As demand for meat in Vietnam climbs along with the country’s standard of living, demand for feed from the livestock industry has been growing with it. In support of this, the International Finance Corp. (IFC) announced it is investing VND 340 billion (US$15 million) in Anova Feed Joint Stock Company, a subsidiary of Vietnam’s Anova Corporation, to fund the building of animal feed facilities.
IFC’s investment will fund the construction of two feed mills in Dong Nai and Hung Yen provinces, and a warehouse in Long An province within the next two years with the goal of serving almost 40,000 of the country’s farmers. It will also help to better position the company as it seeks to expand outside of Vietnam and to prepare for a possible listing.
“IFC’s financing will help Anova Feed triple its production capacity, providing quality and reliable feed to the fast growing animal protein sector in Vietnam,” said Nguyen Hieu Liem, Chief Executive Officer at Anova Corporation in an IFC statement. “We are also seeking IFC’s advice in expanding our reach to other countries and strengthening corporate governance standards in preparation for a listing.”
Vietnam’s growing population and improving standard of living have made it an increasingly dynamic and attractive animal protein market for global players in the sector. On May 28, Cargill officially opened its new US$8.5 million animal feed plant in the Nam Cam Industrial Zone, in Nghe An province of Vietnam. The facility will have a capacity of 66,000 tons of feed per year to supply customers safe, high-quality feed that will maximize production and result in a higher level of safety along the country’s food supply chain.
“Vietnam is one of our best performing markets in our animal nutrition business globally,” said Sarena Lin, president of Cargill’s global feed and nutrition business, about the opening. Counter to a general slowing of economies in Southeast Asia, Vietnam has seen a growing of its economy. And despite a current drought, Cargill views the market as a promising region of growth in the long term.
“By supporting companies like Anova Feed, we are promoting the development of efficient and sustainable local private enterprises along the agribusiness supply chain as a driver of competitiveness and improvement in agriproducts in the local market,” said Kyle Kelhofer, IFC country manager for Vietnam, Cambodia and Lao PDR.
IFC has notably scaled up its investments along the entire agribusiness supply chain recently, bringing its total investments in the sector from $3 billion during the fiscal year ending June 2015 to $5.2 billion. Deal Street Asia reports that the latest proposed agricultural investment the IFC is considering in Vietnam is a $4 million loan to poultry firm, Bel Ga.
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Lynda Kiernan