Del Monte Philippines Inc. said it wants to capture at least 10 percent of the local milk market via the Vinamilk products made by its Vietnamese joint venture partner Vietnam Dairy Products.
“We’ll be happy with that 10 percent in the immediate term,” said Dani Eleazar-Ocampo, marketing lead for the brand.
Luis Alejandro, president of Del Monte-Vinamilk and COO of Del Monte Philippines, said they are planning to produce the dairy products in the country.
“As you know Del Monte has a very, very big footprint in Bukidnon. We have 26,000 hectares of pineapple plantation. We also have cattle as part of our agreement with the Department of Agriculture. We have more land. We think if in the future our success justifies local production, and is feasible then we will explore. This may involve dairy operations,” he said during the company’s product launch held virtually.
Vinamilk has initially rolled out 4 products in small sizes for children and a milk tea variant for adults. The company is planning to launch one-liter packs for adult drinkers, according to its officials.
In August, Del Monte and Vinamilk formed a 50-50 joint venture entity to enable the Vietnamese firm to enter the local market and sell their products.
The company currently imports co-branded dairy products from Vinamilk in Vietnam, then markets and distributes the products in the Philippines through Del Monte, which is known for its pineapple and tomato sauce.
“The joint venture is intended to leverage the respective strengths of Del Monte and Vinamilk: Del Monte’s established distribution network in the Philippines and brand equity for healthy food and beverage products, and Vinamilk’s vast experience and technical know-how in dairy products,” it said.
The joint venture’s initial authorized capital stock is about P300 million, while the initial capitalization is about P72 million, which will be shared equally by the two firms.
The joint venture will have six directors, with each of Del Monte and Vinamilk having the right to nominate three directors. The president of the new company came from Del Monte while the chairman and the chief financial officer will be nominated by Vinamilk.
“With the joint venture, Del Monte will have the opportunity to accelerate its entry in the growing dairy industry in the Philippines,” the company said.
Vinamilk is among the top 40 largest dairy companies globally, ranked 36th by revenue with $2.6 billion in sales in 2020, and has a 45-year track record.
It is the largest listed food and beverage company in the stock exchange of Vietnam with a market cap of $9 billion. It operates an end-to-end value chain with 13 dairy farms, some 160,000 cattle, 13 factories, and 250,000 retail outlets across Vietnam and has been exporting to 56 countries.