VinaCapital Vietnam Opportunity Fund’s investee company Indochina Food, the holding company of NIVL Joint Stock Company, has expanded its operations to include an integrated sugar facto
VinaCapital Vietnam Opportunity Fund’s investee company Indochina Food, the holding company of NIVL Joint Stock Company, has expanded its operations to include an integrated sugar factory in Cambodia.
NIVL and its associates are the largest sugar producers in Vietnam with over 11 per cent market share.
The integrated facility, operating under the name Kamadhenu Ventures Cambodia, will consist of a 20,000 hectare sugar plantation, a 3,500 tons of cane per day sugar refinery, a 20 MV cogeneration power plant, and a 30 kilolitres per day ethanol distillery.
The facility is located near the Mekong River in Kratie Province, north-eastern Cambodia.
VinaCapital assisted the investment by introducing NIVL Sugar, a private equity holding, to the Bank for Investment and Development of Vietnam. The investment comes as part of VinaCapital’s ongoing efforts to strengthen commercial cooperation between Vietnam and Cambodia and identify potential investment opportunities in Cambodia.
A. Nandaa Kumar, NIVL managing director, says: ‘Cambodia is a good investment environment given that it has a population of more than 11 million, an active private sector, high rate of GDP growth, sizable FDI inflow, booming tourism industry, and substantial support from overseas development assistance, not to mention the potential future development of sizable oil and gas reserves.’
The total cost for the integrated sugar project is estimated at USD75m, to be financed through a mix of equity and bank loans, beginning with a loan from the Bank for Investment and Development of Vietnam.
VinaCapital chief executive Don Lam says: ‘We are very pleased to see a long-term investee company reach a new stage of development. Furthermore, this project will result in significant social and economic benefits including direct and indirect employment for 5,000 persons, power availability for 30,000 households, export revenue generation of up to USD100m, carbon credits under CDM, and the development of downstream/feeder industries.’
Global demand for sugar in 2009 is expected to exceed production by about 15 million tons. Lower production in India, higher diversion of cane to ethanol in Brazil, and lower production in the European Union and Thailand are factors in the declining supply, which has pushed 2009 sugar prices to record highs.
NIVL is one of the first Indian-owned businesses in Vietnam, commencing production of refined sugar in 1996 at its factory in Long An Province, which also produces ethanol.
VinaCapital Group is an asset management firm in Vietnam, with over USD1.6bn in assets under management as of June 2009. VinaCapital Vietnam Opportunity Fund is a closed-end fund traded on the Aim market of the London Stock Exchange. Launched in September 2003, it focuses on the key growth sectors of the domestic economy including financial services, retail, consumer goods, tourism, property, infrastructure, and technology. It makes equity and debt investments in listed, OTC-traded, and private companies, and participates in the privatisation of state-owned companies.
