Unilever Vietnam JV turns into wholly foreign-owned company

The two parties celebrate the initiative which will prove to be a win-win situation.

The new entity will operate under the name Unilever Vietnam International Co. Limited. This restructuring of the joint venture is one part of the long-term strategic cooperation agreements which Unilever and Vinachem signed in March this year, with an aim to open a new phase in the close cooperation relationship between the two companies.

Under the signed agreements, Unilever and Vinachem will cooperate for the production of input raw materials to substitute current imports by Unilever Vietnam as well as to export to Unilever groups of companies.

Also, Vinachem’s affiliates will continue to benefit from close cooperation with Unilever as illustrated by long-term manufacturing contracts signed with Unilever Vietnam. The consumer value thus to be manufactured is expected to reach around $1.75 billion over five years while it is estimated that $75 million in Unilever’s current raw material imports annually could be purchased from Vinachem if produced locally and this could grow to $100 million in the next few years.

“The strategic move in the relationship between Vinachem and Unilever will help leveraging the strengths of both companies and prepare the partnership for the future in face of the rapid changes in the economy and the market in Vietnam, as well as in the world market,” Unilever Vietnam chairman Marijn van Tiggelen said.

Do Duy Phi, general director of Vinachem, said the restructuring of Unilever Vietnam would allow Vinachem to focus on its main agenda within Vietnam’s industrialisation strategy, while providing Vinachem with additional financial resources for the implementation of key projects under its plan. According to plans, Vinachem will need between $2-2.5 billion for its investment projects in the next few years.

Vinachem also revealed that the first input raw material that Vinachem would cooperate with Unilever to produce locally would be sorbitol, a substance used in toothpaste. The intended initial capacity of 20,000 tons would increase to 100,000 tons per year and the plant would be the first of its kind in Vietnam.

Established in 1995, Unilever Vietnam joint venture has grown into one of the leading and successful foreign-invested companies in Vietnam in the fast-moving consumer goods sector. Unilever was formed in 1930 through the merger of the operations of the Dutch margarine company, Margarine Unie and the British soapmaker Lever Brothers.

As one of the largest consumer products companies in the world, Unilever manufactures home and personal care products and foods including such global brands as OMO, Lux, Lifebuoy, Dove, Close-up, Sunsilk, Clear, Pond’s, Vim, Lipton and Knorr.