Big companies buying smaller enterprises in bid for dominance

More corporations are buying shares in enterprises in the same business fields in an effort to become the dominant players in the market.

big companies buying smaller enterprises in bid for dominance hinh 0
TTC Sugar has poured capital into a series of companies
Kido Group has announced it has acquired 51 percent of shares of Golden Hope Nha Be from Malaysian Sime Darby Group.

The deal, plus the controlling stake in Vocarimex and Tuong An, has allowed Kido to expand its cooking oil market share and become an equal rival to Cai Lan, which holds 40 percent of market share, according to Euromonitor.

In the sugar industry, TTC Sugar has poured capital into a series of companies in the same industry in recent years. Bourbon Tay Ninh, Bien Hoa Sugar, Ninh Hoa Sugar, Gia Lai Sugar & Thermopower, Tay Ninh Sugar and HAGL Sugar are now ‘under the same roof’. TTC Sugar is leading the sugar industry with 40 percent of domestic market share.

In the home appliance retail sector, The Gioi Di Dong (MWG) has become dominant in the market with 740 Dien May Xanh shops, 10-12 times more than that of other retail chains such as Cho Lon and Nguyen Kim.

Analysts say the home appliance retail battle field has entered a ceasefire period after a decade of fighting. Dien May Xanh, a brand of The Gioi Di Dong, has become the winner with 35 percent market share. 

In the mobile phone & tablet retail sector, The Gioi Di Dong and Dien May Xanh have market share equal to all other rivals, according to GfK.

Kido’s CEO Tran Le Nguyen said the competition in the cooking oil industry is cutthroat, especially since the import tariff was cut to zero percent in May 2017. This prompted foreign investors to invest in Vietnam and increase imports for domestic sale.

In 2015, Cai Lan held 39.2 percent of market share, leaving the second largest producer, Tuong An, with 16.3 percent of market share, far behind, according to Euromonitor.

However, the M&A deals made by Kido have helped it narrow the gap.

After taking over Golden Hope Nha Be, Kido can now solve problems in pricing and input material. At least 90 percent of materials for the industry are still fed with imports. As Golden Hope’s factory is near the port, Kido will have big advantages in importing materials from the US, Canada, South America, Europe and Malaysia.

As for TTC Sugar, its chair Dang Van Thanh said expansion is the best way for TTC Sugar to lower the sugar price and improve competitiveness with sugar imports, especially Thailand’s.


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