Thaco sets foot in agriculture
Thaco sets foot in agriculture
Spending approximately VND2.2 trillion ($97.3 million) buying convertible bonds from Hoang Anh Gia Lai Agricultural JSC (HAGL Agrico) will help Truong Hai Auto Corporation (Thaco) set a solid foothold in the agricultural sector.
According to information published by HAGL Agrico, the company issued a decision to sell 221,688 convertible bonds worth VND10 million ($428) each to Thaco for VND2.2 trillion ($97.3 million).
With the ratio of 1:1,000, Thaco can convert these bonds into 221.688 million shares after one year.
HAGL Agrico will use VND1.137 trillion ($50.3 million) of the capital acquired to invest in growing banana and chili, and the remaining VND1.08 trillion ($47.78 million) to restructure its operations.
Thaco teamed up with Loc Troi Group to develop the “Industrialisation of agriculture and operation of enclosed chain of manufacturing, harvesting, processing, transporting, and distributing."
The total investment is about VND7.8 trillion ($345.1 million) and will include developing agriculture (about 310 hectares), construction of ports and specialised transportation system by waterway and the construction of a farm system (large sample field) on about 340 ha in the first phase.
In January 2017, Thaco held a signing ceremony to cooperate in producing and distributing agricultural machinery with LS Mtron Company, the largest agricultural machinery manufacturer in South Korea with 40 per cent of the market share.
The factory, located in the Chu Lai-Truong Hai Automobile Mechanical Complex at Chu Lai-Truong Hai Open Economic Zone in Quang Nam province, has a total investment capital of VND500 billion ($22.1 million) and will manufacture 18-120HP agricultural tractors and harvesters, and has a designed capacity of 2,000 tractors a year in the first phase, 3,000 cultivators, and 1,000 combine harvesters.
According to the agreement, LS Mtron has been transferring tractor manufacturing technology and training Thaco’s engineers to localise tractor component production to reach a regional value content (RVC) of 50 per cent.
Machinery and equipment will be produced by Thaco with advice from LS Mtron and some test equipment imported from South Korea that cannot be produced in Vietnam, such as speed test equipment, lift test equipment, and power take off (PTO) equipment.
In this February, the factory officially came into operation after one year of construction.
