VinaCapital invests in Vietnamese feed player

By Jane Byrne contact

- Last updated on GMT

© GettyImages/Duncan_Andison
© GettyImages/Duncan_Andison

Related tags: Vietnam, Nova Consumer

Vietnamese agribusiness animal feed company, Nova Consumer, has received private equity backing, along with a new shareholder.

VinaCapital announced yesterday​ that its private equity arm had invested in the feed maker. The financial details of the transaction were not disclosed.

Founded in 2003, VinaCapital is one of Vietnam’s leading investment management companies, with a diversified portfolio of US$3.9bn in assets under management.

Nova Consumer also reported​ that British Virgin Islands domiciled Foremost Worldwide Ltd has become a major shareholder in the business, taking a 10.66% stake in the company. That deal was finalized on April 6.

The two investments were first reported by DealStreetAsia.

Formerly Anova Corporation, Nova Consumer was founded in 1992. The company has revenue streams from its operations in animal husbandry, feed manufacturing and the production of veterinary drugs and vaccines for farm animals.

In the animal feed segment, the company has three factories with a total capacity of 730,000 tons per year. It also runs seven pig, cattle, and chicken farms in several regions of the country.

Developmental loan

In January, we reported​ that DEG, the investment arm of German state-owned development bank KFW, had extended a US$17.5m loan to Nova Consumer.

According to DEG, Nova Consumer has “successfully established itself as a reputed local player in a heavily commoditized and cyclical market segment​” led by international producers.

There were multiple reasons behind DEG providing the long-term secured loan, among them, the strengthening of the feed company’s balance sheet and enabling Nova to finance or refinance maintenance CapEx for either its animal feed, health or farm segments, a spokesperson told FeedNavigator.

Such long-term financing is not readily available locally, it reported. The investment, added the bank, contributes to DEG´s strategy of supporting SMEs in developing countries.

The Vietnamese company employs around 1,400 employees and DEG outlined how it is aiming to create 1,000 new jobs in the next five years through future growth and business diversification. 

Nova Consumer also intends to list its shares on the Ho Chi Minh Stock Exchange in Q2 2022 after undergoing an IPO to fund an expansion of its business interests - it is looking to move into the fast moving consumer goods arena.

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