One of the leading poultry meat and processed egg producers in Vietnam is to receive funding of US$32.5 million from the flagship fund of VinaCapital.
The fund — VinaCapital Vietnam Opportunity Fund (VOF) — will allow the investors to take a “significant minority stake” in Ba Huan JSC, according to the London Stock Exchange (LSE).
With a 30-percent share of the processed egg market in Vietnam, Ba Huan’s brands are widely recognized by the country’s consumers, and it has already made significant improvements in its operations so its products meet international standards of quality and food safety.
The company forecasts revenue of more than US$90 million in 2018.
According to Andy Ho, VOF managing director, the market for Ba Huan’s poultry products is growing rapidly in Vietnam, and most of the country’s production is from small-scale farmers who lack the financial resources to expand.
“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,” he said.
Vietnamese egg production has been on an upward trend over recent years. Output has risen from under 345,000 metric tons (mt) in 2011 to more than 476,000mt in 2016, according to the calculations of the statistics arm of the United Nations’ Food and Agriculture Organization, FAOstat.
A fully integrated poultry producer, Ba Huan operates two poultry farms — in the southern provinces of Binh Duong and Long An — producing 1.7 million eggs, 15,000 chickens and 25 metric tons of fresh poultry meat daily, according to Vietnam News.
VinaCapital is among the leading investment management and real estate development firms in Vietnam. According to the organization’s web site, its portfolio has grown to US$1.8 billion since its founding in 2003. VitaCapital's VOF is one of its two closed-end funds listed on the LSE.
While Vietnam’s animal feed output is expected to recover in 2018, most of the increase from the previous year is likely to come from growing demand from the country’s aquaculture sector.