High-end vegetable oil market becoming more competitive

Now that most of the best-known vegetable oil brands are sold in Vietnam, market performance is expected to be even better in 2017.



Singaporean Musim Mas has built a 1,500 ton/day vegetable oil factory in Vietnam with the total investment capital of $71.5 million. Meanwhile, Wilmar has made a deal on buying a 45 percent stake of Bunge which now has a 3,000 ton/day factory in Ba Ria – Vung Tau province.

Analysts commented that the Vietnamese market has attracted nearly all ‘luminaries’ in the world.

Kido has spent VND1 trillion to take over a 65 percent stake of Tuong An Oil. Prior to that, Kido obtained 24 percent of shares of Vocarimex, while planning to increase its ownership ratio there to 51 percent in 2017.

Kido, which was a sweets manufacturer, has decided to jump into the vegetable oil market though it is aware of the risks of the industry, as 90 percent of input materials need to be imported.

Now that most of the best-known vegetable oil brands are sold in Vietnam, market performance is expected to be even better in 2017.

Tran Le Nguyen, general director of Kido, when buying Tuong An Oil shares, explained that Kido can see great opportunities for development, especially in the high-end market segment.

Tuong An still cannot exploit the northern market, while the demand is very high and Kido has a large distribution network.

After wrapping up the deal of buying Tuong An Oil, which holds the second largest market share, Kido’s consolidated net revenue in the fourth quarter of 2016 increased sharply compared with the same period of the year before.

Also optimistic about the market prospect, Sao Mai An Giang Group now focuses on improving the quality of Ranee, a cod-liver oil product, though it is still facing difficulties. In 2016, it kicked off the construction of another factory in Lap Vo, double the existing capacity.

An Long Food, which owns Happi Koki brand, said the company is focusing on making high-end products, saying that consumers now prioritize healthy products. Happi Koki reported the growth rate of several percent in 2016.

Ngoc Anh, sales director of Victoria Vietnam, which makes OiliO brand products, also reported a steady increase in sales.

A survey by Epinion, a market analysis firm, found that consumers used products of three different brands over three months.

However, vegetable oil companies said that many consumers cannot tell the difference between low-end and high-end vegetable oil.

“Many people buy high-end products, but they are not sure if they really have high quality. Others think the imports available at shops are counterfeit goods,” she said.

Tran Anh Dung from Wilmar complained that while the company has to spend big money on R&D to create new high-end products, consumers do not understand or appreviate the value of the products.

Kim Chi / vietnamnet