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Loc Troi & Chinese partner create JVs

Released at: 15:57, 15/05/2017

Loc Troi & Chinese partner create JVs

Two joint ventures set up to promote Vietnam's agricultural products in China.

by Linh San

The Loc Troi Group has formed two joint ventures with Hunan Yuan’s Science and Technology Development Co. to promote Vietnamese agricultural products in China.

The two JVs, one located in Vietnam and one in China, will have total initial charter capital of $10 million.

The Vietnam-based JV will develop new methods for growing rice seeds that are expected to yield exponential productivity, serving both Vietnam and other Southeast Asian markets. The project aims to find a better response to climate change, a major challenge to harvesting significant rice crops. It will also study the development of other types of seeds, including corn and vegetables.

Meanwhile, the business in China will provide rice and other plantation products such as coffee and pepper to the country of 1.4 billion people. Loc Troi expects the presence of this JV to help curb price manipulation of Vietnamese agriculture commodities in China as well as further promote the image of exported products.

“Despite the initial unexceptional capital, the projects possess great potential for growth,” said Mr. Huynh Van Thon, Chairman of Loc Troi.

Loc Troi is the leading distributor and a manufacturer of crop protection chemicals (CPC) in Vietnam. With a nationwide distribution network of 25 branches and more than 5,000 dealers and retailers, and a team of more than 1,300 agricultural engineers (the Farmers’ Friends), the company dominates the market, with a 20 per cent market share. Distributed products are primarily sourced from Syngenta, the world’s No.1 agricultural input producer, with whom the company has had an uninterrupted long-term relationship. Loc Troi is also Vietnam’s second-largest distributor of seeds, focusing on rice and hybrid corn seeds.

Since 2010, it has aggressively expanded into the rice processing and trading business and has become the leading vertically-integrated agricultural service provider in Vietnam. The company is backed by Mekong Capital, PENM Partners, and Standard Chartered Private Equity, which purchased a stake from VinaCapital and another shareholder for $90 million in 2014. Mekong Capital is looking to exit Loc Troi after more than eight years holding shares.

Hunan Yuan’s Science and Technology Development, founded in 2007, specializes in hybrid rice seeds in China. Loc Troi, formerly An Giang Plant Protection, a State-owned enterprise, has also recently formed a partnership with the International Finance Corporation, a prominent investor in Vietnam’s farm sector.

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