Minh Phu Corp reveals ambitious plans upon return to stock exchange
Minh Phu Corp reveals ambitious plans upon return to stock exchange
Leading seafood firm Minh Phu Corporation has plotted out grand strategies to defend the “King of Shrimp” title, following its comeback to the public market this month.
A hi-tech shrimp firm
Minh Phu revealed that it will use technology to gain the upper hand in the shrimp market. The firm recently met with top experts in artificial intelligence in Singapore, as it looks to raise the level of automation to 70 per cent of the manufacturing process.
According to CEO Le Van Quang, with the help of automation, Minh Phu’s annual capacity can reach 150 tonnes per hectare, compared to the current 10 tonnes. The seafood firm has spent the last two years preparing the necessary database and infrastructure for this step.
The corporation is also planning to invest in a 10,000-hectare shrimp farm in Kien Giang province, which will make use of state-of-the-art technology. With expectations of higher output levels, Minh Phu looks to ramp up its export turnover to $1 billion a year.
In 2017, Minh Phu accounted for 20 per cent of Vietnam’s total volume of shrimp exports, equalling $700 million. This is the highest figure for any seafood company in Vietnam.
Minh Phu’s major markets for exports include the US, Japan, and Australia. In the US, the firm is not subject to anti-dumping regulations, which is a huge advantage over its competitors.
For 2018, Minh Phu looks to increase its export turnover to $1 billion, reaping pre-tax profits of VND1.3 trillion ($56.8 million). The anticipated export volume is 70,000 tonnes of finished products.
Minh Phu's founder and CEO Le Van Quang is known in Vietnam as the "King of Shrimp" thanks to his long-term success in the business. With these new projects in mind, the CEO looks poised to defend his title, the same time as the firm makes its return to the stock exchange.
The money question
However, the big question remains: where can Minh Phu get the funding for all of these ambitious projects? Short-term loans at the firm already stand at VND3.4 trillion ($148.5 million)—four times the charter capital.
Minh Phu also had to borrow another VND700 billion ($30.8 million) to expand its Minh Phu Ca Mau factory, where construction is slated to start in the third quarter of 2018.
CEO Le Van Quang said he is looking forward to a government loan programme for high-tech shrimp farming, which can provide up to VND10 trillion ($437 million) for seafood companies. The loan package aims to help seafood firms like Minh Phu gain control of shrimp farms in the Mekong Delta.
Another source of money for Minh Phu is raising its charter capital upon returning to the Ho Chi Minh Stock Exchange. The firm will also pay no dividends this year. Not stopping there, Minh Phu will also issue 60 million shares in a private placement this June, aiming to collect VND600 billion ($26.2 million) for the business.
The seafood firm expects its charter capital after these issuances to reach VND2 trillion ($88 million), thus providing sufficient funding for its expansion projects.
“A lot of foreign investors have expressed interest in becoming our strategic partners. This is testament to their belief in our growth potential,” said Quang.
