Wheat field in Lao Cai. Vinafood 1 Flour mill company will sell a 34 per cent stake on the Ha Noi Stock Exchange on October 28. — Photo www.danviet.vn

HA NOI (Biz Hub) — Vinafood 1 Flour One Member Company Limited, a member of State-owned Vietnam Northern Food Corporation (Vinafood 1), will auction over 8.2 million shares, equivalent to a 34 per cent stake.

The auction on the Ha Noi Stock Exchange will take place on October 28 and the starting price is set at VND10,000 (US$0.45) per share. The deadline for participation in the event is October 26.

Foreign investors are allowed to buy all the shares put up for sale.

The precursor of Vinafood 1 Flour One Member Company Limited was Hung Quang Flour Production, a unit of Nghe An Food Company. In 2008, the flour mill company was established under the management of Vinafood 1.

The company produces and processes food, flour and related products and trades food materials and cattle feed. It has two flour production factories - Hung Quang Flour Factory in Vinh City, central Nghe An Province, and Bao Phuoc Flour Factory at the Dinh Vu Industrial Park in northern Hai Phong City.

The flourmill firm expects its charter capital to reach VND242 billion (nearly $11 million) after equitisation, of which the state will hold 65 per cent of capital, employees will hold 0.99 per cent and other investors 34 per cent.

Due to fierce competition in the local wheat market and volatile prices of input materials, business results of the company declined during the 2013-15 period.

Its net profit decreased from VND6 billion in 2013 to just nearly VND143 million in 2014. It even incurred losses of VND2.6 billion in 2015.

The company's performance improved in the first half of this year with total revenue of VND252.4 billion and net profit of VND894 million. Until the end of June 2016, its total assets value was VND316 billion.

It expects to earn over VND1 billion in net profits for the whole of 2016 and nearly VND6.8 billion in 2017. The company targets paying 2 per cent dividend from next year, with the rate increasing to 2.2 per cent in 2018 and 2.4 per cent in 2019. — VNS