'Must-have' fish sauce helps create new Vietnam billionaire

SEOUL (BLOOMBERG)- For Vietnamese consumer tycoon Nguyen Dang Quang, placing his fish sauce and other "must-have" condiments in the kitchen shelves of just about every home in the country has helped make him a billionaire.

Shares of Masan Group, which produces the sauce made from fermented fish that's widely used in Vietnamese cuisine, have more than doubled in the past six months, compared with the 37 per cent gain in Vietnam's benchmark VN Index. That lifted the net worth of Quang, the company's chairman and founder, to US$1.2 billion, according to the Bloomberg Billionaires Index.

"Masan serves consumers with 'must-have' ones like fish sauce, instant noodles, to 'nice-to-have' items like chili sauce, rice soup or sausage," said David Anjoubault, general manager at Kantar Worldpanel Vietnam, a research firm that estimates about 95 per cent of households in the country uses at least one Masan consumer product. "Local food manufacturers like Masan have a good and deep understanding of shoppers' needs and behaviors in the country where localization is a vital success factor."

Quang controls the Ho Chi Minh City-based company through Masan Corp, a closely-held entity, as well as its wholly-owned subsidiary Sunflower Construction Co, according to company filings with the Ministry of Planning and Investment. Quang and his wife have a 49 per cent stake in the holding company, the filings show.

Quang's co-founder, Ho Hung Anh, who's Masan Group's vice chairman, owned 47.6 per cent of the holding company as of September 2015, according to the latest available filings. Anh "contributed to the early stages of Masan Group's development," the company website said. His net worth isn't calculated because his current stake can't be verified.

Masan Group, which makes other food products including instant noodles and animal feed, declined to comment on the two founders' net worth.

Masan Group's shares surged as it recovered from a setback last year following a plunge in pork prices, which it referred to as "the most severe pig price crisis" in history. Pork prices fell after China stopped imports from Vietnam in 2016. The drop in demand for pork drove the group's consolidated revenue 9 per cent lower to 27.5 trillion dong in the first nine months of 2017, according to the company's presentation.

"Pork prices have rebounded as China resumed the imports of Vietnamese pigs, raising expectations for better performance from Masan Group this year," said Vu Xuan Tho, a senior analyst at Korea Investment & Securities in Seoul.

Quang started his business in the 1990s after years of studying in Russia, where he has an MBA from the Plekhanov Russian Economic University. He also received a doctorate in technical sciences from the National Academy of Sciences of Belarus, according to Masan Group's website.

The billionaire saw an opportunity as Russia was going through a period of economic transition at the time, and started selling instant noodles to Vietnamese living in the country. He eventually built a factory to produce 30 million packages a month, and expanded to soy, fish and chili sauces, according to Masan's website. Following the success in Russia, he returned to Vietnam in 2001 and shifted the business focus back on his home market.

Kantar Worldpanel, which tracks shoppers' behavior, ranked Masan Consumer among Vietnam's top three food brand owners last year, along with Unilever NV and Vietnam Dairy Products or Vinamilk.

Techcombank Masan Group is best-known for its fish sauce under brands including Chin-Su and Nam Ngu. Other than meat and packaged food, Masan Group also owns more than a third of Vietnam Technological & Commercial Joint-Stock Bank, commonly known as Techcombank, through an equity stake and convertible bonds, according to its presentation.

The possible listing of the bank has also contributed to the jump in Masan Group's shares, Tho from Korea Investment & Securities said.

Masan Group drew a US$250 million investment from KKR & Co last year, with US$150 million going into its meat-producing business, Masan Nutri-Science. That's the third round of investments in Masan Group from the New York buyout firm, which began in 2011 with a US$159 million investment in what was then Vietnam's biggest private-equity deal.

Quang adds to the two Vietnamese billionaires on international wealth rankings - real estate developer Vingroup's Pham Nhat Vuong and Vietjet Aviation Joint Stock Co's Nguyen Thi Phuong Thao, who's Southeast Asia's first self-made woman billionaire.