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Home / Investment / News
VOF acquires poultry firm Ba Huan's stakes
Ngoc Thuy 21:14, 2018/02/27
VinaCapital`s flagship fund Vietnam Opportunity Fund (VOF) has invested US$32.5 million to acquire a significant minority stake in Ba Huan, the country`s leading pasteurized eggs and poultry meat producer.
In its latest announcement, VOF said it may also invest a moderate amount of additional capital during the next twelve months as the company delivers on mutually agreed milestones. 
 
Production line at poultry firm Ba Huan.
Production line at poultry firm Ba Huan.
"This private equity investment is consistent with our strategy of focusing on companies operating in the sectors of the economy benefitting from strong domestic growth," said Andy Ho, Managing Director of VOF. 

Vietnamese food and beverage companies, in particular, have tremendous growth opportunities ahead of them as consumers spend more on high-quality, healthy products. Ho stressed that Ba Huan is well-positioned to capitalize on these trends. 

"Ba Huan has become one of the strongest fresh food brands in Vietnam. Food safety is a concern in the country, and Ba Huan's growth is due to its reputation for producing high-quality and safe foods," Ho added.

Established in 2001, Ba Huan accounts for 30% of Vietnam's pasteurized egg market share and is said to be a household brand. The company has made significant investments in its operations, importing modern production lines from Europe and adhering to international standards. In 2018, it expects revenue to surpass US$90 million. 

Founded in 2003, VinaCapital is a leading investment and asset management firm headquartered in Vietnam, with a diversified portfolio of US$1.8 billion in assets under management. 

Ba Huan operates two fully enclosed industrial poultry farms, including a layer farm with over 1.5 million chickens for commercial egg production, and a broiler farm with over 400,000 chickens for meat production. 

Each day, Ba Huan supplies over 1.7 million eggs, delivers over 15,000 chickens, and processes over 25 tons of fresh poultry meat. Its products are distributed to over 2,000 agents and points of sales throughout Vietnam. 

Egg consumption is on the rise in Vietnam, with both chicken and duck eggs popular, according to Poultry World. Chicken consumption is also increasing, growing at a compound annual growth rate of 8.6%, according to DBS Bank, and local producers have struggled to meet demand. 

By 2021, average chicken consumption is forecast to expand to nearly 17kg per year, from around 8kg in 2015, driven by urbanization and a growing middle class with greater disposable income. Additionally, poultry production continues to be dominated by small family farms, with limited resources to scale up.

VOF recently invested approximately US$45 million into two subsidiaries of PetroVietnam - PV Power and Binh Son Refining and Petrochemical (BSR) - as part of their initial public offering (IPOs) conducted in January. 
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