​​​​​​​Masan MEATLife’s advantages after effecting transformation plans

September, 11/2021 - 17:30
Masan MEATLife Corporation (MML) will be restructured by separating independent business lines in its integrated 3 F (feed - farm - food) model, including the animal feed business, and transforming into a business platform that focuses solely on branded meats.

 

People shop for MeatDeli branded pork at a VinMart supermarket. The chilled meat products are now available at 2,300 VinMart supermarkets and VinMart+ store nationwide. — Photo courtesy of Masan

HCM CITY — Masan MEATLife Corporation (MML) will be restructured by separating independent business lines in its integrated 3F (feed - farm - food) model, including the animal feed business, and transforming into a business platform that focuses solely on branded meats.

MML’s board of directors on September 10 tabled the transformation plan at the annual general meeting.

Masan MEATLife, a subsidiary of Masan Group, entered the meat supply chain by merging two leading animal feed companies in Việt Nam, ANCO and Proconco, in 2015.

Then, in 2017 and 2018, it invested in the rest of the supply chain (farms, processing plants and retail chains) and completed the 3F chain with the launch of fresh chilled meats in the market under the MEATDeli brand.

MEATDeli is the first chilled, branded meat in Việt Nam, and is produced using state-of-the-art European processing technology.

Nearly three years after its inception, MEATDeli owns a distribution system comprising more than 2,700 points of sale in Hà Nội, HCM City and surrounding areas and a consumer base of millions.

Potential of meat segment

With a population of nearly 100 million people and growing per capita income, Việt Nam has witnessed an increase in demand for hygienic and traceable meat.

The pork market, valued at more than US$10 billion, is the largest segment in the F&B industry. But this is a non-standardised market with more than 90 per cent of pork products on the market being unbranded whereas consumer demand for traceable products is increasing.

This offers MML's MEATDeli clean meat brand enormous potential for growth.

Masan MeatLife’s pig breeding farm. — Photo courtesy of Masan

MML owns a high-tech pig farm in Nghệ An that spreads over an area of 223 hectares and cost VNĐ1.4 trillion ($61.5 million). It has a capacity of 250,000 pigs a year.

Its entire process of raising pigs has been closely monitored by experts to ensure the quality of each.

MML also invested more than VNĐ2 trillion ($87.8 million) to build two meat processing complexes in Hà Nam and Long An (MEAT Hà Nam and MEATDeli Saigon) to produce chilled meat and processed meat products.

The two complexes have a total processing capacity of 2.8 million animals per year. Healthy live hogs used by MEAT Hà Nam and MEATDeli Sài Gòn must go through three stringent quarantine layers.

MEAT Hà Nam and MEATDeli Saigon are considered the first two European-standard chilled meat processing facilities in Việt Nam.

MML’s net revenues in the first half of this year were up 42.1 per cent year-on-year to VNĐ10.23 trillion ($449.4 million).

Meat has become a significant independent business segment for MML, contributing VNĐ2.07 trillion ($90.8 million) in revenues and VNĐ163 billion ($7.2 million) in earnings before interest, taxes, depreciation, and amortisation (EBITDA), with 3F Viet (a poultry company in which MML acquired a 51 per cent stake) accounting for 20.5 per cent of revenues.

Masan MEATLife’s meat business is expected to get into the black by the end of this year when the meat processing complexes achieve 25-30 per cent capacity utilisation in the fourth quarter compared to the current 11 per cent.

Advantages after restructuring

A Proconco production line that makes Con Cò, the most popular animal feed brand. — Photo courtesy of Masan

Under the restructuring plan, Proconco’s sales division (and Anco) will be reorganised, and the two companies’ distribution systems will be managed by their factories.

This is aimed at simplifying the distribution system and building a strategic partnership for the animal feed business. This will enable MML to improve productivity in the feed and farm sectors to provide inputs to MEATDeli.

The ultimate goal of the transformation is to provide nearly 100 million Vietnamese consumers with traceable, quality and affordable meat products.

This restructuring of MML will not alter the agreements signed with agents/distributors or affect the interests of employees, partners and shareholders. After the restructuring, each business segment will be proactive and focus on doing its job well, and MML will focus on developing the meat segment.

It does not affect Masan MEATLife’s integrated 3F model either.

MEATDeli is a fast-moving consumer goods business with a focus on building a strong brand and ensuring outstanding quality based on advanced production technologies.

Vietnamese consumers tend to choose branded foods, those that are fresh and nutritious, meet hygiene and safety standards, and are traceable. This trend is being accelerated by the impact of the COVID-19 pandemic.

Integrating with VinCommerce, a retail affiliate of Masan Group with nearly 2,500 VinMart/VinMart+ supermarkets and stores, gives MEATDeli a great advantage in terms of distribution and ability to serve consumers.

The restructuring of MML is part of the transformative development plan announced by Danny Le, CEO of Masan Group, at the 2021 AGM.

Masan Group is ready to cooperate with strategic partners with resources and experience to maximise its strengths and achieve its Point of Life strategy to meet consumers’ every day needs.

Since the beginning of this year, the group has been tying up with a number of domestic and foreign partners such as SK Group, a group of investors including Alibaba Group and the Phúc Long tea and coffee chain. — VNS

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