What are Asian holding companies doing in Vietnam?

CJ of the Republic of Korea could not become Vissan’s strategic shareholder as it planned because Massan paid higher for Vissan’s stakes at the share auction.

However, analysts believe that CJ has no reason to give up the plan to attack the food processing market, which is highly lucrative. 

CJ bought Kim&Kim, a company that makes kimchi, while it has reaped fruits in animal feed manufacturing. They have every reason to think that CJ would target some certain food companies to implement its ‘from farm to dining table’ strategy.

Not only CJ, but the other best known Asian holding companies in Vietnam – SCG, Ayala and Central Group – have also been moving ahead with their merger and acquisition (M&A) deals to set foot in Vietnam’s important business fields.

While SCG and Ayala are making every effort to dominate the plastics manufacturing and water supply, Central Group is taking big steps to expand its business in the retail sector.

After quiet and cautious steps, the 103-year-old SCG has made its presence in about 20 companies in plastics and building material industries in Vietnam. Binh Minh and Tien Phong, the two Vietnamese biggest plastics manufacturers, both have sold stakes to SCG.

Ayala, the 200-year-old powerful conglomerate with assets of US$9 billion from the Philippines, has been reported as injecting big amounts of money into water supply companies in HCM City, including BOO Thu Duc, Kenh Dong Water Company, Saigon-Pleiku and the Vietnam-Philippines Infrastructure Investment.

Ayala became ‘a holding of holding company’ when it became a big shareholder in a Vietnamese holding company – CII Holding, specializing in transport infrastructure, water supply and real estate.

As such, analysts say, CJ is gearing up with projects in agriculture and food processing, SCG, taking advantage of its initial achievements, has tried to control the plastics and building material manufacturing, while Ayala has moved ahead with water supply & infrastructure projects. Central Group is trying to rule the retail market.

These are the four most attractive business fields in Vietnam in the new economic development period.

Central Group has ambitious projects. It now competes with TCC Holding and Aeon, a retailer from Japan, to acquire Big C, the large supermarket chain on sale. 

Prior to that, right after it set foot in Vietnam, Central Group successfully acquired a large proportion of Nguyen Kim to become an owner of the home appliance distribution chain. It also tried to acquire a 49 percent of stake of Pico, another distribution chain. However, it failed to implement the deal.