May 17, 2019

Japanese global conglomerate Mitsui & Co. has reached an agreement to acquire 35.1 percent in Vietnam-based Minh Phu, the largest shrimp integrator in the world, for $150 million.

Accounting for approximately 20 percent of Vietnam’s shrimp exports, Minh Phu is a fully integrated business, operating shrimp farms and two processing plants across 900 hectares (2,224 acres) in southern Vietnam. With operations that span the entire shrimp supply chain from farming and rearing, to processing and exporting, the company’s range of shrimp and value-added products are exported to 50 overseas markets, with the bulk of its exports bound for the U.S. and Japan.

This is not the first investment by Mitsui & Co. touching Minh Phu.  In 2013 the conglomerate invested in Minh Phu Hau Giang Joint Stock Company (“MPHG”), a processing plant affiliated with Minh Phu. Over the past six years, Mitsui has contributed to optimizing both the management and operations of MPHG, and now, with this investment in its parent company, Mitsui can bring these initiatives from MPHG to the entire Minh Phu Group.

Mitsui said that the deal is aligned with it medium-term management plan to focus on agriculture and nutrition as targeted sectors for growth.

Vietnam’s shrimp exports are expected to grow to a value of more than US$4 billion this year, driven by new trade agreements, according to the Vietnam Association of Seafood Exporters and Producers (VASEP). Of this value, shrimp exports are expected to be valued at $1 billion.

After reaching 4.66 million tons in 2018, the global shrimp market is expected to reach volumes of 5.83 million tons by 2024, according to the report Shrimp Market: Global Industry Trends, Share, Size, Growth, Opportunity and Forecast 2019-2024, issued by IMARC Group.

In contrast to lobster, tuna, and crab, which are facing challenges in the market due to high prices and constrained supply, shrimp continues to see increasing demand, particularly from consumers in the U.S., while untapped markets such as the Philippines and Russia represent channels for export growth.

Amidst this landscape, the Asia Pacific region (excluding Japan) is expected to dominate the market with a share exceeding 35 percent of a global market that will reach a value of US$63.2 billion by the end of 2027, according to Future Market Insights.

As population growth and a growing global middle class prompt ever stronger demand for sustainable protein, part of Mitsui’s plan is to help Min Phu to meet these demands through the application of digital technology including the use of AI in its farming ponds and processing plants, to increase efficiency along its entire shrimp supply chain, and to improve productivity, and stability of supply from farm to market.

“Drawing on our global presence and business experience, we look forward to working with Minh Phu to expand production, enhance operations, and grow international sales. In our medium-term management plan, we have identified nutrition and agriculture as a strategic growth area for our business,” said Kenichi Hori, representative director of Mitsui. “By increasing our investment in Minh Phu and supporting its growth strategy we aim to strengthen earnings from our food business, and respond to global demand for protein.”

-Lynda Kiernan