HCM CITY — Deposit interest rates at commercial banks will continue to decrease and remain at low levels in the coming months, analysts forecast. In the third quarter of 2021, Masan MEATLife's branded meat business (excluding farms and 3F Vietnam) delivered its first ever net profit, validating Masan's strategy of “focusing on the meat industry.”
Deepen cooperation, promoting strength
On November 5 Masan MEATLife announced the signing of strategic agreements with De Heus Vietnam (a subsidiary of the Dutch Royal De Heus Group), following which De Heus Vietnam will obtain control of the feed-related business (the “Transaction”) and invest US$600-700 million in the local animal protein supply chain.
It is part of the implementation of a memorandum of understanding signed in September to achieve the following: Masan MEATLife (“MML”) will focus on branded meat while De Heus Vietnam will prioritize animal nutrition, genetics and husbandry solutions.
The Transaction and the ongoing implementation of the MOU are expected to ensure food safety, productivity and sustainability of the 3F (Feed-Farm-Food) integrated supply chain model.
Over the next five years De Heus is expected to supply up to 70 per cent of the feed demand of MML's farms and at least 2.8 million pigs for MML's meat production.
The Transaction helps to ensure stable prices, high quality and standardised livestock to provide consumers with delicious, safe and reasonably priced meat products that conform to international standards.
This marks the final step of MML’s transformation into a branded meat player and is in alignment with Masan’s vision of becoming a pure-play integrated consumer ecosystem from products to services with The CrownX as the foundational platform. Post the closing of the transaction, MML owns 100 per cent equity of the integrated pork meat business (Meat and Farm), and 51 per cent equity of 3F VIET (Meat and Farm).
The partnership not only helps MML, one of the largest fully integrated platforms in Vietnam, and De Heus, the global leader in animal nutritional solutions, develop, but also helps accelerate the modernisation of the animal protein value chain in Vietnam.
Mr Danny Le, CEO of Masan Group, said: “We aim to enhance the productivity of Vietnam’s animal protein value chain for the benefit of our independent farmers and, ultimately, consumers.
“This partnership is a testament to our commitment to evolve into an integrated, branded consumer ecosystem and work with leading partners to ensure we bring more value to our consumers’ daily lives.”
Before collaborating with De Heus, Masan inked a deal with e-commerce giant Alibaba to speed up this “Point of Life” ecosystem, creating a convenient shopping experience from offline to online.
Investing resources to develop branded meat products
Pork accounts for some 70 per cent of the meat consumed in Vietnam. It is a market worth more than US$10 billion, 2.5 times the value of the dairy market. But it remains fragmented, undeveloped and unable to control quality or trace origin.
Vietnamese are increasingly paying attention to health, food hygiene and safety, and are willing to pay a premium for clean, branded pork products.
Understanding this, Masan has set up two chilled meat processing complexes at a total cost of more than VNĐ2,800 billion in Ha Nam and Long An.
It also launched chilled, branded meat MEATDeli in December 2018.
MML's MEATDeli chilled meat is produced using state-of-the-art European processing technologies, and the production facilities are directly operated, supervised and tested by experienced European experts.
The entire process from live pigs to finished product is done without using antibiotics or weight gain supplements. After slaughter, the meat is chilled at a temperature of 0 - 4 degrees Celsius throughout the process of packaging, storage and transportation.
Within just two years of its launch MEATDeli products have become trusted and bought by a large number of consumers.
This chilled meat brand has also regularly won prestigious honours such as the Trust & Use Award 2019, 2020 and Top 10 Prestigious F&B Companies in the fresh and frozen food industry in 2021.
MML also acquired a 51 per cent stake in 3F Viet, the leading poultry meat supplier in the country, to diversify its product range.
Simultaneously, it upgraded its product portfolio by investing in developing MEATDeli Premium, marinated chilled meats, processed meats...
As of June this year the MEATDeli brand was sold at more than 2,700 points of sale, including 2,300 VinMart/VinMart+ supermarkets and other stores nationwide.
As of the end of the third quarter the 3F Viet business, including the entire chicken production value chain, delivered revenues of over VNĐ1 trillion, or 6.7 per cent of MML's consolidated net revenues.
Synergies from 3F Viet’s integration with Masan Group’s ecosystem have led to MML’s chicken brands becoming available at more than 2,200 VinMart supermarkets and VinMart+ minimarkets.
As a result, 3F Viet expects full-year 2021 revenues to reach VND1,800 billion, higher than the earlier expectation of VNĐ1,500 billion.
By 2022 Masan plans to expand its distribution system to 300 MEATDeli stores, 4,400 agents and 400 CVLife mini-mall model stores that integrate many utilities in the ‘Point of Life’ ecosystem.
MML’s meat business has grown rapidly over the past 3 years and is on track to deliver USD200 million in revenue in FY2021, while achieving double-digit EBITDA margins.
By 2025, the company aims to achieve a 10 per cent nationwide market share of the meat market (pork and poultry), worth $15 billion with a 20 per cent + EBITDA margin. VNS