After successfully issuing bonds, up to 900 billion VND, to the International Finance Corporation (IFC), BAF Vietnam Agricultural Joint Stock Company (HOSE: BAF, the Company) continues to raise a 500 billion VND syndicated loan from South Korean Banks and Taiwanese Banks.
On August 15th, 2023, the signing ceremony for the Green Syndicated Loan Facility Agreement of the Giai Xuan High-Tech Farm took place at the Vinpearl Landmark 81. BAF officially signed to receive a syndicated loan facility of 500 billion VND with a consortium of three major financial institutions from South Korea and Taiwan, including Shinhan Bank Vietnam Ltd. (Shinhan Vietnam), Daegu Bank, and First Commercial Bank. Shinhan Vietnam is the Lead Bank (the coordinating and managing bank for the syndicated loan facility).
Shinhan Vietnam is a Shinhan Bank Korea subsidiary – a Shinhan Financial Group member. Shinhan Bank Korea is currently present in 20 countries with a network of 169 branches.
After more than 30 years of establishment and development, Shinhan Vietnam has expanded its network to 49 branches and offices nationwide. In 2023, Shinhan Bank Vietnam was awarded the Best Foreign Retail Bank in Vietnam by the Global Business Review Magazine; The Best Foreign Bank in Digital Transformation in Vietnam by the International Business Magazine; The Best Foreign Bank in Vietnam granted by World Economic Magazine; and The Fastest Growing Enterprise Bank in Vietnam by Global Banking & Finance Magazine.
After comprehensive due diligence, assessment, and completion of relevant procedures, BAF has met the stringent criteria of all three financial institutions. This demonstrates a level of prestige and financial stability of BAF during the period of farm-scale growth and retail chain expansion over the past period.
The 500 billion VND loan facility will facilitate and fund the construction of the modern swine farming cluster to comply with the 3F Model (FEED-FARM-FOOD) in Giai Xuan, Nghe An province. The Giai Xuan cluster covers an area of about 52 hectares, with a capacity of 5,000 breeding sows and 60,000 livestock pigs. The swine farm is expected to have modern technology, automation, and equipment imported from Europe, with a water recirculation rate of up to 95%. This is BAF’s modern integrated farming cluster, comprising breeding and fattening pigs, inherent to reducing logistics expenditures and facilitating effortless source traceability.
The facility has a term of 7 years with a 2-year principal grace period. The collateral is the Giai Xuan Farming Cluster – a future asset. The floating rate is expected to be under 9% per annum, which is considered a fairly favorable long-term cost of funds, given the prevailing high-interest rate conditions.
In the volatile macroeconomics (respectively, the high inflation, economic recession in major countries, and political conflicts), BAF has successfully raised nearly 500 billion VND from three leading South Korean and Taiwan financial institutions. This indicated the confidence of these financial organizations in the stable business and the decent credit profile of the Company.
In the past six months, BAF has drawn attraction from several leading financial institutions in the region, as it has successfully raised nearly 1,400 billion VND from major international financial entities, including IFC, Shinhan Bank, Daegu Bank, and First Bank.
Strengthen monitoring, and optimize business efficiency.
Since 2020, BAF has consistently applied the seamless livestock value chain approach, following the 3F framework (FEED-FARM-FOOD) and has recorded rapid expansion in scale. Regarding FEED, the company has put into operation 3 Feed factories meeting FSSC22000 and GLOBAL GAP standards. These 3 Feed manufactories have a total capacity of up to 460,000 tons per year, producing vegetarian bran – sourced 100% from plants, without lean deposition substance. In the FARM sector, the number of modern farms has increased by threefold to 23 farms concentrated in Vinh Phuc, Thanh Hoa, Dak Lak, Phu Yen, Binh Phuoc, Binh Thuan, Ba Ria, Binh Duong, and Tay Ninh.
In the FOOD sector, the distribution chain has expanded to over 60 Sibafoods and more than 400 MeatShop locations countrywide.
After scaling up, the company has taken measures to review and adjust its business model for sustainable development in the next phase. BAF has been approaching circular agriculture by investing in processing waste and carcasses from swine farms into organic compost, serving rice production and other industrial crops. By implementing effective Circular Green Economy practices, BAF directly reduces greenhouse gas emissions, conserves water resources, and promotes sustainable environmental protection. In addition, there is an emphasis on strengthening control activities, cost-saving measures, and optimizing processes in line with the strategy to become one of Vietnam’s top 3 leading livestock companies.
The total BAF herd has reached over 230,000 pigs, corresponding to commercial livestock of about 570,000 which is projected to be available to the market from Q3 2023 onwards. Mr. Truong Sy Ba, Chairman of the Company’s Board of Directors, stated that the estimated total sow herd would reach 84,000, delivering 890,000 pigs by the end of 2024. By 2025, the projected output of BAF would be 2,100,000 pigs, moving towards the goal of 200,000 sows and 6,000,000 pigs to the market by 2030.