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VinaCapital outlays $32.5mn on egg and poultry firm

Released at: 09:58, 28/02/2018

VinaCapital outlays $32.5mn on egg and poultry firm

Photo from bahuan.vn

VinaCapital Vietnam Opportunity Fund (VOF) picks up significant minority holding in Ba Huan JSC.

by Quang Huy

The VinaCapital Vietnam Opportunity Fund (VOF), the flagship fund of the Vietnam-focused fund management firm VinaCapital, has announced it has invested $32.5 million to acquire a significant minority stake in Ba Huan JSC, a leading producer of pasteurized eggs and poultry meat in Vietnam.

The fund said it may also invest a moderate amount of additional capital during the next 12 months as Ba Huan delivers on mutually-agreed milestones.

With more than a 30 per cent share of the pasteurized egg market, Ba Huan is a well-known name among Vietnamese consumers. The company has made significant investments in its operations, importing modern production lines from Europe and adhering to international standards.

It has also implemented a fully integrated and enclosed value chain from feed production and farming to producing fresh, safe and clean meat, eggs, and processed food, enabling it to fully control product quality across the value chain and allowing it to fully trace its products.

“This private equity investment is consistent with our strategy of focusing on companies operating in the sectors of the economy benefiting from strong domestic growth,” VOF’s Managing Director Mr. Andy Ho said. “Vietnamese food and beverage companies in particular have tremendous growth opportunities ahead of them as consumers spend more on high-quality, healthy products. Ba Huan is well-positioned to capitalize on these trends.”

According to Poultry World, egg consumption is on the rise in Vietnam, with both chicken and duck eggs being popular. The country’s chicken consumption is also increasing, growing at a compound annual growth rate (CAGR) of 8.6 per cent, according to DBS Bank, and local producers have struggled to meet demand.

By 2021, average chicken consumption is forecast to expand to nearly 17 kg per year, from around 8kg in 2015, driven by urbanization and a growing middle class with greater disposable income.

Founded in 2001, Ba Huan now operates two fully-enclosed industrial poultry farms, including a layer farm with over 1.5 million chickens for commercial egg production and a broiler farm with over 400,000 chickens for meat production. It supplies over 1.7 million eggs, delivers over 15,000 chickens, and processes over 25 tons of fresh poultry meat daily. It expects revenue to surpass $90 million in 2018.

Capitalizing on the equitization wave of State-owned enterprises in Vietnam, VOF invested a total of $45 million to acquire shares in the Binh Son Refining and Petrochemical Co. (BSR) and PetroVietnam Power Corp. (PV Power), both subsidiaries of State-owned oil giant PetroVietnam, at their respective initial public offerings in January.

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