Kinh Do Corp., a major producer of baked goods and candy, has become yet another firm affected by Vietnam's prolonged real estate downturn, saying it will halt all property development projects to focus on food production.
The company has decided to delay its plans to build a five-star hotel and apartment complex in downtown Ho Chi Minh City because there have not been any "positive signs" from the property market, Kinh Do CEO Tran Le Nguyen was quoted by thesaigontimes.vn as saying.
Construction was originally scheduled to start in the third quarter.
The confectionery firm will also expand its product lines to include instant noodles, cooking oil and dairy products this November, Nguyen said.
The demand for these products is high, with noodles and cooking oil seeing an annual growth of between 10 and 20 percent, he said.
A boom in the local real estate market in 2007 and 2008 drove many companies to develop property projects. But now, with the sector struggling to find buyers for its huge housing stock, many investors have tried to pull out of the market.
Kinh Do, Vietnam's largest listed confectionery maker, targets a pre-tax profit of VND500 billion (US$23.9 million) this year, up 43 percent from 2011.
Its stock closed last week at VND28,000 on the Ho Chi Minh City Stock Exchange, up 33 percent from the beginning of the year.
The company said sales of traditional mooncakes during the Mid-Autumn Festival in September rose 15 percent compared with the same period last year, helping it boost earnings.
Kinh Do posted a VND5.4 billion loss in the first six months after losing more than VND71 billion from selling its stake at food producer Nutrifood.
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