Vietnamese retail conglomerate Masan Group increases its investment in domestic coffee chain Phuc Long Coffee & Tea by more than a third, raising its value to $453m
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Phuc Long plans to accelerate the opening of stores in Vietnam during the second half of 2022 | Photo credit: Masan Group
Masan Group has increased its majority stake in Phuc Long Coffee & Tea, taking its ownership to 84% in a deal that values the Vietnamese coffee chain at $453m.
The Vietnamese retail conglomerate took an additional 34% stake in the company, worth $154m, just six months after becoming the majority stakeholder in a deal worth $110m.
Masan Group first acquired a 20% stake in Phuc Long for $15m in May 2021. As part of the deal, Masan Group-owned retailer VinCommerce agreed to develop the Phuc Long kiosk format across its network of more than 2,200 VinMart+ supermarket stores in the country.
As of the end of its first quarter, Phuc Long operated nearly 100 standalone stores and approximately 750 kiosks, most of which are in Vietnam’s capital, Ho Chi Minh City.
The coffee chain plans to accelerate the opening of stores in Vietnam during the second half of 2022, alongside developing a new menu for kiosks to improve their profitability.
Earlier this year Masan Group said it expected Phuc Long to achieve full-year revenues of VND 2.5-3trn ($110-$153m) for 2022. However, despite sales growth of 38%, Phuc Long revenues only reached VND 820bn ($35m) in the first six months of the year.
Project Café East Asia 2021 reported Vietnam as East Asia’s fifth largest branded coffee shop market by number of outlets, behind South Korea, China, Japan and Thailand. World Coffee Portal forecasts the Vietnamese branded coffee shop market will exceed 5,200 outlets by 2025.