DEL Monte Philippines, Inc. (DMPI) in an e-mailed statement on Monday said that it will be expanding into the dairy sector in the Philippines.
The company said it entered into a “strategic alliance” with Vietnam Dairy Products JSC or Vinamilk. Both companies will be contributing 50% to the total investment capital of the joint venture.
“The joint venture will import dairy products from Vinamilk, and market and distribute them in the Philippines through DMPI,” Del Monte Philippines said.
Vietnam’s 45-year-old Vinamilk exports to 56 countries. Its product offering includes over 250 SKUs (stock-keeping units), which can address the “nutrition needs of consumers.”
It operates 13 dairy farms and a total herd of nearly 160,000 cattle, 13 factories, and 250,000 retail outlets in Vietnam. The company also has three factories in the United States, New Zealand, and Cambodia as well as an organic dairy farm complex in Laos.
Vinamilk is listed in Vietnam’s stock exchange and is said to be the largest listed food and beverage company, with a market capitalization of $9 billion. It is also among the Top 40 largest dairy companies across the globe, taking 36th place by revenue with its 2020 sales worth $2.6 billion.
“The joint venture provides an opportunity for growth in the domestic dairy industry as Vinamilk expands into a new consumer market, and as Del Monte expands its footprint into a new category regularly consumed in Filipino households on a daily basis,” DMPI said.
Vinamilk will be providing the technical and manufacturing expertise for the products of the joint venture. Products will be co-branded, to bank on the strong brand equity of Del Monte in the Philippines.
DMPI is the “most profitable subsidiary” of listed parent Del Monte Pacific Ltd., finishing its financial year ending April to net an income of P4.6 billion with sales inching up by eight percent to P34.5 billion.
On Tuesday, shares of listed Del Monte Pacific at the local bourse declined by 5.45% or 72 centavos to close at P12.48 apiece. — Keren Concepcion G. Valmonte