Kido Group sets up $10.5 mln lard, vegetable oil firm

The Kido Group, Vietnam's leading food and cooking oil producer, has announced the establishment of a VND250 billion ($10.47 million) lard and vegetable oil production company.

The new venture, called Kido Long An Co., Ltd., is headquartered at the Southeast Asia Long An Industrial Park in Can Giuoc district, Long An province, southern Vietnam.

Kido (KDC) has not announced the ownership details of Kido Long An.

The legal representative of the new company is KDC deputy general director Tran Tien Hoang. KDC chairman Tran Kim Thanh will represent the group’s capital contribution at Kido Long An and be chairman of the new company.

As of the second quarter this year, KDC had a total of seven subsidiaries and five joint ventures and associates.

The group reported net revenues of VND6,352 billion ($271 million) in the first six months of the year, up 30% year-on-year. Cooking oil made up 83% the total, with its revenues rising 30%, while food products accounted for 17%. The group's after-tax profit reached VND340 billion ($14.5 million), down 6%.

Top broker SSI estimates that KDC's net revenue and after-tax profit in 2022 will reach VND14.3 trillion ($598.67 million), and VND827 billion ($34.62 million), up 36% and 27% year-on-year, respectively. Revenues from cooking oil and frozen foods are estimated to grow by 37% and 23%, respectively.

In 2023, SSI expects cooking oil revenue to grow 6.5% year-on-year as KDC increases premium products in its fast moving consumer goods (FMCG) portfolio.

The top broker also expects ice cream sales to grow 6.7% when the ice cream market returns to normal. It estimates the gross margin of the cooking oil and frozen foods segments will reach 18.4% (15% in 2022) and 58% (59% in 2022) in 2023, due to a sharp drop in palm oil prices from the second half of 2022.