Two companies come to terms over joint venture in essential food industry.
The Kinh Do Corporation (KDC) and the Saigon Ve Wong Co. (a member of the Taiwan Ve Wong Corporation) formally signed the paperwork on May 12 to form a cooperative joint venture to invest in the construction of a factory at the Vietnam Singapore Industrial Park (VSIP) in northern Bac Ninh province. This is the next step in KDC’s bid to dominate Vietnam’s essential food industry and is the result of successful cooperation between the two parties in the instant noodle industry over recent years.
KDC will hold 49 per cent of the ownership in the joint venture and Saigon Ve Wong 51 per cent. The factory will span an area of 2.5 ha with investment of $30 million. Construction will include four phases and expects to improve production capacity and ensure the steady supply of quality products to consumers.
“The joint venture with Saigon Ve Wong and the construction of the plant are important steps for KDC in preparing its internal capacity to penetrate further into the essential food industry, especially after the initial success of the ‘Dai Gia Dinh’ brand of instant noodles,” said the CEO of KDC, Mr. Tran Le Nguyen.
The joint venture is based on accessing the synergy available from the strengths the two companies possess. KDC is responsible for distributing and promoting products, while Saigon Ve Wong will handle production issues, such as manufacturing, technology, operations, and product research.
“The joint venture marks a historic and inexorable step that meets the expectations of both sides,” said Mr. Chen Kung Pin, CEO of the Taiwan Ve Wong Corporation. “It provides a solid foundation for the company to expand and develop new product lines in Vietnam.”
After the first factory at VSIP Bac Ninh is completed, Saigon Ve Wong and KDC expect to build additional facilities in the central and southern regions in the future to expand production capacity.
Founded in 1993 by a small group of entrepreneurs in Ho Chi Minh City, KDC began as a snack food company and became one of Vietnam’s largest confectionary companies in both sales and production value. It has built up an effective management system, advanced technology platform, and professional distribution system in the fast-moving consumer goods (FMCG) sector, with 300 distributors and 200,000 points of sale.
Established in 1990, Saigon Ve Wong Co. is a member company of the Taiwan Ve Wong Corporation and has advanced production lines for the manufacture of monosodium glutamate (MSG), instant noodles, rice products, and soup base seasonings. It owns popular brands such as A-ONE, Kung Fu, and Suc Song.
The Taiwan Ve Wong Corporation, meanwhile, was established in 1959 and had a technological cooperation agreement with a Japanese company called KYOWA HAKKO KOGYO Co. that furthered its new fermentation techniques with a patent for manufacturing MSG. This innovation helped the Corporation become the pioneer in Taiwan’s MSG industry.