Masan Consumer Qwik Report

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http://masangroup.com/masanconsumer/en/qwik-report[12/24/2011 11:14:36 AM]
ABOUT US
OVERVIEW
We are one of Vietnam’s largest consumer products companies with leading market share positions in the condiments and
convenience food categories. We have grown our product portfolio, domestic sales and distribution channels since 2000 to
become a leader in Vietnam’s branded consumer food market in both the premium and mass-market segments. Our key
brands include Chin-su (soya, fish and chili sauces), Tam Thai Tu (soya sauce), Nam Ngu (fish sauce), and Omachi and
Tien Vua (instant noodles). With a reputation for quality, we are well-placed to expand our presence in other high-growth
packaged food categories.
Building upon our success in the food industry, we also plan to diversify our operations into other "fast moving consumer
goods”, including beverages. To this end, in March 2011, we transformed Masan Food into a consumer platform and
grouped our food-related businesses within a newly formed, 100%-held entity called Masan Food.
Our business has grown considerably over the past several years, with particular success in our condiments and instant
noodles segments. Our revenue and net profit have grown from VND571bn and VND29bn in 2006 to VND5,586bn and
VND1,253bn in 2010, respectively, representing respective compounded annual growth rates of 76.9% and 156.7%.
At Masan Consumer, our vision is to be:
Vietnam’s leading consumer company by sales, profitability and brand recognition
The destination for top talent and recognized as the best workplace in Vietnam
The symbol for quality and a source of pride among Vietnamese
HISTORY

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STRATEGY
SECTOR STRATEGY
Masan Consumer deploys a strategic framework in deciding "where to play”. Our sector selection criteria include:
Food and beverage categories where the market opportunity is large and there is a potential market size of at least
US$500 million
Markets where we have the ability to build a premium brand and generate high margins (typical gross margins of at least
30%)
Competitive landscapes where the market is dominated by state owned enterprises or is fragmented and there is a clear
path to consolidation
Markets where we can create value by product localization, through focusing on local taste and health
EXECUTION STRATEGY
Our execution strategy is to:
Come to market with a differentiated product
Create a premium brand and launch with a strong marketing effort
Leverage our extensive distribution platform and premium brand equity to penetrate mass market segments

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Employ and incentivize a world-class experienced management team by making them stakeholders in the business
FINANCIAL STRATEGY
We have a disciplined financial strategy. We:
Aim to achieve 30%+ gross margins which allows us to maintain our strong marketing strategy and reinvest in acquiring
and consolidating business platforms to achieve a sustainable leadership position
Deploy low capital expenditure - we have an asset light entry strategy for new categories in order to focus on generating
a 25%+ ROE
Maintain a conservative balance sheet with leverage below 3x debt/EBITDA ratio in order to adhere to the standards of
a BBB credit rated company
Use a "cash on delivery” model, enabling us to optimize our working capital position and help fund our growth
GROWTH STRATEGY
We are focused on growing this platform to enable us to become a market leader:
In our existing categories, we focus on shifting consumers to premium brands and changing consumer behavior towards
higher consumption
We enter into high growth adjacent categories by leveraging premium brand halo and an underleveraged platform
We enter into new attractive categories that fit our sector strategy through inorganic growth
OUR PARTNERS
SHAREHOLDERS
INVESTOR CENTER

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NEWS
Masan Consumer Acquires 50.11% of Vinacafe Shares
13 October 2011
Masan Group Raises US$159 Million with 10% Sale of Masan
Consumer to KKR The Largest Ever Private Equity Transaction in
Vietnam
1 January 2011
EARNINGS RELEASE
CORPORATE PRESENTATIONS
2010 Annual Report
25 April 2011
2009 Annual Report
29 April 2010
COMPANY RESEARCH
NEWS
PRESENTATIONS & REPORTS
FINANCIAL INFORMATION
With robust bottom line growth, combined with increasingly efficient working capital management, Masan can attain high
levels of cash conversion and generate strong cash flow.
Robust bottom line growth …

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… combined with increasingly efficient working capital management ...
… allows Masan to attain high level of cash conversion and generate strong cash flow

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Audited Financial Statements
Audited Financial Statement 2010
Audited Financial Statement 2009
AWARDS AND RECOGNITION
2010

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2009

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2008
2006
2005

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VIETNAM FOOD & BEVERAGE
Historically, Vietnam relied primarily on agriculture as a source of output, but has shifted towards a more market-oriented
economy since the initiation of the "Doi Moi” (renovation) socialist-economic reform in 1986 and joining the World Trade
Organization in 2006. These market liberalizations have helped Vietnam become one of the fastest growing economies in
the region with an annual GDP growth rate (CAGR) of 19.6% between 2005 and 2009. The Vietnamese population has
benefitted from the strong economic growth. Their increasing affluence has stimulated consumer spending per capita, which
rose by a CAGR of 19.7% between 2005 and 2009.
The Vietnamese economy is projected to be one of the fastest developing economies in Asia, largely propelled by having:
One of the youngest demographic profiles in Asia with high trainability; 68% of the country’s approximately 89 million
people are under 40 years of age
The second-largest real GDP growth in the region over the past 10 years with average growth of 7.2%
One of the world’s leading markets for consumer confidence with retail sales CAGR of 14.0% over 10 years and private
consumption accounting for 64.3% of GDP in 2010
An investment-intensive economy with investments accounting for 41.9% of GDP in 2010
Continued commitment from global investors with FDI disbursement increasing by 10% to US$11 billion in 2010
Structural reforms that have improved Vietnam’s business environment and have supported growth in foreign and
private investment
A Generous endowment of natural resources including oil, minerals and productive land
Political stability and openness to foreign direct investment
The Vietnamese economy recovered strongly in 2009 from the global financial crisis with real GDP growth of 5.3% per
annum, the third fastest in Asia after China and India. Looking forward, Vietnam is expected to achieve stable real GDP
growth rate of 6.9% in 2011, underpinned by strong growth in consumption, investment and exports coupled with measures
undertaken by the State Bank of Vietnam to curtail inflation.

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The packaged food and beverage market is expected to grow to US$16 billion by 2015, from US$12 billion in 2010.
Currently, local and regional companies control the market with a market share of ~80%, driven by consumers’ preference
for local products. The consumer goods sector in Vietnam is under penetrated; on a per capita basis, spending on
packaged foods and beverage is still relatively low compared to its emerging market peers. This is expected to grow as
GDP per capita rises. In addition, other key growth drivers include:
A shift from unbranded to brand products
The emergence of modern trade;
A continued shift to premium products
Increasing demand for packaged/convenience foods
The rise of cold supply chain
BEVERAGES
ASIAN SPECIALTY DRINKS
Coming soon ....

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INDUSTRY REPORTS
Coming soon...
OUR PEOPLE
Truong Cong Thang
Chief Executive Officer
Truong Cong Thang joined Masan Consumer in 2002 as Deputy General Director, and has served as CEO since 2008.
Prior to joining Masan Consumer, Thang spent six years at Procter & Gamble Vietnam as Marketing Director where he
successfully launched some of their global brands in the Vietnamese market.

At Masan Consumer, Thang has steered the company towards developing its domestic business and focusing its
investment in building premium brands.

Thang graduated from Hanoi National Economics University.
Castillo Santos
Chief Operation Officer
Castillo Santos is a production and supply chain expert with 31 years’ experience, including 14 years at Unilever Vietnam.
He joined Masan Consumer in 2008 and oversaw the expansion of our production facilities, including the installation of the
world’s first fully-automated fish sauce production line.

Castillo has a Bachelor of Science degree in Chemical Engineering from the University of the Philippines.
Pham Dinh Toai
Chief Financial Officer
Pham Dinh Toai joined Masan Consumer in 2009 and is currently our Chief Financial Officer and a board member. Prior to
joining Masan Consumer, Toai was Financial Analysis Director at Unilever Bestfoods Vietnam from 2002 to 2005, and
Finance and Accounting Director at Unilever Vietnam from 2005 to 2009.

Toai has a Bachelor’s degree in Corporate Finance and Accounting from the University of Finance and Accounting in
Vietnam. He also has a Bachelor’s degree in Information Technologies from Vietnam’s University of Technical Education.

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Dr. Pham Hong Son
Manufacturing Director
Dr. Pham Hong Son joined Masan Consumer in 2000 and is a board member. In addition to serving as our Manufacturing
Director, Dr. Son is the General Director of Masan Industrial, our primary manufacturing facility located in Binh Duong
province. He has also served as General Director of our other manufacturing subsidiary.

Dr. Son has a Bachelor of Science from Kharkov Polytechnic Institute, Ukraine, where he studied in the Faculty of
Transportation Machine Engineering. He also holds a PhD in Engineering from Kansai University in Japan, where his
laboratory focused on Fluid Dynamics & Biomechanics.
Le Thi Nga
Director of Masan Life Science
Le Thi Nga currently is the Director of the Masan Food Life Science Team. She is also a board member of Masan
Consumer. Prior to joining the company in 1997, Nga spent seven years as a Technical Supervisor at the Nam Duong
Sauce Company, and three years as a Manufacturing Director at Viet Tien Food Company. She was also a Director from
2000 to 2002 at Viet Tien Food Processing Joint Venture Company, and a Research and Development Director from 2003
to 2007.

Nga has a Bachelor of Science in Food Technology specialising in the technology of microbiological processing from the
Moscow Technological Institute of Food Industry.
Nguyen Thi Thu Ha
Supply Chain Director
Nguyen Thi Thu Ha is a supply chain expert with 14 years of experience. Prior to joining Masan Consumer, Ha has held a
variety of senior positions, including Planning Diretor, Supply Chain Manager and Logistics Manager across various
companies, such as Tan Hiep Phat, Unilever, Effem Foods, Novatis Pharma and Procter & Gamble.

Ha has a Bachelor of Arts degree in Foreign Trade from University of Economics, Ho Chi Minh City.
Ho Bao Long
Chief Customer Officer
Ho Bao Long brings his 16 years of experience with various multi-national food and beverage corporations to Masan
Consumer. Prior to joining Masan Consumer, he held various senior positions, including Sales Manager, Sales Director at
Unilever Vietnam, Johnson and Johnson Vietnam, and Kimberly Clark Vietnam.
Long holds a MBA from University of Florida, U.S.

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Nguyen Tuan Viet
Marketing Director
Prior to joining Masan Consumer, Nguyen Tuan Viet had established a strong & solid background with Unilever Vietnam in
the past 9 years. He had been with various strategic and well-loved brands such as Senior Brand Manager for P/S, Group
Brand Manager for Sunsilk, Group Brand Manager for total Omo and is the name behind many successful innovations and
campaigns of these brands.
Viet graduated from University of Economics, major in Foreign Trade.

Truong Hoang Long
Human Resources Director
Truong Hoang Long has more than 14 years’ experience in Human Resources. He has worked across a range of industries
for companies that include Maersk, Mead Johnson and Unilever. Before joining Masan Consumer, Long was the HR
Director of the Vietnam office of Computer Sciences Corporation (CSC), the world’s third largest software development
company. There, he managed all HR activities for the company’s 650 employees and was instrumental in reducing staff
turnover by 17% in two years.

Long holds a Master’s of Management from Ho Chi Minh Open University and Solvay Business School of Belgium.
OUR PRODUCTS
FISH SAUCE
SOYA SAUCE
CHILI SAUCE
INSTANT NOODLES
BUSINESS
MARKETING

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OVERVIEW
Our branding and marketing strategies have been instrumental to the success of our business. As at December 31,
2010, our marketing department consisted of 45 full-time employees divided into two groups: brand development and
market operations.
BRANDING STRATEGY
We have adopted an umbrella brand strategy to reach a broad range of consumer groups. Each of our principal product
lines has a premium brand ( Chin-su brand for sauces and the Omachi brand for instant noodles) and a mass-market
brand (Nam Nu brand and Tam Thai Tu for sauces and Tien Vua for noodles), meeting the demands of customers of
different levels of affluence. The introduction of product variants further permits us to sell to consumers in different
regions and with varying tastes.
We actively defend our brands from infringement and reselling by third parties. We also monitor the products of our
competitors through our distribution network. Should we learn of material infringement of our trademarks, we will take all
necessary steps, including legal action, to protect our brand image.
MARKETING STRATEGY
Our primary means of reaching our target consumers are television advertisements, which are generally 15 or 30 second
commercial spots that focus on the health benefits, taste and affordability of our products. In 2010, Masan Consumer
had more than 21,700 television commercial spots nationwide.
To reach rural consumers, we advertise through more than 16 newspapers and magazines with a combined circulation
of approximately nine million copies in 2010, reaching more than 61% of our customer base.
We also advertise through radio, building banners, bus stops in key cities and advertisement spreads on the sides of
buses. Additionally, we market our products with a variety of other activities such as outdoor campaigns and in-store
promotion events.
PRODUCT MANAGEMENT STRATEGY
Our product management strategy has been fundamental to our success. We manage our current portfolio of brands by
product segment and, within each product segment, by target market.
We have a common branding strategy, for instance, using Chin-su as an umbrella brand for premium soya, fish and chili
sauces. This maximizes the value of our brands, establishes a reputation for premium quality across our products, and
generates economies of scale in advertising and promotion.
SALES AND DISTRIBUTION
OVERVIEW
We have developed a pan-national distribution network with over 141,000 points of sale, covering all of Vietnam’s 64
provinces. Our network includes all major modern trade channels, such as hypermarkets, supermarkets, and convenience
stores, as well the traditional, primarily independent local operators. At the end of 2010, we had established exclusive
relationships with 168 distributors and 1,453 dedicated salesmen throughout Vietnam.

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We operate five distribution centers, strategically located in the Binh Duong, Tan Binh, Da Nang, Hung Yen and Hai Duong
provinces to provide our distributors with products within 24 hours of an order being placed. These distribution centers
collectively handled 455,000 pallets in 2010. To support our distributors throughout Vietnam, we provide them with regional
exclusivity and work closely with them to ensure the effectiveness of their sales force and smooth coordination.
DISTRIBUTION MAP
The map and table below show the location of the distribution centers throughout Vietnam and provides a summary of the
number of distributors, salesmen and points of sale by region as of December 31, 2010:
Same day delivery of our entire product portfolio anywhere in the country

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DISTRIBUTION FLOW
One of only a few companies with direct outreach to rural areas
LIFE SCIENCE
OVERVIEW
Our in-house research and development team, Masan Consumer Life Science is comprised of approximately 50

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employees tasked with improving the range and quality of our products. The Life Science team works closely with our
marketing team to develop products that meet the demands of Vietnamese consumers, such as the Omachi dry noodles
with spaghetti sauce that we introduced in 2010 to target customers in the premium segment.
Masan Life Science aims to enhance Masan Consumer’s competitive position and reputation as one of the most unique
and effective food companies in Southeast Asia by providing high value and superior quality products.
Masan Consumer’s ability to innovate is evidenced by numerous successful developments, which include:
"Low-salt” Chin-su sauce
"No-urea” Nam Ngu sauce
"Zero trans-fat oil” and "No color chemical dyes” for Tien Vua noodles
Omachi noodles mixed with spaghetti sauce
Masan Life Science Center is one of the most advanced R&D centers in Vietnam. The Life Science division has developed
seven new formulas to date that do not exist in the seasoning processing industry, and has the capability to launch
approximately 30 new products each year.
NEAR TERM OBJECTIVES
PRODUCTION
We currently operate four production facilities, at Binh Duong, Tan Binh, Phu Quoc and Hai Duong, with a total of 23
production lines. These facilities allow us to manufacture products with consistent taste and texture, further strengthening
the quality of our brands.
We are expanding our Binh Duong facility to accommodate the increase in sales volume we have experienced since 2007
and we expect that it will become our principal production facility in 2011 once the expansion is completed. The initial phase
of this expansion was completed in 2010 and was dedicated to automating the fish sauce production line.
An additional facility in Hai Duong was completed in June 2009 and production of instant noodles commenced in 2009. We
do not engage in contract manufacturing or outsourcing of our production to third parties. This enables us to keep strict
control over the quality and output of our sauce and instant noodle products.
The table below provides an overview of each of our facilities:

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MATERIAL PROCUREMENT ORGANIZATION
(MPO)
KEY RAW MATERIALS
For sauces: anchovies, dehydrated vegetables, soy, chilies, and various flavorings and spices
For instant noodles: flour, palm oil, dehydrated vegetables, and various flavorings and spices
Packaging materials such as paper labels, carton boxes, polypropylene or paper-based cups/bowls, plastic bags and
glasses are significant components in the production cost
PROCUREMENT STRATEGY
Our purchasing department (MPO) at our Ho Chi Minh City headquarters is responsible for sourcing and negotiating with
suppliers for all of our raw materials. Our subsidiaries then enter into the agreements with our suppliers negotiated by the
purchasing department.
Our purchasing department is also responsible for developing and maintaining the optimal number of reliable suppliers to
meet our requirements. The department currently procures raw materials from over 60 suppliers under long-term contracts
to ensure consistency and high quality. Suppliers whose long-term performance record with us demonstrates reliability are
considered "approved suppliers” and will continue to be engaged under long-term contracts. This strategy helps us to
minimize the risk of working with suppliers who under-perform by missing deliveries, supplying materials of inconsistent
quality or that are not in conformance to specifications, or unexpectedly increasing prices.
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Masan Consumer Qwik Report

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