PHI Group acquires majority stake in Vietnam turmeric producer

Under the agreement, PHI and HMC will grow premium organic turmeric in Vietnam and establish an organic turmeric farming operation on a 408-acre property in Florida.

PHI Group, a publicly-traded holding company backed by private equity firm Milost Global, has agreed to exchange a combination of cash and stock for a 51 percent stake in Hong Minh Chau Hung Yen (HMC), a Vietnamese company that cultivates and processes turmeric, the company announced in late January.

HMC grows turmeric and operates a processing facility in the northern Hung Yen Province. Under the agreement, Las Vegas-based PHI and HMC will grow premium organic turmeric in Vietnam and establish an organic turmeric farming operation on a 408-acre property in Florida managed by agricultural-focused PHI subsidiary, Abundant Farms.

The property will also initially focus on growing bitter melon and PHI plans to expand into other medical crops including ming aralia (polyscias fruticosa), xao tam phan (paramignya trimera) and drumstick tree (moringa oleifera), with large export markets, especially China, in mind.

PHI chief executive officer Henry Fahman told Agri Investor that both operations will utilize a proprietary process using nutrients derived from sea water and bacteria to restore soil and improve crop yields. The firm purchased the intellectual property behind the process from Van M. Pham, an FAO-trained former official with Vietnam’s Ministry of Agriculture, earlier this year.

Over the long-term, Abundant Farms also plans to raise organic poultry and other livestock for US markets, with hopes to license a farming model using the proprietary nutrients, Fahman said.

In September, PHI secured a $100 million commitment from Milost Global, a New York-headquartered private equity firm with more than $25 billion in committed capital specializing in the provision of capital to public companies across a variety of sectors.

The transaction was structured as a $50 million equity investment, with an additional $50 million being provided as loans.

Turmeric is derived from a plant native to South Asia and used to provide an orange color to food, in cosmetics as well as an antiseptic for skin abrasions and cuts. India is a major producer and consumer of the plant, which is thought to have a variety of other medicinal uses and is also grown in the Caribbean and part of Latin America, according to UN’s Food and Agriculture Organization.