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									Vietnam | Chocolate & Biscuit market   1
D.Milherou (1999)
::: Table of Contents
:: The chocolate market in the major countries of Asia
1)    Data on the per capta annual consumption of chocolate   5
2)    Production of cocoa beans in Asia
3)    The Asian confectionery market                          6
4)    The major markets in Asia

      a)   South Korea
      b)   Taiwan
      c)   Singapore
      d)   Malaysia                                           7
      e)   Philippines
      f)   Indonesia
      g)   Thailand
      h)   Japan
      i)   China
      j)   Trend of the Vietnamese market

:: Vietnam country profile

FOOD SECTOR INFORMATION                                       8

1) Market size/growth/trend

      a) Background Information

      b) Economic Indicators                                  9

      c) Business Climate                                     10

      d) Arbitration                                          11

      e) Political Structure

      f)   Economic Situation

      g) Labour                                               12

      h) General Merchandise Trade

      i)   Trade With Other Countries

      j)   Memberships

2) Opportunities                                              13

     a)    Background Information

     b)    Ports                                              14

     c)    Currency

     d)    Promising Cities and Provinces                     15

     e)    Investment Climate                                 17

     f)    Agricultural                                            Profile

Vietnam | Chocolate & Biscuit market           2
D.Milherou (1999)
3) The market

   a)   Market Trends

   b ) Market Penetration                                                18

   a)   Regulatory Environment

   b)   Import regulations

   c)   Foreign currency exchange regulations

   d)   Local regulations                                                19

   e)   Qualifications for Trading

   f)   Import Licensing

   g)   Import Regulations

   h)   Tariffs

   c)   Customs                                                          20

   j)   Product Labelling and Market Requirements

   k)   Free Trade Zones and Warehouses

   l)   Policy on Capital                                                21

4. Food distribution structure

   a)   Food Transport Development

   b)   Distributors

   c)   Distribution and Sales Channels - Business Licenses              22

   a)   The Structure of the Food and Beverage Retail Sector

5. Major Outlets for local and imported processed foods

 and confectionery                                                       23

   a)   The role of Dry Markets, Department Stores and Shophouse Retailers

   b)   The New Mini-market

   c)   Mini-market and Supermarket Users and Usage Today                24

Vietnam | Chocolate & Biscuit market             3
D.Milherou (1999)
:: Confectionery Market Overview

THE CHOCOLATE MARKETG                                                   29

    1) Consumption and Supply

    2) Foreign Supplies Vietnam's leading suppliers of chocolate

    3) Singapore and Hong Kong's role as re-exporters of food to Vietnam 30

    4) Other market characteristics                                     31

    5) Overview of the market status of chocolate

    6) information about chocolate importers                            32

    7) Imported product pricing in November 1999                        34

    8) Chocolate & confectionery factories in Vietnam                   36

    9) Background Information

    10) Information about the major chocolate
        and biscuits factories in Vietnam                               37

    11) Local Chocolate and Biscuits retail pricing in November 1999    39

    12) Research projects                                               40

    13) Macro Forces for Change on Vietnam's Food and confectionery Markets

:: Addresses list

1 – Administration                                                      43
    a) Hanoi
    b) Ho Chi Minh

2- Import/export control agencies located in Ho Chi Minh City           46

3 - Foreign representative offices in Hanoi                             47

4 - Foreign representative offices in Ho Chi Minh City                  49

5 - General food commodity importers                                    52

Vietnam | Chocolate & Biscuit market             4
D.Milherou (1999)
:: The chocolate market in the major countries of Asia

1) Data on the per capta annual consumption of chocolate :

      Per capita cocoa consumption
             (kg/head) 1996/97
 China                      0.015
 Hong Kong                  0.248
 Indonesia                  0.049
 Japan                      1.043
 Republic of Korea          0.275
 Malaysia                   0.197
 Papua New Guinea           0.019
 Philippines                0.239
 Sri Lanka                  0.087
 Thailand                   0.144
 Vietnam                    0.05

Reference: ICCO Quarterly Bulletin of Cocoa Statistics, 24 (3) 1997/98

2) Production of cocoa beans (in thousand tonnes)

The following table gives figures for the production of cocoa beans of the top seven producing countries in the
world and in Asia in 1997/98

1 – Ivory Coast                    1110.0

2 – Ghana                           395.0

3 – Indonesia                       320.0

4 – Brazil                          160.0

5 – Nigeria                         155.0

6 – Cameroun                        125.0

7 – Malaysia                         95.0

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D.Milherou (1999)
3) The Asian confectionery market:

In Asian emerging markets per capita confectionery consumption is about 1kg and is growing
at a rate of 5-6%. It is estimated that the world confectionery market will double in the next 20
years as these nations increase their per capita consumption to 4kg.

In Asia the demand for chocolate is often constrained by a lack of tradition of consuming
chocolate and the lack of refrigeration, both for the distribution of the product and at point of
sale. Chocolate does have a strong gift association in most markets and this leads to a
certain amount of seasonality in the market.

A 1997 ERC Statistic's International report on the confectionery market covered Indonesia,
Malaysia, the Philippines, Singapore, South Korea, Taiwan and Thailand. It found that the
seven countries had an average per capita confectionery consumption of 972g, an 18.7%
increase on the 1990 consumption level. Sugar confectionery dominates and chocolate only
accounts for 22.1% of confectionery consumption.

4) The major markets in Asia :

A) South Korea :

In South Korea domestic businesses dominate the market accounting for 87% of total value
sales in 1996. Fifty percent of the market is accounted for by sugar confectionery. In South
Korea chocolate consumption is 625g per head. Since 1993 the market has suffered from
declining sales due, it is thought, to increasing concerns about nutrition translating into
declining demand for high calorie products like chocolate. The leading confectionery
company is Lotte with a third of the chocolate market. Other prominent companies are Hai
Tai, Tong Yang and Crown.

B) Taiwan

Per capita confectionery consumption in Taiwan is just under 8kg. This market is strongly
sugar oriented with sugar accounting for two-thirds of the market in 1996. In Taiwan
chocolates tend to be purchased as gifts.

C) Singapore

Singapore has a per capita consumption of 3.1kg in 1996, with sugar twice as popular as
chocolate. This is despite Singapore producing 44,650 tonnes of chocolate and 12,780
tonnes of sugar confectionery. Most of the chocolate produced is destined for export. The
major companies are mainly foreign with Nestlé the market leader in confectionery generally,
followed by Cadbury, which leads the chocolate sector, and Mars.

D) Malaysia

In Malaysia per capita consumption levels have increased 65.4% between 1990 and 1996 to
1.7kg. The majority of consumption (67.2%) is of sugar confectionery. Chocolate is often
considered a luxury item. But despite this, the demand for chocolate has risen 118.8%
between 1990 and 1996. Cadbury Malaysia is the leading player on the market, followed by
local company Upali and Chocolate Products Trading.

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D.Milherou (1999)
E) The Philippines

Philippine per capita confectionery consumption has seen a 39% increase between 1990 and
1996 to 819g. The Philippine market is more evenly split between sugar and chocolate than
other Asian markets with sugar at 55.5% and chocolate at 40.4% of consumption. Chocolate
consumption has increased by 168.3% between 1990 and 1996. The locally produced
segment of the market is dominated by the Consolidated Foods Corporation and the
Philippine Cocoa Corporation, which is owned by Nestlé. These two companies account for
53% of the market.

F) Indonesia
Indonesian per capita confectionery consumption has risen 60.7% between 1990 and 1996.
Sugar confectionery accounts for 81% of the market in volume terms. However the chocolate
volume has doubled between 1990 and 1996. The Indonesian market is very fragmented
with the top ten companies accounting for only 53% of the confectionery market. The market
leader, domestic producer Mayora Indah, accounts for 9.1% of the market. It is followed by
Kraft Jacobs Suchard, PT Ceres and PT Cipta Rasa Primatama.

G) Thailand

Per capita confectionery consumption in Thailand has risen 35.7% between 1990 and 1996
to 437g. Sugar confectionery accounts for three-quarters of the market in volume terms. This
is followed by chewing gum and then in third place by chocolate. However, chocolate
demand has increased by 173% between 1990 and 1996. Nestlé's subsidiary, Nutritional
products, leads the chocolate market.

H) Japan

Traditionally chocolate consumption has been low in Japan, per capita consumption in
1995/96 was 1.11kg. The Chocolate and Cocoa Association of Japan said that of around 2m
tonnes of confectionery produced in Japan in 1997, chocolates only accounted for around
189,000 tonnes, while red bean cakes have the largest share at 376,000 tonnes.

I) China

A Data monitor report shows that the value of the Chinese market for chocolate has
increased 40% since 1992. Per capita consumption in China is 0.55kg/head. By 2001 the
Chinese market volume will have increased by 13% compared to 1.2% in the USA and 1.5%
in the UK

J) Trend of the Vietnamese market :

Vietnam is the fastest growing confectionery market in the Asia Pacific region and the
market value has more than trebled since 1993. In 1993 chocolate consumption was 0.02
kg/head and this has grown 22.6% to 0.05kg/head in 1997.

I will develop the Vietnamese chocolate & biscuits market after a global presentation of
Vietnam and its food market.

Vietnam | Chocolate & Biscuit market         7
D.Milherou (1999)


1) Market Size/Growth/Trend

a) Background Information

The Socialist Republic of Vietnam is a small but densely populated country with over 79
million people living in 329,560 square kilometres. The land area of Vietnam is comparable to
Germany. It is located between China and Cambodia and has a 3,444 km coastline on the
South China Sea.

Hanoi, the capital of the country, is also its administrative centre. However, much of the
industrial development so far, has taken place in the south of the country, particularly around
Ho Chi Minh City (formerly Saigon).

Vietnam foreign trade was once considered the most developed one in the region. However,
its development has been constrained by over 30 years of war, decades of unsuccessful
collectivisation programs, and the loss of financial support from the old Soviet Bloc. As a
result, there still is a degree of poverty and economic backwardness.

The southern and central regions of Vietnam have a tropical climate. The northern region has
a distinct winter. There are occasional typhoons with extensive flooding.

•     Average mini/maxi temperatures in northern Vietnam :

    Month         Hanoi
      J       12° C / 20° C
      F       14° C / 22° C
     M         17°C / 23° C
      A       21° C / 27° C
     M        23° C / 32° C
      J       26° C / 33° C
      J       26° C / 32° C
      A       26° C / 32° C
      S       24° C / 31° C
     O        22° C / 29 ° C
      N       17° C / 26 ° C
      D       16° C / 23° C

•     Days of rain

    Month        Hanoi          Ho Chi Minh City
      J            9                    2
      F           14                    1
     M            15                    2
      A           14                    5
     M            14                   17
      J           15                   22
      J           16                   23
      A           16                   21
      S           13                   22
     O            10                   20
      N            7                   11
      D            7                    8

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D.Milherou (1999)
Because of the high temperatures and the high humidity rate almost all year long it’s quiet
difficult to preserve chocolate and confectionery in good conditions.

Vietnam is predominantly an agricultural country with about one-sixth of its land under
cultivation. Natural resources include coal, phosphates, manganese, bauxite, chromate,
offshore oil deposits and forests.

As a result of its policy to expand its foreign economic relations, trade relations between
Vietnam and the rest of the world have seen rapid development especially with South - East
Asian countries. Vietnam is a communist state and is politically stable. There are no ethnic

b) Economic Indicators

   Economic Indicators          1994 1995 1996 1997                                     1999
 GDP at current prices (billion
                                15.5 20.3 23.2                                           137
            US$)                                25
                                                                          $ 1.755 (lowest GDP in East Asia
     Per Capita GDP (PPP)
                                                                              after Cambodia and Laos)
      Real GDP growth %                 8.8      9.5       9.3     9      4.0 (average growth in East Asia)
     GNP per capita (US$)               214      275       301    301     310 (lowest GNP in East Asia after
                                                                                 laos and Cambodia)
  Consumer price inflation %            14.4    12.7       4.5    3.6     1.4 (one of the highest inflation in
                                                                                      East Asia)
  Export F.O.B. (billion US$)           4.1      5.2       7.1    8.9    9.3 (lowest exports in East Asia after
                                                                                 laos and Cambodia)
  Imports F.O.B. (billion US$)          5.3      7.5   11.1      11.2
      Cur.acct balance                                                    - $1.8 b. (lowest balance in Asia)
    Unemployment rate (%)                11     11.9   11.3 11.25
     People per telephone                                                48.2 (last country in East Asia after
                                                                                Cambodia and Laos)
         Life expectancy                                                  68 (fourth worst life expectancy in
                                                                                      East asia)
          Literacy rate                                                  91.9 % (very good rate in East Asia)
        Urban Population                                                   21% (one of the lowest in Asia)
            Population                                                    80 million (third after China and
                                                                                 Japan in East Asia)
           Pop 0-24 yrs:
           Pop 25-34 yrs:
           Pop 35-64 yrs:
          Pop Over 65 yrs

  Exchange Rate (av) (VND:
                                       10980 11048 11050                                14000
           USD)                                                  11800
Sources: International marketing Data & Statistics
1998, Vietnam Business Journal, MPI
AsiaWeek October 15 - 1999

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D.Milherou (1999)

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