capital Hanoi came in at 43.

, will be the private equity group’s fourth investment in Southeast Asia and its first in Vietnam. The acquisition, which values Masan at $1.6bn, will be the largest private equity deal in Vietnam to date. It underscores how the biggest private equity groups are turning to emerging markets and seeking smaller deals as they count on rapid economic growth rather than high debt levels to generate big returns. Soaring inflation, regular currency devaluations and a de facto foreign debt default by Vinashin, a state-owned shipbuilder, have shaken investor confidence in Vietnam.

However, Josephine Yei, chief executive of Vietnam-based SBB Securities, said the deal is “inflation resistant”.

“Inflation is a problem here and food is one of the contributing factors,” said Yei. However, she believed Masan Consumer is resistant to inflation because food is a necessity and increased costs can be passed onto consumer, unlike other sectors such as real estate. Fish sauce, or nuoc nam as it is locally known, is a condiment derived from fermented fish and is a staple in Vietnamese cuisine. Another motivation for the stake buy is Vietnam’s growing population, with the number now sitting at 88m, added Yei.

“KKR is bullish on Vietnam,” a KKR spokesman said. “It is a large country with a young a growing population. In the past decade, there has been considerable economic progress, structural reforms, and a notable increase in living standards. Demographic and social trends favor the rise of domestic consumption.” In addition, although Masan is not a monopoly, it lacks real big competitors, Yei noted. Vinamilk, a major food producer, focuses on dairy products and Kinh Do, another domestic food producer, focuses on bakery, cakes and confectionary foods, she said.



Masan Group is a blue chip companies with a good management team, she said, adding that since listing on the Ho Chi Minh Stock Exchange in late 2009, the company’s stock price has increased over 160 per cent despite the sub-par performance of the stock market.





Vietnam's controversial 'dictator' cuts red tape

By Ian Timberlake, AFP 16 April 2011



He has been called a dictator and is dogged by rumours of corruption but many agree that Nguyen Ba Thanh has rare talents in a country choked by bureaucracy: He gets things done. As Vietnam looks to retool its economy, some foreign investors say the city of Danang, where Thanh is the local Communist Party leader, could be an example for the rest of the country.



"I think it should be the model," said Peter Ryder, chief executive officer of Indochina Capital, which invested about $300 million to develop beachfront properties and a downtown highrise in the city. Ryder said Thanh, 58, has an "enormous footprint" and deserves a lot of credit for Danang's popularity among investors, partly thanks to its dynamic political culture. "He's a pioneer," agreed Takafumi Matsumoto, secretary general of The Japan Business Association in Danang.



An index supported by the US Agency for International Development, based on a survey of 7,300 private Vietnamese businesses, placed Danang first among the country's 63 cities and provinces as a place to do business in 2010. The index is based on various criteria including how long it takes to start a business, the amount of "informal" or corrupt charges paid, the time firms waste on bureaucratic compliance, and the initiative level of local leadership. In contrast, Vietnam's business hub Ho Chi Minh City ranked 23 in 2010 while the capital Hanoi came in at 43.



In the quarter-century since communist Vietnam began to turn away from a planned economy to embrace the free market, Vietnam has enjoyed economic growth that has been the envy of many other Asian nations. But excessive bureaucracy remains a top complaint for f
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