By the end of the third Quarter of this year, the company will launch its new instant noodle product and promote the production of coffee and cooking oil.
On June 30th morning, at the shareholders’ meeting of Kinh Do Joint Stock Company (Listing Code: KDC), Mr. Tran Quoc Viet, Deputy General Director said, after five years of preparation, in the forseable future, the company will pursue strategies to diversify its categories and expand product portfolios.
Accordingly, Kinh Do will launch three new categories: instant noodles, cooking oil and coffee. Regarding instant noodle, Mr. Viet said, the company would forge a comprehensive partnership with Saigon Vewong Company Limited (which possesses the A-One brand for noodles and MSG). Currently, the market size of the Vietnamese noodle industry is about VND 22, 340 billion. For cooking oil and coffee, the company will buy shares from 2 domestic companies namely the Phindeli coffee company and Vietnam edible oil corporations (Vocarimex). The estimated market size of for instant coffee alone is more than VND 4.750 billion and it grows at 15-20%. The scale of the cooking oil market stands at more than VND 22,300 billion.
When asked about Kinh Do’s partners and new businesses, the Company’s leader said by the end of the third Quarter, the company would launch its new instant noodle product. Kinh Do’s instant noodles are fried one because the demand for this type of product remains high. As for non-fried noodles, even though it is able to meet the market demand, it is not the right time to launch.
They have finalized the procedures to purchase shares from two domestic companies to partner in coffee and cooking oil production. However, at this point, the company is unable to disclose further information. The company is now controlling Phindeli. As for Saigon Vewong, Kinh Do does not make any investment, but cooperate on mutually beneficial basis.
In order to successfully implement these plans, Mr. Viet said the company would reorganize the bakery and confectionery section by applying a separate management mechanism. More specifically, the company will transfer all its assets, interests and business rights and obligations from KDC to Binh Duong Kinh Do JSC (BKD). The Company will also transfer certain assets, interests, other rights and obligations related to the business operation of Kinh Do Bakery Co., Ltd from Kinh Do (NKD) to the KDC.
Then, KDC will transfer its entire investment in NKD to BKD. Binh Duong Kinh Do will issue shares to increase chartered capital in order to register the transfer of all assets.
At the meeting, shareholders approved the revenue plan for this year. Specifically, the company set a sales target of VND 5.150 bn, 12.9% higher than the same period last year; Pre-tax profit is expected to reach VND 660 bn, 6.6% higher. This year’s dividends will be kept at 2013’s level.
In the first Quarter, Kinh Do’s revenue increased slightly over the same period, reaching VND 825 billion with VND 32.7 billion of earnings before income taxes, approximately equal to the same period in 2013.
In 2013, the company recorded the revenue of more than VND 4.561 billion. Profit before tax reached VND 619 billion, exceeding the target assigned at Shareholders' meeting earlier this year. Kinh Do’s after tax profit reached VND 493 billion, up 40% compared to 2012. The company’s dividend will be paid 20% in cash, equivalent to VND 2,000 per share.