Del Monte Philippines Inc. on Thursday said it created a joint venture entity with Vietnam Dairy Products to enable the Vietnamese company to sell its Vinamilk products in the Philippines.
Del Monte and Vinamilk will have 50-50 joint ownership and control of the said firm, the company said in its disclosure.
“The corporate vehicle for the joint venture had been incorporated and is in the process of completing licensing arrangements for the use of Del Monte and Vinamilk and securing the requisite permits and licenses including business permits, importation license and market authorizations from the relevant government agencies,” the company said.
The joint venture company is expected to be fully operational to directly import and sell the products within a few months, Del Monte said. In the meantime, Del Monte will be the direct importer and distributor of the dairy products from Vinamilk for the Philippine market.
“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,” the company 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 will be nominated bv 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.
DMPI reported in June that its net income for fiscal year (FY) 2021 ending April rose 33 percent to P4.6 billion from the previous year’s P3.5 billion.
The company attributed the increase to improved sales, lower costs and expenses and greater efficiency. The company said sales during its fiscal year, which starts in May, were up 8 percent to P34.5 billion from last year’s P31.9 billion.
About two-thirds of the company’s sales came from the Philippines, while the international market accounted for the rest.
The company’s local sales grew by 10 percent to P19.2 billion, as strong retail sales more than offset the decline in food service sales due to the quarantine. Sales volume rose in its convenience cooking and dessert, and healthy beverages and snacks segments.