VinaCapital, Duxton sell Vietnam agribusiness stakes to Stan Chart

Stan Chart's private equity arm has bought a minority stake in An Giang Plant Protection from VinaCapital Vietnam Opportunity Fund.

Standard Chartered Private Equity (SCPE), the bank’s balance sheet investment arm, has bought a $63 million stake in Vietnamese agribusiness, An Giang Plant Protection Joint Stock Company, a seed and pesticide producer, from VinaCapital Vietnam Opportunity Fund.

The deal represents a 23.6 percent stake in the company, according to an announcement by VinaCapital, the investment firm targeting key growth segments in the country. The internal rate of return on the investment over the five-year investment period was 23.7 percent.

It is also understood that DWS Vietnam Fund, a Deutsche Asset Management fund, sold an 11 percent stake in the agribusiness, according to Chris Freund, partner at Mekong Capital, an incumbent PE investor in An Giang. Duxton Asset Management, the fund’s manager, had not responded to requests for comment when Agri Investor went to press.

This is SCPE’s second agribusiness investment this month after it invested $35 million into Al Jazeera Agricultural Company, the fully-integrated poultry producer and distributor in Jordan on 10 September. 

As well as producing seeds and pesticides, An Giang has started aggregating and processing rice, fitting with SCPE’s preference for integrated agribusinesses.

This is not the first time Standard Chartered and An Giang have worked together; the bank provided a $70 million structured finance facility to the Vietnamese company in January this year.

SCPE will support the management’s business and development plans, according to the release.

“Standard Chartered is one of the few financial institutions that have been committed to supporting the growth of the agricultural sector in Africa, India, China and South East Asia,” said Huynh Van Thon, chairman of AGPPS in the release. “With their experience and the global scope of their operations, I believe SCPE will play a vital role in contributing to the growth of AGPPS’s operations in the rice, plant protection chemicals and seed segments, and other promising operations across the agricultural value chain in Vietnam.”

The investment is SPCE’s second ever into Vietnam and into a company Bert Kwan, head of Southeast Asia (excluding Indonesia) at SCPE, described in the release as “one of Vietnam’s flagship enterprises”.

Mekong Capital and SCPE are stakeholders in An Giang alongside PENM Partners, another Vietnam-focused PE firm, according to Freund.

VinaCapital first invested in 2009 but increased its stake several times, according to David Dropsey, manager, investor relations and communications at the firm.