Vietnam is Masan Group’s primary area of focus as Southeast Asia’s fastest growing economy. Real GDP has grown at a compound annual growth rate ("CAGR”) of 7.3% between 2004 and 2010. While Vietnam’s growth has been supported by low labor costs and productivity gains as a result of the Doi Moi ("renovation”) reforms which opened up the markets, we believe Vietnam’s true value lies in its domestic consumption potential and untapped natural resources.

The Middle Class Story

Vietnam’s demographic advantages support strong continued growth in domestic consumption:

• Large and Young Population - Vietnam has a population of over 89 million in 2010, a high proportion of which is in the workforce, supporting higher consumer spending. With much of the population (68% under the age of 40) set to enter the workforce in the next 10 to 15 years, growth in consumer spending is expected to continue.
• Rapidly Rising Income Levels - Based on real GDP per capita and adjusted for purchasing power parity, income levels have increased threefold in the past 20 years, from US$840 in 1988 to approximately US$2,500 today, leading to a doubling in the size of the middle class over the past 5 years.
• The Middle Class is Driving Growth - Rising affluence accounts for the expansion in basic sectors such as food and beverage, which will continue to account for more than 50% of total consumption, and in financial services (shown by the 280-fold growth in the number of debit cards issued between 2003 and 2008).

Underdeveloped Resources Potential

Mineral resources, agriculture and energy together constitute a significant percentage of Vietnam’s GDP with further growth anticipated from the development of the downstream sectors and related infrastructure.

• Mineral Resources - Vietnam is richly endowed with mineral wealth, holding some of the world’s largest reserves in bauxite and tungsten and significant deposits of rare earths, titanium and iron ore. Other mineral resources include copper, gold, nickel, zinc, tin, lead, chromite and manganese. Vietnam mineral resources potential remains largely untapped as many areas remain unexplored.
• Agribusiness - Agriculture, forestry and fisheries constitutes 21% of Vietnam’s 2010 GDP. The country is a major player in the rice, coffee, rubber and cashew trades and exported US$5 billion of seafood products (5.6 million ton) in 2010. Rising domestic consumption, new export markets and institutional support from government and trade groups will drive the sector’s growth.
• Oil & Gas - Vietnam ranks third in Southeast Asia for petroleum resources. The sector has produced almost one billion barrels of crude oil and 300 billion cubic feet of natural gas over the past several decades. Oil and gas are anticipated in almost 50 fields and prospects, with reserves of approximately 4.5 billion barrels of oil and 23 trillion cubic feet of gas.

Vietnam’s economic growth will drive development and opportunities in many adjacent and related sectors, including power, infrastructure, logistics and a more dynamic financial services industry to allocate capital more efficiently to drive growth.

Vietnam’s Constraints Drive our Business Model

Vietnam has recently experienced macroeconomic challenges, including high inflation and currency depreciation as it focused on GDP growth. Also, the private sector, while growing strongly, remains fragmented as demonstrated by turnover and market share. Private sector companies are further challenged by constrained availability of long-term capital, lack of professional expertise and competition from larger multinationals.

Masan Group manages these risks and addresses Vietnam’s private sector constraints by building scale and leading operating platforms to weather financial cycles, consolidation and growing market share.