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“KDC’s strength in retail may help Vocarimex switch from producing mostly unrefined cooking oil with a very low profit margin to making higher quality and higher margin retail products,” VCBS said.
Earlier this year, state-owned Vietnam Vegetable Oils Industry Corporation (Vocarimex) sold out its 31.12 per cent IPO in July. The state will maintain 36 per cent and strategic investors KDC and VPBAnk Securities will take 24 per cent and 8 per cent, respectively. The remaining shares will be sold to company employees.
Vocarimex and its subsidiaries and affiliates hold a combined 85 per cent of the Vietnamese cooking oil market. Together they produce around 81 per cent of the nation’s refined cooking oil output.
The parent company’s revenue in the 2010-2013 period averaged VND3.9 trillion ($185 million) and profits came to a mean VND26.5 billion ($1.26 million); both have seen annual growth of 8 per cent and 42 per cent, respectively.
After going public the firm has targeted revenue growth of between 7 and 8 per cent per year on average, to VND5.625 trillion ($266.6 million) by 2016.
KDC, Vietnam’s biggest listed confectionary maker, is seeking to expand its business to cooking oil, instant noodles and sauces to make use of its nationwide distribution network for economies of scale.