Mitsui raises Minh Phu Seafood stake to 35 per cent

Monday, Jun 10, 2019 15:20

Workers on a processing line at a Minh Phu Seafood factory. The company has confirmed its shrimp products are still entering the US as normal. — Photo

MPM Investments Pte Ltd, a subsidiary of Japan’s Mitsui & Co Ltd, has acquired 60 million shares in Minh Phu Seafood Joint Stock Company (MPC) to raise its stake in the Vietnamese shrimp processor to 35.1 per cent.

The purchase was made through a private placement worth nearly VND3.04 trillion (US$130.5 million), equivalent to VND50,630 per share, a 40.6 per cent premium over MPC’s closing price on Friday.

Late last month, MPM bought 10.2 million shares, or a 7.37 per cent stake, in Minh Phu.

On its website, Mitsui wrote that Minh Phu Seafood has built a strong position by vertically integrating all stages from shrimp farming to processing and sales. The company owns two processing plants and 900 hectares of shrimp farms in southern Viet Nam.

Its products are exported to around 50 countries, notably the US and Japan, accounting for about 20 per cent of Viet Nam’s total shrimp exports.

However, shares of Minh Phu Seafood, coded MPC on the Unlisted Public Company Market (UPCoM), have plunged 15 per cent since mid-May after the company was accused of evading anti-dumping taxes in the US.

MPC declined from more than VND43,000 per share to VND36,000 ($1.55) by last Friday.

Early this month, a US congressman called on the US Customs and Border Protection (CBP) to investigate allegations that Viet Nam’s Minh Phu Seafood had possibly evaded anti-dumping duties on shrimp from India.

The Vietnamese company was alleged to have purchased large amounts of frozen Indian shrimp before “minimally processing” them in Viet Nam and selling them to the US as Vietnamese products.

In an official statement on its website on Friday, Minh Phu said it had not received any information or requests from the CBP or any relevant US government agency related to the allegation.

The company confirmed its shrimp products are still entering the US as normal.

It did not deny it had imported shrimp from India due to a shortage of raw materials in Viet Nam, though it noted that the Indian products made up just 10 per cent of its total imports of raw materials.

“We use shrimp imported from India not for the purpose of evading anti-dumping taxes applicable to shrimp products but to meet the increase in demand for processed shrimp from markets other than the United States,” it said in the statement.

It said exports to the US in the first quarter this year reduced to about 33 per cent of its total exports, a decline from more than 41 per cent in 2015.

The company also said it has diverse sources of shrimp raw and halting imports from India would not affect its production and export activities.

According to a lawyer for the company, under the 2015 Enforce and Protect Act, CBP will have 95 days to consider the allegation before initiating an investigation. Whether CBP initiates an investigation or not, the company will strictly abide to US laws and WTO regulations, the lawyer said. — VNS

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