Food Groups Bunge and Wilmar Announce Joint Venture in Vietnam
06 Jul 2016 --- Food companies Bunge and Wilmar have announced plans to form a joint venture in Vietnam in an attempt to leverage the stance of both companies in Asia.
The collaboration will see Bunge sell 45% of its equity in its Vietnam crush operations to Wilmar, creating a three-party joint venture with Bunge and Wilmar as equal 45% shareholders and Quang Dung, a leading soybean meal distributor in Vietnam and majority owner of Green Feed, a growing Vietnamese feed milling business, retain its existing 10% stake in the operations.
The companies’ claim that the transaction will establish a strategic collaboration between three uniquely positioned leaders in the Vietnamese oil and feed markets. By connecting Bunge’s upstream crushing capabilities, Wilmar’s downstream oil refining and consumer products business, and Green Feed’s feed milling and marketing activities, the three companies hope to see an increase in prominence.
Vietnam is home to one of the fastest-growing domestic edible oils markets in Asia, and this joint venture creates integrated opportunities for the sales outlet for oil in Vietnam, as well as enable increased participation in the domestic feed milling industry.
“Bunge is excited to partner with Wilmar, the largest downstream edible oils player in Vietnam,” said Soren Schroder, CEO, Bunge Limited. “The collaboration will create increased operating, marketing and logistics synergies across the Vietnam oils and soybean meal value chains, and help us remain a low-cost operator with the highest efficiency possible.”
“Bunge is a natural partner for us. In Vietnam, it is the largest producer of soybean oil and Wilmar is a major buyer of soybean oil,” said Kuok Khoon Hong, Chairman and CEO of Wilmar. “The soybean meal distribution capabilities of the joint venture also complement Wilmar’s animal feed ingredients business in Vietnam, including rice bran, wheat bran, palm kernel expeller, copra expeller, canola meal and feed oils.”
According to U.S. Department of Agriculture data, Vietnam is projected to import 5.2 million metric tons of meal in 2016/17, up from 2.291 million a decade ago. This is due to an increased consumer demand for meat and production of livestock, which are fed with soybean meal.
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