Japanese conglomerate Mitsui & Co., Ltd. has committed $100 million to Minh Phu Seafood Corporation – Vietnam’s largest shrimp processing company – in order to help improve its shrimp exports.
Previously, in October 2018, Minh Phu released its plan to issue 75.72 million stocks worth VND757.2 billion ($32.9 million) in 2018-2019. Its charter capital was expected to reach VND2.15 trillion ($93.5 million), 1.5 times its current value.
The company also released that there were four investors from the US, Japan, and South Korea interested in its shares, however, they did not disclose the names of these companies because of confidentiality issues.
Increasing its capital by 1.5 times, along with building two refrigerated warehouses in Los Angeles and New York, Minh Phu will attempt to expand in the US.
Minh Phu is planning to build a breaded-shrimp processing plant with the annual capacity of 40,000 tonnes on the spare land of its Minh Phu Hau Giang facility.
Breaded shrimp is not subject to anti-dumping tax in the US. Therefore, the shrimp material used in this plant will be mainly imported from India, along with second-grade shrimp from Minh Phu Hau Giang and Minh Phu Ca Mau. The new plant located will help reduce shipping costs.
Currently, the company’s refrigerated warehouses in the US are overloaded, which raises costs for Minh Phu as importation is delayed by waiting for available warehouse space. Thus, Minh Phu is planning to construct a 10,000-pallet refrigerated warehouse in Los Angeles and another in New York, where its two main ports are located.
The capital invested in these two refrigerated warehouses will be sourced from the revenue of Minh Phu’s wholly-owned subsidiary in America, Mseafood Corporation, and bank loans. The loans will be paid from the annual retained earnings of Mseafood.
Minh Phu is the largest vertically-integrated Vietnamese shrimp processing company and exporter, with operations across the full aquaculture process from post-larvae rearing and shrimp farming to processing and sales and export.
In 2018, Minh Phu recorded a net profit of VND1.03 trillion ($44.78 million), up 44 per cent against the previous year.
The company forecasts higher output this year in the domestic market amid difficulties in rival markets such as India. It targets total production of 77,400 tonnes, expecting to bring in $850 million turnover for the company in 2019.
The company set the target to acquire VND2.3 trillion ($100 million) in pre-tax profit this year, VND2 trillion ($86.95 million) of which will come from export activities.
Back to Mitsui, it is not the first time Mitsui invests in Minh Phu. Previously, in October 2013, the company co-operated with Minh Phu to participate in the management of Minh Phu Hau Giang Limited Liability Company (MPHG, an affiliated company of Minh Phu). Accordingly, Mitsui will take a third-party allocation of new shares of MPHG, finally acquiring a 31 per cent ownership stake in MPHG.
(Source: http:// vietnamnews.vn/)