Vietnam’s largest coffee bean exporter, Intimex Group, is looking to expand its business this year, with a plan to offer 49% stake to foreign investors.
Intimex Chairman Do Ha Nam told Bloomberg in an interview in Ho Chi Minh City that the company will issue new shares for the stake sale. Negotiations are expected to begin once the instant coffee factory in Binh Duong province reaches its target capacity of 4,000 tons a year this quarter.
While Nam declined to provide further details of the stake sale, it’s long been known that Intimex aims to surpass Nestle as the country’s biggest instant coffee supplier.
“Several foreign investors have been interested in our stake,” Nam said in an interview in Ho Chi Minh City. “There’s been no other company in the world that exports as much coffee beans as we do.”
Intimex exported 400,000 tons of robusta beans last year, a sharp 20% drop from 2019 due to the coronavirus pandemic that halted production and exports. But Intimex’s number is still more than 300,000 tons of green beans shipped by Cooxupe, the top producer and exporter of Arabica coffee in Brazil.
Previously a state-owned company founded in 1995, Intimex was officially established as Intimex Joint Stock Company in 2006. The “multi-sector, multi-profession and multi-nation” operating network of Intimex Group has now stretched nationwide with six branches, 14 subsidiaries in Vietnam and one subsidiary in Singapore.
In its early days, it had one headquarters and three branches, 91 staff, limited working facilities, and only 14.4 billion VND charter capital. But the company has grown in great measures over the last decade and has become one of the most prestigious brands in Vietnam’s agricultural sector.
It also has a total of 11 coffee factories, located on the Central Highlands, focusing on high-quality coffee for export.
Intimex, which also exports rice, cashews, and black pepper, expanded trade to most of the world’s biggest markets, including Europe, the USA, Africa, Australia, China, and the ASEAN. In 2019, the company reported shipments of almost $1 billion, and the number can only grow from there. In fact, Nam sees the company’s 2021 revenue at 40 million VND ($1.7 billion).
Coffee Production and Export Amidst COVID-19
Vietnam exported 1.7 million tons of coffee in 2020, earning $2.7 billion, the Ministry of Agriculture and Rural Development reported. The number represents 18 % of the global market share, while the sum equals to more than one-tenth of coffee world sales.
The figures have dropped significantly, according to the Vietnam Coffee-Cocoa Association. The country’s coffee exports and consumption in 2019-2020 have taken a hit due to the global health crisis, with coffee export output and turnover down by around 5%. Export turnover of processed coffee products also dropped by 8.7%.
“Due to social distancing, many cafes could not operate during the outbreak. Foreign tourism is also closed, and tourists play a big part in Vietnam’s coffee consumption, so domestic consumption saw a drop, said Luong Van Tu, chairman of the association.
Experts forecast that the coffee market may recover slowly as COVID-19 (plus the impact of storms, climate change and aging crops) may further hamper production and exports. The fact that tourism activities may not fully resume this year, more coffee shops will also be forced to shut down.
Amidst the present challenges, Vietnam Coffee-Cocoa Association is shifting focus on renewing coffee crops and helping businesses with exporting opportunities via the EU-Vietnam Free Trade Agreement and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
To achieve this, the coffee industry needs to standardize its procedures for farming, harvesting, and processing to make sure coffee products from Vietnam meet the EU’s standards on quality, crop protection agents, and food safety.