Masan deepens strategic partnership with De Heus Vietnam, focusing on branded chilled meatMasan MEATLife ’s meat business has grown rapidly over the past three years and is on track to deliver $200 million in revenue in the fiscal year of 2021, while achieving double-digit EBITDA margins.
Pork meat is the largest food and beverage category in Vietnam with a market size of over $10 billion, yet it is the most unstandardised, fragmented, and unsafe category. From a pure animal feed company, Masan Meat Life (MML) has rapidly transformed into a branded meat business to revolutionise Vietnamese consumer meat market.
Masan MEATLife started with animal feed segment as the core business. At the time, the meat segment was in dire need of investment in technology and processing lines to become profitable. However, MML always believed that the meat business would become the mainstay of its revenue and profit.
In addition to pork, poultry meat accounts for a major portion of meat sales in Vietnam. In 2020, MML expanded into the $5 billion poultry meat market in Vietnam by acquiring 51 per cent in 3F VIET, the leading integrated platform of branded poultry meat products.
The chilled chicken products of the 3F VIET brand have been available in most supermarkets of Ho Chi Minh City and neighbouring provinces and have gradually expanded to the north and other parts of the nation.
Thanks to the launch of the MEATDeli brand and its investment in 3F VIET, MML is well-positioned to disrupt the $15 billion meat market in Vietnam, unlocking its potential for sustainable growth as well as significantly higher profit margin. The meat brand aims to provide consumers with fresh, safe, and traceable meat products at reasonable prices.Truning a profit and creating momentum for breakthrough
In the third quarter of 2021, MEATDeli, MML's branded chilled meat business (excluding farms, 3F Viet, and feed) marked an important milestone whenby delivering its first ever positive net profit after tax. Net revenue increased by 51.2 per cent while gross and earnings before interest, taxes, depreciation, and amortisation (EBITDA) margin improved by more than 20 per cent on-year.
Through its product diversification strategy, it aims to contribute 10 per cent of MML’s total meat sales. The newly launched products (processed chilled meat and marinated chilled meat) can take full advantage of Masan’s modern distribution channels with nearly 2,500 VinMart and VinMart+ stores and supermarkets nationwide.
Satisfying the needs of modern consumers, MML’s products have won the trust of customers and gradually strengthened MEATDeli’s foothold in the market.
To focus on the branded chilled meat industry, on September 14, MML signed an MoU with De Heus – a global leader with 100 years of experience in animal nutrition and husbandry.
This strategic partnership will promote technology sharing in agriculture and commerce and leverage each party’ strengths and capabilities to contribute to the development of Vietnam’s agriculture industry.
Taking this one step further, on November 5, MML announced the signing of strategic agreements with De Heus Vietnam, pursuant to which De Heus Vietnam will obtain control of the feed business and invest $600-700 million in Vietnam’s animal protein supply chain.
The transaction is part of the implementation of the MoU signed in September for MML to focus on branded meat while De Heus Vietnam would prioritise providing animal nutrition, genetics, and husbandry solutions.
The transaction and the ongoing implementation of the MoU are expected to ensure food safety, productivity, and sustainability for the 3F integrated supply chain model. In particular, De Heus will supply up to 70 per cent of the feed demand of MML’s farms and at least 2.8 million live pigs to MML over the next five years. The transaction helps to ensure stable pricing, high quality, and standardised livestock.
Danny Le, CEO of Masan Group, said: “With De Heus as our supply chain partner, Masan will purely focus on developing the leading branded meat platform and to invest all of our human and financial resources to deliver safe, delicious, and reasonably-priced meat products that adhere to international standards. This is also a testament to our commitment to evolve into an integrated, branded consumer ecosystem."
To realise its Point of Life strategy, Masan Group and its subsidiaries have worked with strategic partners to bring more value to consumers’ daily lives.
Their current partners are all leading regional and international names such as Alibaba, Baring Private Equity Asia (investing in The CrownX, Masan's integrated offline-to-online consumer retail platform), SK Group (investing in VinCommerce, the operator of VinMart/VinMart+).
Masan MEATLife cooperates with De Heus to boost productivity and optimise the 3F chain thanks to the core strengths of each party.
Source: Vietnam Investment Review