July 19, 2006

Vinamilk seeking investors as government liberalise

Vietnam's biggest dairy, Vinamilk, may be seeking investors after the government revealed plans to reduce its controlling stake in the company.

The government currently holds 50.01 per cent of the listed firm's capital, amounting to VND1.59 trillion (US$100 million). In official documents released last week, the state said that it would cede some control.

Although the government has yet to declare how much shares could be sold, the firm said it had already planned to issue shares to raise capital for its projects.

Investors are likely to jump at the opportunity to benefit from Vinamilk's strong growth.

The company controls approximately 40 percent of Vietnam's fast-growing milk market. According to industry analysts Euromonitor, the dairy sector is one of the fastest growing sectors in Vietnam's packaged food category.

As for exports, Vinamilk has increased revenue from global sales by 24 per cent in the first six months of the year to US$24.7 million.

Vietnam's bid for WTO membership by the end of the year and means it must loosen restrictions on foreign investment.

The country has been an attractive target for overseas investors, especially those from the Middle East, Australia, US and the rest of South-east Asia.