'Big brother' Vietnamese chemical falls into the hands of Japanese hair industry tycoon
Faced with the prospect of unpredictable competition, a rare "big brother" of the Vietnamese hair cosmetics industry agreed to merge with a Japanese corporation.
“The business path is good but we don’t have the resources. To call for bank capital, we have to mortgage assets. We can’t access preferential capital sources and have to use our own capital. Vietnam has just signed the new TPP. The competitive pressure is huge. We realize that we can’t compete. If we keep it, one day we will lose the company,” said Nguyen Van Ngu - Founder of Ngu A Chau, making the hall “silent” when he shared the reason for selling the company, which is more than ten years old, at the merger announcement with Takara Belmont Group (Japan).
Asian Language is a relatively unfamiliar name to most consumers because they only know the company's product name. Established in 2006, to date, this is a leading and rare hair cosmetics brand in Vietnam.
The company's chemicals for curling, dyeing, shampoos, conditioners and styling waxes account for 10% of the market share in Vietnam with more than 200 general agents and presence in 10,000 hair salons.This is also the first company in Vietnam to achieve international GMP standards for the production of hair cosmetics in 2011. Therefore, the company's products are eligible for export.
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The founder of Ngu A Chau said he accepted the merger with Takara Belmont and left the CEO position because he wanted to see his brand survive longer, thanks to strong capital from Japan.Photo: Telecommunications |
However, faced with the need for capital to expand production scale that was beyond the founder's capacity and the pressure of competitive prospects, Ngu A Chau agreed to let Takara Belmont buy back 97% of shares, equivalent to about 900 million yen (equivalent to 181.2 billion VND).
Along with that, Mr. Nguyen Van Ngu left the CEO position and will not play any role after the merger, except as an advisor when necessary.
“During the negotiation process, the Japanese side agreed to keep the company name and product brand. We checked a deal where Takara Belmont bought a company in the US. And until now, after more than 50 years, they still keep the same company name and brand. Only the product is better,” Mr. Ngu shared the reason why he nodded in agreement.
Takara Belmont is a Japanese corporation specializing in specialized hair cosmetics with nearly 100 years of history. Other business areas of the corporation include the production of specialized equipment for dental clinics, interior design and construction for men's barbershops, women's hair salons, skin and nail care salons. In 2013, the corporation inaugurated a dental equipment factory in Dong Nai.
Mr. Hidetaka Yoshikawa - President and CEO of Takara Belmont called the merger a "very good match". With the appointment of new leadership for Ngu A Chau, he said the group plans to apply Japanese technology to enhance quality, promoting the company's existing brand to become the number one hairdressing chemical brand not only in Vietnam but also in the Southeast Asia region.
As for Mr. Nguyen Van Ngu, he said he was somewhat reassured that the brand he created would have a chance to last longer. He declared that he would not open any more hair cosmetics companies but would instead focus on vocational training.
“I am very passionate about hairdressing. I myself started out as a hairdresser. Everyone has a passion for business. I am no exception. But business is also related to financial resources. Meanwhile, financial resources are the weakest point of small and micro enterprises in Vietnam,” he said.
