VOF invests in Ba Huan, Vietnam's top poultry c...

26 February 2018
 

VinaCapital Vietnam Opportunity Fund Limited (“VOF”)             
LEI No.: 2138007UD8FBBVAX9469
 

VOF takes a private equity position in Ba Huan JSC, Vietnam’s largest poultry company
 

Ho Chi Minh City – VinaCapital Vietnam Opportunity Fund (LSE: VOF), the flagship fund of VinaCapital, today announced that it has invested in Ba Huan JSC, the country’s leading producer of pasteurised eggs and poultry meat. VOF has invested USD32.5 million to acquire a significant minority stake in the company. VOF may also invest a moderate amount of additional capital during the next twelve months as the Company delivers on mutually agreed milestones.

With more than 30 percent share of the pasteurised egg market, Ba Huan is a well-known name to Vietnamese consumers. The company has made significant investments in its operations, importing modern production lines from Europe and adhering to international standards. The company has implemented a fully integrated and enclosed value chain from feed production and farming, to producing fresh, safe, and clean meat, eggs, and processed foods, enabling it to fully control product quality across the value chain, and allowing it to fully trace its products. In 2018, the company expects revenue to surpass USD90 million.

Andy Ho, Managing Director of VOF, said, “Ba Huan has become one of the strongest fresh food brands in Vietnam. Food safety is a concern in the country, and Ba Huan’s growth is due to its reputation for producing high-quality and safe foods. It has a history of innovation, a management team with a clear vision for expansion, and a market that is rapidly growing. We look forward to working with Ba Huan’s management team to help implement new management practices, improve governance, and otherwise help take the company to the next stage of growth.”

According to Poultry World, egg consumption is on the rise in Vietnam, with both chicken and duck eggs popular. Chicken consumption is also increasing, growing at a CAGR of 8.6%, according to DBS Bank, and local producers have struggled to meet demand. By 2021, average chicken consumption is forecast to expand to nearly 17kg per year, from around 8kg in 2015, driven by urbanisation and a growing middle class with greater disposable income. Additionally, poultry production continues to be dominated by small family farms, with limited resources to scale up.

“This private equity investment is consistent with our strategy of focusing on companies operating in the sectors of the economy benefitting from strong domestic growth. 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 capitalise on these trends, and we are excited to work with them to realise their potential,” said Ho.

About Ba Huan

Ba Huan JSC was founded in 2001, growing from a family business to become the leading supplier of pasteurized poultry eggs in the Vietnamese market. The company 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. These farms are qualified to local and international food safety standards and practices such as Hazard Analysis Critical Control Point (HACCP) and VietGap, are well-organised to ensure proper distance between sub-farms, and equipped with semi-automated systems for feeding, watering, ventilation, and heating. Each day, Ba Huan supplies over 1.7 million eggs, delivers over 15,000 chickens, and processes over 25 tons of fresh poultry meat.

Ba Huan’s products are distributed to both the general trade and modern trade channels such as major grocery chains, and major international fast food businesses via a comprehensive distribution network of more than 2,000 agents and points of sales throughout Vietnam.
 

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About VinaCapital

Founded in 2003, VinaCapital is a leading investment and asset management firm headquartered in Vietnam, with a diversified portfolio of USD1.8 billion in assets under management. The firm has two closed-ended funds that trade on the London Stock Exchange: the VinaCapital Vietnam Opportunity Fund Limited, which trades on the Main Market, and VinaLand Limited which trades on the AIM. VinaCapital also manages the Forum One - VCG Partners Vietnam Fund, one of Vietnam's largest open-ended UCITS-compliant funds, the Vietnam Equity Special Access Fund, numerous segregated accounts, and two domestic funds. VinaCapital also has joint ventures with Draper Fisher Jurvetson in venture capital, and Warburg Pincus in hospitality and lodging. VinaCapital's expertise spans a full range of asset classes including capital markets, private equity, real estate, venture capital, and fixed income.

VOF is managed by VinaCapital Fund Management Limited, an entity managed and regulated in Vietnam by the State Securities Commission of Vietnam, a member of the International Organization of Securities Commissions.

For more information about VinaCapital, please visit www.vinacapital.com .
 

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