The International Finance Corporation has backed a five-year convertible bond issued by the Anova Corporation in Vietnam for 340 billion dong ($15 million; €14 million) to help the company build new animal-feed and storage facilities.
Anova, which imports and distributes animal feed and veterinary products including feed mixes, plans to build two mills and a warehouse over the next two years.
It could also expand production enough to export feed abroad and initiate a public offering, according to its chief executive Nguyen Hieu Liem.
Last year, the IFC proposed quasi-equity financing of up to $10 million for Anova to build the new facilities, suggesting it has increased the planned funding.
The development finance instution says the package will provide 40,000 livestock farmers across the country with quality feed, improve food safety and create hundreds of jobs.
Demand for meat in the country has risen in line with its growing population and improved living standards, but biosecurity and feed quality issues have to be tackled through a complex network of mostly smallholder farmers.
“By supporting companies like Anova Feed, we are promoting the development of efficient and sustainable local private enterprises along the agribusiness supply chain as a driver of competitiveness and improvement in agriproducts in the local market,” said IFC country manager for Vietnam, Cambodia and Laos, Kyle Kelhofer.
“IFC’s financing will help Anova Feed triple its production capacity, providing quality and reliable feed to the fast growing animal protein sector in Vietnam,” said Nguyen. “We are also seeking IFC’s advice in expanding our reach to other countries and strengthening corporate governance standards in preparation for a listing.”
Anova plans to adopt IFC Performance Standards and the World Bank Group environment, health and safety guidelines.
Vietnam’s agricultural sector accounts for more than 20 percent of the country’s GDP. Anova plans to become one of the first traceable, vertically-integrated food suppliers in Vietnam, according to its website. Its subsidiaries include Anova Biotech, Anova Feed and Anova Farm, a livestock farming and production business it established last year.