The food processing industry in Vietnam continues to exhibit robust growth in mergers and acquisitions (M&A), driven by its significant development potential and appeal to foreign investors.

Nguyen Van Thu, chairman of G.C Food—a leading producer of aloe vera and coconut jelly in Vietnam—highlighted the strong export market for processed fruits and vegetables as a key factor behind the sector's success. Thu revealed that since last year, the company has been approached by various foreign investment funds and strategic partners, mainly from Singapore, seeking opportunities for co-management, joint product development, and market expansion.

Thu also stated, “If G.C Food transitions from the unlisted public company market (UPCoM) to the Ho Chi Minh Stock Exchange in 2025, we anticipate raising capital to enhance liquidity, expand operations, and establish new production facilities. Our priority, however, remains preserving management autonomy and adhering to our long-term growth strategy over the next 5–10 years.”

In its Q3 2024 financial report, G.C Food announced consolidated revenues of nearly $7.2 million, marking a 31% year-on-year increase. Post-tax profits surged by 84% to over $958,000. For the first nine months of the year, the company’s revenue reached $18.3 million, significantly higher than the $15.6 million recorded in the same period last year, while post-tax profits more than doubled to $2.3 million.

Similarly, Sa Ky Foods Corporation’s CEO, Nguyen Kim Thanh, noted growing interest from Japanese investors in Vietnam's food processing sector, attributing it to the country's youthful population and rising consumer demand. "While investors from Japan, Korea, and the US have shown interest in acquiring over 51% of our company, we carefully evaluate collaborative opportunities to ensure alignment with our goals," Thanh explained.

Industry Insights

Vietnam’s food processing sector is becoming a critical player in global supply chains. Partnerships with international corporations, such as Sojitz and Marubeni, enable Vietnamese firms to adopt advanced processing technologies and access broader distribution networks. These collaborations are essential for meeting the rising demand for processed food in export markets, particularly in Asia and Europe.

Sustainability and Innovation

The sector is increasingly embracing sustainable practices to attract environmentally-conscious investors. Companies are adopting energy-efficient technologies, reducing waste, and promoting organic certifications to meet global sustainability standards. For example, firms producing processed fruits are now utilizing every part of raw materials to minimize waste and maximize output.

Additionally, innovation in product development, such as health-focused nutrition products and plant-based alternatives, is positioning Vietnam as a hub for modern food processing solutions.

Comparative Advantage

Vietnam’s strategic location, competitive labor costs, and government incentives give it a unique advantage over regional peers. While countries like Thailand focus on premium food processing exports, Vietnam’s strength lies in its diverse offerings and cost-effectiveness. These attributes make it a preferred destination for investors seeking long-term growth opportunities.

Future Outlook

The industry is poised for exponential growth over the next decade, driven by government support and increasing foreign investment. Initiatives such as tax exemptions for export-oriented businesses and infrastructure development are expected to further bolster the sector.

Moreover, Vietnam’s rising disposable incomes and urbanization trends suggest significant growth potential in the domestic market, particularly for high-quality, processed food products.

With its thriving M&A activities and growing international interest, Vietnam’s food processing industry is on track to become a global leader. However, the influx of foreign investors presents challenges for local enterprises, pushing them to innovate, improve quality, and diversify offerings to remain competitive in an evolving marketplace.