, operates as a platform focusing on investing in the consumer sector in Southeast Asia.
In a separate development, food producer KIDO Group has invested over $40 million in acquiring Tho Phat Food Processing Company.
KIDO initially announced the acquisition of a 25 percent stake in Tho Phat in April, and by the end of September, it increased its ownership ratio to 51 percent, amounting to an investment value of $33.3 million. The following month, the food producer further invested $11 million in Tho Phat, raising its ownership to 68 percent.
KIDO’s CEO Tran Le Nguyen stated, “Tho Phat will be an important piece of KIDO’s strategy of expanding its cake segment. Alongside its member companies, we aim to become one of Vietnam’s foremost food suppliers and expand into overseas markets.”
In another move, Nafoods Group JSC has acquired 99.9 percent of the assets of vegetable processor Nghe An Food Products JSC for approximately $12.75 million.
Phong Quach, head of consulting at Ipsos Strategy3 Vietnam, highlighted, “Numerous signals show that, besides the local consumption market, exports will be a major driver for the food processing industry and M&A activities in Vietnam.”
Quach added, “Key players now acquire a significant share in the raw materials supply upstream sector, which means they can manage raw materials in a way that can comply with the strict standards of importing countries. Lastly, Vietnam’s demand for processed food products is still small compared to the global average, indicating that opportunities abound.”
The dynamic environment is not limited to the food processing segment but extends to beverages as well. Growtheum Capital Partners, a Singaporean private equity firm, successfully completed a two-tranche investment totaling approximately $100 million in International Dairy Products JSC (IDP).
This investment included a secondary share tranche and a private placement tranche, wherein Growtheum acquired an aggregate 12.6 percent stake in IDP.
Earlier in 2023, Swire Coca-Cola completed its acquisition of Coca-Cola Beverages Vietnam Ltd., a bottling subsidiary.
According to Colliers, Vietnam has emerged as a promising investment destination for the food and beverage industry compared to neighboring countries in Southeast Asia. Expenditure on food services is also substantial, with people spending more than $360 per month on average, according to the report.
Market survey company Mordor Intelligence forecasts that the industry in Vietnam will achieve a compound annual growth rate of up to 8.65 percent between 2021 and 2026.