Two to invest $30 million in An Cuong Wood Working Joint Stock Company.
VinaCapital’s Vietnam Opportunity Fund (VOF) and DEG, a subsidiary of Germany’s KfW Group, have announced a $30 million investment in the An Cuong Wood Working Joint Stock Company, one of Vietnam’s leading wood-working and decorative materials companies.
VOF will contribute 70 per cent of the investment capital and DEG 30 per cent with two phases involved. Disbursement of $18 million in the first phase will be implemented immediately, with disbursement in the second phase to be made according to the business plans of An Cuong.
An Cuong has committed to revenue growth and to meeting European and especially German environmental standards.
“We are delighted to welcome VinaCapital and DEG as strategic shareholders,” said Mr. Le Duc Nghia, CEO of An Cuong. “One of the reasons we have entered into this transaction is because these two organizations bring not only capital but also expertise and a track record of working with investees.”
Mr. Don Lam, CEO of VinaCapital, said that An Cuong has been on its radar for some time. “We are pleased to be partnering with DEG to help An Cuong further build on its leading position in the industry and enter a new phase of growth,” he said.
VinaCapital is a leading investment and asset management firm headquartered in Vietnam, with a diversified portfolio of $1.4 billion in assets under management.
DEG finances investments in private companies in developing and transitional countries. It promotes private business structures to contribute to sustainable economic growth and improved living conditions. DEG’s current portfolio in Asia amounts to $2.9 billion.
The An Cuong Wood Working Joint Stock Company has been a leading player in wood-working and decorative materials in Vietnam since 1994 with a range of well-known brands from the US, Germany, Italy, Spain and Australia in wood and plastic-based panels widely used in the interior decoration of houses, apartment buildings, schools, supermarkets, and offices.
According to a report from the Vietnam Timber and Forest Product Association (Viforest) in coordination with Forest Trends Organizations, Vietnam imported 4.79 million cubic meters of timber worth $1.66 billion in 2015, to cater to the wood processing industry.
The importation of raw wood plays an important role in Vietnam’s wood processing industry meeting growing demand in domestic and foreign markets.
In 2015, wood and wood product exports earned $6.9 billion in revenue, an increase of 10.71 per cent year-on-year, according to Vietnam Customs. Exports of wood and wood products are expected to earn $7.2 billion to $7.3 billion this year, for growth of 8 to 10 per cent.
Vietnam’s wood and wooden products are found in 37 countries around the world. The US was the largest export market in 2015, with turnover $2.6 billion, followed by Japan with $1 billion and China $982.6 million.
- KfW Group
- Don Lam
- An Cuong