The JV between Puratos Group and Grand-Place Holding will come into effect in January next year. The signing marks the beginning of a project that sets out to support the growth of both groups in the region.
Puratos will take a 70% share, with Grand-Place having the remainder of what will be known as Puratos Grand-Place Vietnam. The deal represents a total investment of US$10m over a five-year period into bakery, patisserie and chocolate.
The investment will support an increase in production capacity for both groups, as well as the construction of a new distribution centre in Binh Duong to improve logistics and service. In addition, a new R&D and innovation centre will service local customers.
Time for expansion
Piet Sanders, Puratos’ regional chief, told FoodNavigator-Asia that Vietnam offered tremendous scope for business.
“[In Vietnam] there is ever-growing purchasing power, as well as a rise in the consumption of bread, patisserie and chocolatier products. Moreover, Western quick-service restaurant groups have been coming into the country, and so have modern bakery chains. We have joined forces with Grand-Place Holding to form a one-stop powerhouse,” he said.
“With the rapid development of the bakery, patisserie and chocolate industry in Vietnam, Laos and Cambodia, this is the perfect time to strengthen our position in the market. Thanks to this joint-venture, we will also be able to meet the needs of our full range of customers, from artisan, semi-industry and industry to supermarket and food service.”
Both groups made their first Vietnamese investments around a decade ago, when the market was still fairly small and uncertain. "After 10 years on the market, we again met Gricha Safarian [Grand-Place Holdings' founder, in 2011], and quickly identified the tremendous opportunities on offer if we were to join forces," Sanders continued. "We are getting together in the Vietnamese market, but we also have an eye on developing the Cambodian and Lao markets, with Ho Chi Minh City as headquarters for the JV's activities in all three countries."
Promoting local ingredients
The partnership will also initiate vertical integration, from locally grown cocoa beans to chocolate drops, by turning the existing Grand-Place collection and fermentation pilot station into an industrial plant. As a result of this, the JV will significantly use and promote Vietnamese cocoa beans.
With two Belgian majors, and hitherto competitors, getting into bed in a far-off market, Sanders told us that trust was to be the centrepiece of this JV, and that both parties had developed a sense of this over the last year or so.
"Trust is the basis of everything," he asserted. "During 15 months of talks, we grew together closely and we succeeded in developing a strong, trust-based relationship."
For his part, Gricha Safarian, owner of Grand-Place Holding, who will take on the role of managing director of the new JV, remarked: “We have been working hard in this market for many years and joining forces with another Belgian group—a global player in his field—is going to provide us with the means of a strong acceleration of our long term plans. This is aimed to become a ‘1+1=3’ collaboration.”