Exporters savour confectioneries

Bibica Corporation, one of Vietnam’s largest confectionery makers and exporters, is developing a cupcake production line valued at VND277 billion (US$12.18 million) and shifting machinery from its Hanoi factory to a new facility in the neighbouring Hung Yen province.

Bibica has also invested VND74.7 billion (US$3.28 million) to produce soft candy and VND15.4 billion (US$677,600) for making round cakes.

Another big firm, HaiHa Confectionery JSC is also developing a new candy and biscuit factory in northern Bac Ninh province with a total daily output of 61.58 tonnes.

Meanwhile, the local confectionery industry is also eyed by foreign firms. The Association of the German Confectionery Industry deems Vietnam as a potential partner.

Nguyen Trung Chinh, a representative from Global Hotels Management (GHM), said that Vietnam’s confectionery industry is in the spotlight for foreign investors. GHM will hold the world’s leading trade fair for bakery, confectionery, and snacks in September 2018.

“Our general director Dieter Dohr will visit Vietnam next month to seek collaboration with Vietnamese manufacturers and exporters,” Chinh said.

Many global brands such as Orion, Nestle, and Mondelez have secured a firm foothold in the Vietnamese market. As reported by Pulse-news, the Republic of Korea’s confectionary giant Orion Corp. is accelerating its foray into the Southeast Asian snack market as sales of its Vietnam confections exceeded 200 billion won (US$174.5 million) in 2016.

According to Orion, its Vietnam operation’s sales for 2016 jumped 24.1% year-on-year.

A report by London-based market survey firm Business Monitor International indicated that Vietnam’s confectionery industry maintains a health and steady growth with sales of confectioneries estimated to reach VND40 trillion (US$1.76 billion) by 2018.

The industry promises ample growth opportunities thanks to the current low consumption of three kilogrammes per capita, per year.

The Ministry of Industry and Trade reported that total Vietnamese confectionery exports grew 15% in 2016, of which candy and grain products contributed VND11.7 trillion (US$532 million). Most confectionery products were exported to the US, Chinese, and Cambodian markets in 2016.

Other important recipients of Vietnamese confectioneries were Japan and the Republic of Korea.

According to Bibica, Vietnam’s confectionery industry is recording a double-digit sales growth in major export markets. Among them, China will be a major importer of Vietnamese confectionery products in the next few years as it increases its stock by 40%.

However, in recent years, Vietnam has also seen a rise in imported confectioneries, especially high-end brands. It is estimated that imports of confectionery products account for 30% of the overall snack market. In 2016, Vietnam spent around US$250 million on foreign produced confectioneries, up 20% year-on-year.

According to a representative from Mondelez Kinh Do, in this new landscape, Vietnam’s confectionery market becomes more competitive for both local and foreign confectioners.

The intensifying competition will force firms to invest in new technology and develop new products to meet diverse demands.