International Finance Corporation (IFC), the capital lending arm of the World Bank Group, has recently proposed an investment of VND 230 billion (about US$10.2 million) in agribusiness PAN Farm.
It is said that the IFC equity investment accounts for an approximate 10.4 percent stake in PAN Farm, and will help the farming company expand its existing seed businesses and new seed export of quality flower, fruit, and vegetable operations.
Previously, IFC has also funded the parent firm – The Pan Group – in a US$6.5 million deal in 2015. This latest round is part of the group’s US$28 million fund raised.
IFC also noted that this is its second investment to support the group, for it is committed to the company as a long-term partner, as will as the Vietnamese agriculture sector.
PAN Farm is a newly formed subsidiary of The PAN Group, created from the synergy of the National Seed Corporation (Vinaseed) which it has acquired back in 2014. This acquisition was made together with the greenhouse plantation firm PAN-SALADBOWL.
Vinaseed is currently developing seeds suitable for the local weather conditions to improve yields and combat climate change impacts such as drought and saline intrusion in the Mekong Delta and south central coastal regions.
The company currently owns 19 percent of the rice seed market and 60 percent of the white maize market share. Revenue from the licensed seed accounts for about 49 percent of the company’s combined revenue in 2016 and is expected to grow to 82 percent by 2020.
PAN-SALADBOWL, on the other hand, produces flowers for exportation to Japan. Following the deal, IFC’s investment will support the new subsidiary to enter the high quality fruit and vegetable sector in market utilizing the expertise of Japanese partners in greenhouse cultivation.
“Our priority is to support Vietnamese agriculture sector by helping build productive, efficient, and climate-resilient crops. With IFC’s support, PAN Farm’s food safety and environmental and social standards will match international best practices and boost local industry standards, ” IFC country manager for Vietnam, Cambodia and Laos, Kyle Kelhofer.
Additionally, IFC will also support the business of a future joint venture.
In recent years, IFC has strongly promoted investment in agriculture. In the fiscal year end of June 2016, IFC’s total new investment across the agricultural supply chain reached US$3.4 billion.
By Vivian Foo, VCNewsNetwork