Vietnam Dealbook: Giffarine Skyline Unity to form JV, Korea’s Dongwha invests $70m more in JV

Thailand based consumer goods and direct sales firm Giffarine Skyline Unity is reportedly planning to enter Vietnam market via a 20:80 joint venture (JV). Meanwhile, Dongwha Enterprise, a South Korean wood processor and manufacturer, has invested nearly $70 million in its JV with the state-owned Vietnam Rubber Group. In the tech space, US firm Dell has entered an agreement to give ten $6,000 scholarships to startups under the Topica Founder Institute programme.

Giffarine Skyline Unity to form 10 million baht JV in Vietnam

Bangkok-headquartered consumer goods company Giffarine Skyline Unity is looking at a foray into the Vietnam market through a 10 million baht ($283,000) joint venture in registered capital by the end of 2016, the Bangkok Post reported.

The firm plans to hold 20 per cent of the JV, while the remaining 80 per cent will be owned by its partners, which are a group of Thai businessmen. The JV is undergoing company and direct sales registration. “We see huge market opportunities in direct sales in Vietnam because of the big population and the country’s high economic growth compared with other Asean countries.

Moreover, Thai products are popular among Vietnamese people,” the Bangkok Post cited Nalinee Paiboon, president of Giffarine Skyline Unity, who revealed the company will spend some 50 million baht to start its business in the next seven months. The Vietnam-based unit is expected to generate 30 million baht in the first year and surge up to 80 million bath in the second year of operation.

The Thai company is also targeting, through a digital approach, to attract younger distributors, who are anticipated to account for some 30 per cent of its direct sales network, up from 20 per cent last year. Prior to Giffarine Skyline Unity, another Thai network sales firm, Kangzen, has been present in Vietnam.

Dongwha injects $70m in Vietnam-based production line

South Korean floor material manufacturer Dongwha Enterprise, through its partnership with the Vietnam Rubber Group, has inaugurated a second production line worth nearly $70 million for the MDF VRG Dongwha JV, making it the largest facility in Asia’s medium density fiberboard (MDF) sector. “South Korea’s Dongwha and the Vietnam Rubber Group are two strong companies in terms of investment capital and relationship with lenders. (…)

The partnership has helped the MDF VRG Dongwha joint venture become a leading brand in the market, and will bring the deployment of the second production line to success,” the Vietnamese state company cited deputy minister of agriculture Ha Cong Tuan in a release. “In 2015, MDF VRG Dongwha reached almost $100 million in revenue and $40 million in profit.

Based on that achievement, we are well positioned to further invest in the second production line,” said Tran Ngoc Thuan, CEO of the rubber producer. Founded in 2008 and selling its first MDFs in 2012, the JV currently has over 180 local and international partners. Thanks to Vietnam’s abundant rubber tree resources, of which the Vietnam Rubber Group owns 250,000 hectares plantation, it is considered as one of the advantages of the JV over around 10 MDF companies in the market.

Dell provides scholarships for Topica Founder Institute grads

American computer tech firm Dell has agreed to support this year’s graduates of the Founder Institute franchise in Vietnam with 10 scholarships worth $6,000 each. Topica Edtech Group, which brought the franchise to Vietnam, has incubated tens of local startups through four bootcamp batches. Eight of its incubatees have raised a total of over $10 million from investors. Topica Founder Institute (TFI) is calling for the fifth batch, 10 of which will receive the Dell scholarships.

“The work of Topica Founder Institute has contributed a lot to the local startup ecosystem. If young people, who with creativity and the hunger for starting up, join programmes like TFI, I believe they will succeed,” commented Nguyen Quang Long, Dell Vietnam’s head of retail. The support for startups is very critical, according to Long, because if it is not available, Vietnam will be left behind ASEAN countries and member nations of the TPP. Through the Dell scholarships, Vietnamese startups will have access to the tech group’s expertise and technologies.

Khoa Le

Source: Deal Street Asia