PAN Food seeks majority shareholding in Bibica

PAN Food under the PAN Group has registered to buy 1.12 million Bibica JSC shares, one of the largest confectionery companies in Vietnam, to increase its stake to 51 per cent.

With an offer price of nearly VND113 (US$5) per share, PAN targets to raise its ownership and long-term investment in the holder of the second-largest market in the confectionery sector, according to a representative from PAN Food.

It currently holds 6.74 million shares, or 43.73 per cent, and supports Bibica’s financial management.

If the offer is successful, the company will raise its stake to 51 per cent and surpass Lotte Confectionery to become the largest shareholder.

Vietnam’s confectionary sector is witnessing competition among many local and foreign brands. According to Business Monitor International (BMI), the sector has experienced relatively high and stable growth and is forecast to earn revenues of VND40 trillion (US$1.8 billion) in 2018.

Leading global producers, such as Orion, Nestlé, and Mondelēz International, are discovering the country is a solid production hub and, more importantly, a dynamic consumer market with great potential for growth.

According to a Euromonitor December 2016 report, however, rising consumer awareness about health and wellness have had a consistently negative effect on demand for sugar confectionery.

In terms of prospects, import taxes applied on sugar confectionery imported into Vietnam from other Asian countries, such as Thailand and South Korea, are expected to continue falling over the forecast period, based on trade agreements recently signed by the Vietnamese Government.

In a US$534 million deal, global confectionery powerhouse Mondelēz acquired an 80 per cent stake in the Kinh Do Corporation’s snack business, setting up the Mondelēz Kinh Do brand, on July 15, 2015.

The acquisition was seen as a means for Mondelēz to strengthen its route to Asia-Pacific markets and set foot in Vietnam. The business has a combined portfolio of Kinh Do mooncakes, Cosy biscuits, and Solite soft cakes, in addition to AFC crackers, Oreo cookies, Ritz crackers, and Cadbury chocolate products.

Another powerhouse, Korean confectioner Orion, best known for its Choco Pie brand, reported a record operating profit last year of US$283.6 million, up 9 per cent against 2015.