Billionaires pour money into agriculture

Vietnamnet | Mon, Jul 11, 2016 01:45:44 PM Share this on

Vietnamese billionaires earn money from many different business sectors. However, many are investing in agriculture.

When the real estate market froze five years ago, Hoang Anh Gia Lai Group (HAGL) owned by Doan Nguyen Duc, one of the most influential businessmen in Vietnam, announced its plan to invest in an agricultural project to seek more sustainable development.

HAGL was the first big conglomerate in Vietnam that made a strong commitment to invest in the agriculture sector.

The second stock billionaire who jumped on the bandwagon was Pham Nhat Vuong, the richest Vietnames stock billionaires and dollar billionaire recognized by Forbes.

Vuong became rich from Vingroup, which was initially established as a real estate firm and later has invested in many other business fields, including retail and education.

Vingroup, which decided to pour VND2 trillion into agricultural production, now develops closed production chains which grow clean vegetables for domestic consumption and export.

Vuong, at the 2016 shareholders’ meeting said that the revenue from the real estate sector in 5-10 years, would account for less than 50 percent of the group’s total revenue, and that agriculture would be one of the business fields to maintain growth.

Meanwhile, Tran Dinh Long, president of Hoa Phat Group, the second richest stock billionaire, said he was about to churn out the first consignment of animal feed.

The big conglomerate, which plans to obtain the turnover of VND3 trillion a year in three years, has established an animal feed company in Hung Yen province which has capacity of 300,000 tons a year.

Taking a shortcut

While HAGL, Vingroup and Hoa Phat decided to develop agriculture projects from the very beginning, others have jumped into the field through merger and acquisition (M&A) deals.

Analysts commented that Massan and Pan Pacific show their intention to expand their business in agriculture.

In the last three years, Masan has been involved in M&As in a plan to create a closed 3F chain. After the M&A, Masan now holds 15 percent of the animal feed market share.

Meanwhile, Pan Pacific now holds 57 percent of stakes in Ben Tre Seafood Import/Export, more than 22 percent of stakes in Agifish and 24 percent in Lafooco.

Hung Vuong Seafood Company, in an effort to create a ‘seafood empire’, has bought a series of companies in the same industries. In 2015, Hung Vuong announced a project with the total investment capital of VND2 trillion spent on building two animal feed factories, a system of pig farms and a veterinary medicine factory.

Source: Vietnamnet