CJ Cheiljedang Corp (CJ), one of South Korea’s leading conglomerates and manufacturer of processed food, is reportedly interested in picking up a strategic stake in the Vietnamese state-owned food company Vissan, formally known as the Vietnam Meat Industries Limited Company, when the latter goes for an initial public offering (IPO), a report said.
Vissan, a member unit of the Saigon Trading Group, has been operating for 45 years, and its latest financials reveal an average annual sales of VND4.5 trillion ($209.3 million). It is known for Vissan sausage and ham products in the local market.
Meanwhile, CJ is already present in Vietnam through CJ Vina Agri Co Ltd, which was established in 1999 and focuses on animal feeds.
Van Duc Muoi, general director of Vissan, told the Dau tu (Investment) newspaper: “CJ expresses its interest in our company unilaterally, while we have no intention of selling shares. We are working to be equitised (go in for an IPO) this year.”
Although Muoi did not reveal Vissan’s criteria for a strategic partner, he said that CJ could be a potential investor because it has “strong investment” in Vietnam and could help it achieve a leading position in the food industry.
Vissan has hired VietCapital Securities Company as its consulting agency for the listing process. However, the details of the initial public offer (IPO) have not been determined yet, even as the state-owned firm expects to quickly define its corporate value so that it can implement the IPO within this year.
CJ is among investors who have made public their intention to purchase shares in a company that is scheduled to be equitised (listed). Most strategic partners of state-owned businesses do not often reveal their plans until the time of the IPO, and are usually evasive about becoming a strategic shareholder.
This move is an indicator of the Korean investor’s ambition to consolidate its business in Vietnam. Jay Hyun Lee, chairman of CJ, the spinoff from Korea’s largest conglomerate Samsung, said that Vietnam plays a vital role in the group’s global expansion strategy, as it will be the connection with the Cambodian, Lao and Myanmar markets, the Dau tu reported.
In addition, CJ in Korea has expanded into entertainment and broadcasting services. In Vietnam, it has a collaboration with the Saigontourist Cable Television Co Ltd to develop a shopping channel in 2011. The Vietnamese broadcasting segment is remained 100 per cent state-owned.