Berli Jucker Plc (BJC), a SET-listed trading company, expects the 655-million-euro (28.2 billion baht) acquisition of Metro Group's cash-and-carry unit in Vietnam to achieve its goal of becoming a fully integrated consumer goods provider in the region.
A Metro cash-and-carry store in Ho Chi Minh City. With the Metro purchase, BJC will control 22% of Vietnam's modern grocery business. AFP
BJC will now have its own supply and service chain for consumer items from production, distribution and retail outlets in Vietnam, said president Aswin Techajaroenvikul.
"After fully integrating this business platform in Vietnam, we will apply the concept in Laos, Cambodia and Myanmar," he said.
BJC sealed the landmark deal to buy Metro Cash & Carry Vietnam Ltd, a subsidiary of Germany's Metro Group that runs 19 stores nationwide.
The transaction is expected to be completed early next year.
Aswin: Shortcut to integrated service
The German retailer entered the Vietnamese market in 2002. It employs 4,000 staff and generated sales of US$692 million in fiscal 2013.
Metro Vietnam controls a 22% share of the country's modern grocery market and is the biggest foreign retail player.
With the acquisition, BJC expects to boost its profile in Vietnam.
The company makes glass bottles, aluminium cans and tissue paper while distributing consumer products for its own brands and others such as Kratingdaeng and P&G.
"We'll buy experience and take a shortcut to providing fully integrated supply chain service," Mr Aswin said. "Acquiring Metro will help to increase our total sales by 50% next year to 63 billion baht."
Last year, BJC generated total sales of 42 billion baht.
With the Metro chain, retail space under BJC in Vietnam will grow to 112,000 square metres from 6,000 sq m now.
Apart from Metro, BCJ launched its B's Mart convenience stores in Vietnam earlier this year and now has 95 locations nationwide.
"The image of BJC will become even better," Mr Aswin said. "BJC will integrate and synergise the Metro retail chain with our existing business in Vietnam. The Metro brand will be phased out and changed to our new name within the next 12-18 months."
He said all business units would fall in line with the policy of the company's major shareholder, Charoen Sirivadhanabhakdi, who wants BJC to be the first company in Asean to provide integrated supply chain services, starting in Vietnam and expanding to other countries.
"It's the right time to enter the Vietnamese retail market, as the country's economy is going to be in an upward trend," Mr Aswin said.
Vietnam's middle class and affluent are set to triple in the next five years as GDP growth outpaces that of many Southeast Asian countries, ranking third after Indonesia and the Philippines.
In addition, the prevalence of the modern grocery business in Vietnam is still low at 4% compared with 71% in Singapore, 54% in Malaysia and 44% in Thailand.
BJC will continue to expand its existing business by producing more goods, finding new items for distribution and seeking fresh acquisitions.
The company has been involved in production and distribution for about 120 years. Its goal is to have its own retail stores to complete the supply chain.
BJC previously attempted to purchase Carrefour's assets in Thailand, but the bid failed. At that time, Casino won and rebranded Carrefour's Thai stores as Big C Supercenter.
BJC shares closed yesterday on the SET at 56 baht, up 50 satang, in trade worth 410 million baht.