Vietnam dairy firm IDP eyes $26 mln share sale to Singapore stakeholder

Vietnam’s International Dairy Products JSC (IDP) expects to sell more than 2.4 million shares over the next few months to Singapore’s Daytona Investments Pte. Ltd. for almost VND611 billion ($26 million).

IDP publicized the stock sale plan in an announcement on its website last weekend.

If the transaction is successful, the Singaporean investment company will increase its IDP ownership to 12.6% from 8.99%. Daytona had initially acquired 5.3 million IDP shares at VND1.37 trillion ($58.24 billion) to become a major shareholder in the dairy firm, according to an April 12 Hanoi Stock Exchange (HNX) announcement.

Daytona is part of Singapore-headquartered private equity firm Growtheum Capital Partners, which agreed in April to invest around $100 million for for a stake in the Vietnamese dairy company, based on its intention to tap Southeast Asia’s growing dairy market.

Trang Tran, managing director of the Singapore firm, is already an IDP board member following Daytona’s April investment.

“IDP is a unique opportunity for us to participate in Vietnam’s rising consumption story,” she had said then.

Growtheum’s $100 million investment is estimated to account for a 15% stake in the Vietnamese dairy firm, which was established in 2004 and now operates two manufacturing facilities, one each in Hanoi and Ho Chi Minh City. Its products include white milk, chocolate milk, fruit milk, drinking yogurt, and malt drinks that it sells under the Ba Vi, Kun, and Love’in Farm brand names.

In a restructuring of its investment portfolio, IDP had announced in mid-May the dissolution of its real estate subsidiary Green Light Investment, which it had set up in August 2022 with a charter capital of VND500 billion ($21.3 million).

IDP earned net revenues of VND1.58 trillion ($67.15 million) in the first quarter of this year, up 27% year-on- year. The company's Q1/2023 after-tax profit was VND218 billion ($9.28 million), down 8% year-on-year.

With a population of 100 million people and a growing middle class, demand for dairy and nutritional products is on the rise in Vietnam. The lion’s share of the domestic market is held by Vinamilk, the country’s largest dairy corporation; and the rest is mainly shared by IDP, TH True Milk, Dutch firm Frieslandcampina Vietnam and Swiss firm Nestle Vietnam.

According to its website, Growtheum, established in 2021, has an investment portfolio that includes Bank Allo, a digital bank in Indonesia with a captive ecosystem of more than 200 million users; and AlloFresh, an e-grocery platform in the same country.