BCorp and Silver Bird in Vietnam food venture

Malaysia's Berjaya Corp Bhd (BCorp) and Silver Bird Group Bhd plan to set up a bread and confectionery production and marketing facility in Ho Chi Minh City, Vietnam to tap a market that's growing more affluent.

In a statement yesterday, BCorp said the project provides the company with an opportunity to invest in the food production sector in Vietnam.

BCorp said its wholly-owned Berjaya Group Bhd, through its unit Berjaya Group Capital (Cayman) Ltd, had entered into a memorandum of understanding (MoU) with Silver Bird to jointly carry out activities in the production, marketing and distribution of confectionary and bakery products in the country.

The estimated total investment cost of the project is RM30 million, and BCorp and Silver Bird would conduct feasibility studies which would cover the project having a daily production capacity of 120,000 loaves.

Subject to the conclusion and acceptance of the studies, BCorp and Silver Bird would form a 65:35 joint venture company, or under another shareholding ratio determined after conclusion of the studies, with a total equity participation of about RM15 million, BCorp said.

It said the project in Vietnam was conditional upon securing the right to use a factory measuring at least 1.62 hectares in or near Ho Chi Minh City and on obtaining approvals from relevant authorities.

"If the project is found viable, the formation of the JV company for the project is then expected to be implemented in the second quarter of 2008," BCorp said.

Given Vietnam's population base which was increasingly affluent and its vibrant economy, the company was hopeful there would be strong demand for quality bread and related products, it added.

BCorp, via its subsidiary companies, holds a 21.94% stake in Silver Bird.