Vietnam: IFC to invest $10m in livestock platform Anova Corp
The International Finance Corporation (IFC) is likely to invest $10 million in quasi-equity investment in Vietnamese veterinary medicine business Anova Corp, according to a disclosure filed by IFC.
Anova is rolling out a $58.6-million project that will include construction of a bulk warehouse in Long An in the south of Vietnam, two feed mills in northern province of Hung Yen and southern province of Dong Nai, and will need incremental working capital requirements.
The IFC is proposing to finance this project with as much as $10 million, while the remaining funding will come from other lenders, existing shareholders and internally generated cash.
Launched in 1992, Anova Corp is one of the leading veterinary medicine company in Vietnam. The company specializes in importing, manufacturing, and distributing animal health products and raw materials for the veterinary industry.
Its subsidiary Anova Feed JSC was established in 2012 to expand the company’s reach in the fast growing livestock and animal protein sector in Vietnam. The warehouse and feed mills will be developed by Anova Feed.
“The project fits well with the industrialisation of Vietnam’s livestock industry, which is changing from small backyard farm operations to larger commercialised farms requiring more technical products and a higher quality of technical assistance from the industry,” the IFC said in its filing.
Specifically, the project will help Anova develop in the feed industry which has been dominated by large foreign companies, while creating jobs, especially higher skill job opportunities for young graduates and additional indirect jobs for distributors.
The IFC not only expects to hand on its global experiences and client network to Anova but also promises a long-term partnership to assist the Vietnamese firm in integrating in the local livestock supply chain. Notably, as Anova plans an IPO within the next few years, the “IFC investment would provide additional comfort to future investors.”
Anova Corp is 88.8 per cent owned by its chairman Bui Thanh Nhon and his family.
Singapore’s Duxton Asset Management started investment in the company in 2011 and currently holds a 6.8 per cent stake. The remaining 4.4 per cent are held by around 90 individuals, mainly current or former employees and key stakeholders of the company.
A subsidiary of real estate-focused firm Nova Group, Anova, in August, announced a tie up with Irish food company Kerry Group to produce milk powder, and an investment of over $50 million in quality control.
Prior to the proposed investment for Anova, the IFC had invested $6.5 million for around five per cent in one of Vietnamese food majors, Pan Pacific – which is now known as the Pan Group – to support the group’s expansion in the agricultural and food sector.