Hung Vuong Corporation (HVG) and Thadi Agriculture Farming Processing and Distribution Joint Stock Company sign a strategic agreement in HCM City on January 9. — VNS Photo
Hung Vuong Corporation (HVG) and Thadi Agriculture Farming Processing and Distribution Joint Stock Company, a subsidiary of Truong Hai Auto Corporation (Thaco), signed a strategic agreement in HCM City on January 9.
Under the agreement, Thadi would buy a 35 per cent stake in HVG, which is struggling with losses and debts.
Thadi’s representatives will be vice chairman of the board of directors and chief financial officer, and it will depute technical experts and sales and financial support personnel.
It will invest VND2 trillion (US$86.3 million) to acquire a 65 per cent stake in a Thadi - HVG joint venture to raise breeding pigs in An Giang and Binh Dinh, which will breed 45,000 piglets this year, with a first batch of 15,000 in March.
Thadi will also invest in raising 1.2 million porkers a year to European Food Safety Authority (EFSA) standards to provide safe and high-quality meat products for exports and the domestic market.
Tran Ba Duong, Thaco chairman, said HVG had 15 years of experience in catfish processing and export, and had a closed supply chain from animal feed production and farming to processing and export.
It had breeding pigs bought from Denmark, and invested in hi-tech breeding farms in An Giang and Binh Dinh.
It supplied broodstock and animal feed that met EU standards.
But in recent years HVG had faced certain difficulties and sought Thaco’s involvement, Duong said.
“This agreement represents a culture of sharing and co-operation among Vietnamese businesses. I will visit and work alongside Minh to remove all bottlenecks in the production line that he has built over the years.”
He was referring to Duong Ngoc Minh, chairman of HVG, who said he had considered carefully before approaching Duong. Minh said the biggest difficulty faced by his company was financial but had developed breeding technologies and a production line.
"We have the same views about fostering the development of the agricultural sector and developing a safe product chain; so we decided to co-operate very quickly.”
With Thadi's investment his company planned to export 100,000 metric tonnes of pangasius for $200 million this year, consolidate its animal feed production at 600,000 tonnes a year and develop pig farming, he said.
HVG has a revenue target for 2020 of VND12.5 trillion ($539.5 million).
Speaking at the signing ceremony, Minister of Agriculture and Rural Development Nguyen Xuan Cuong hailed the tie-up between the two companies, saying that it would greatly contribute to the development of high -quality agriculture and exports.
With its plans to become the leading industrial conglomerate in Southeast Asia, Thaco, besides focusing on its key industry, mechanical engineering and auto, has also invested in the agricultural sector on a large scale and a closed value chain.
It has also adopted advanced production technologies and digital-based management methods to become a leading enterprise that contributed to the profile of the Viet Nam's agricultural sector.
It set up Thadi with a chartered capital of VND3.5 trillion and has so far invested a total of VND11 trillion and owns 29,600ha of land. It grows fruits on 10,000ha and has a farm that raises 90,000 cows for meat.
Duong said the total revenues of Thadi and HAGL Agrico, in which Thadi has invested since 2018, were expected to reach $1 billion this year. — VNS