Weak management sends Tribeco packing: experts

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Experts say Vietnamese beverage company Tribeco has itself to blame for its impending demise.

Weak management had rendered it unable to compete with major foreign brands in the domestic market, they said.

Tribeco, as the Saigon Beverages Joint Stock Company, once a very well-known brand in the beverage industry in Vietnam, who stood in the list of "Vietnam's high quality products" for over ten years, will hold an irregular shareholders meeting on August 24 to dissolve after a long period of losses, local media reported. 

At the end of 2011, Tribeco earned VND736,3 billion (US$ 35.2 million) in revenue and lost VND92,45 billion (US$ 4.4 million). This year, it forecasts a loss of around VND 140 billion (US$ 6.7 million), which is nearly 34 percent higher.

A former leader of Tribeco said the company usually had "average profits" since prices had to be kept lower than that of other famous brands like Coca-Cola and Pepsi. When the  economy went down, Tribeco became even weaker, Dau Tu newspaper reported.

In the tough race with other major beverage groups in the world, Vietnamese brands can only exist when they develop products in "different branches" to avoid direct competition, said Nguyen Van Viet, chairman of the Vietnam Beer, Wine and Beverage Association.

In 2005, Kinh Do Corporation, one of the largest companies specializing in manufacturing and trading of snack foods in Vietnam, purchased more than 35 percent of Tribeco's shares, hoping to expand its interests.

However, after more than six years, Kinh Do has stopped investing in Tribeco and withdrawn its representatives from the company's management board.

Kinh Do's expectation was not practical, said Nguyen Nam Trung, director of Consultation and Traning company SEG .

"Kinh Do's strategy when investing in Tribeco was wrong since at that time, it still had some problems that were not solved. Therefore, Kinh Do's managers could not help to develop Tribeco", he said. He did not elaborate on what the problems where.

Nguyen Huu Tung, Chairman of Hoan My Medical Corporation, one of the largest private hospital groups in VietNam, said Kinh Do had expected too much when investing in Tribeco.

In 2007, aquatic breeding company Uni-President Vietnam, a branch of Taiwanese Corporation Uni-President, bought 15 percent shares of Tribeco.

As of late June this year, the company increased its stake to nearly 44 percent to become the biggest shareholder controlling the whole management board of Tribeco.

A VnExpress report quoted Mac Anh Hao, a former employee of Tribeco, as saying, "There was time when Vietnamese employees even tried to sabotage the company's operation since they could not bear the control of Taiwanese bosses."

According to some experts, Uni-President might have acquired Tribeco thinking it has enough experience to save Tribeco from suffering losses.

As the biggest shareholder, Uni-President Vietnam has given Tribeco no choice but to dissolve, so that it can easily take over the company completely, an unnamed economist told the Tuoi Tre newspaper.

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