Marubeni Increases Investments in Southeast Asia's Thriving Consumer Market

20 Jun, 2024

Marubeni Increases Investments in Southeast Asia's Thriving Consumer Market

Japanese trading company Marubeni is significantly increasing its investments in Southeast Asian consumer businesses. The company plans to make two or three annual investments, each exceeding 10 billion yen ($64 million), through its subsidiaries established in Singapore in 2021 and the U.S. in 2022. These subsidiaries aim for substantial minority stakes and complete buyouts. Marubeni Growth Capital (MGC) Asia, the Singapore-based unit, focuses on Southeast Asian consumer businesses and has already invested in Vietnamese food ingredient maker AIG Asia Ingredients and Indonesian medical supplies manufacturer Oneject. It also introduced Tim Hortons franchises in Singapore, Malaysia, and Indonesia.

Marubeni's U.S. unit, MGC U.S., invests in U.S. companies with trends that could potentially spread to Southeast Asia. This strategy helps Marubeni stay ahead of emerging trends. For example, it recently invested in R.G. Barry, an American company known for its household goods, which recently launched Planet A, focusing on biodegradable plastic footwear.

Marubeni's investment strategy aims to improve its price-earnings (P/E) ratio, which is currently the lowest among the five big Japanese trading houses included in Berkshire Hathaway's portfolio. The Next Generation Corporate Development division, created in 2022, is driving these efforts by targeting industries with higher P/E ratios than Marubeni’s existing businesses. The division aims to accumulate around 300 billion yen in noncurrent assets by 2030.

Investments like AIG, which aims to double its revenue by 2030, and Oneject, which aspires to become a local leader in medical supplies, illustrate the growth potential Marubeni seeks. Additionally, Marubeni’s investments in Southeast Asia cover diverse sectors, including instant noodles, fintech, and industrial parks. The company prioritizes strong growth prospects while seeking synergies with its existing Japanese partners.