Aboitiz Equity Ventures said Monday it is expanding its animal feeds business in Vietnam with the acquisition of a controlling stake in Europe Nutrition Joint Stock Company (Eurofeed).
Aboitiz Equity said in a disclosure to the stock exchange Pilmico International Pte. Ltd., a wholly-owned subsidiary, acquired 70 percent of Eurofeed for $3.7 million. “Eurofeed is a joint stock company organized under the laws of Vietnam,” said Aboitiz.
Aboitiz said the amount of the acquisition was based on the enterprise value of $5.3 million minus long-term and short term debt as reflected in the books of Eurofeed at closing date.
Aboitiz said the agreement was subject to a closing audit review, execution of a shareholders’ agreement and the delivery by the sellers of the corresponding amended investment certificates, and other corporate documents.
Aboitiz earlier said Pilmico was expanding its market in Southeast Asia.
Pilmico last year purchased 100 percent of Pilmico Viet Nam Trading Company Limited (Pilmico Vietnam Trading) for 800 million Viatnamese dong.
Pilmico Vietnam Trading is a limited liability company operating in Vietnam.
The company is engaged in the wholesale of food products, beverages, agricultural and forestry raw materials.
Pilmico Vietnam Trading will be the vehicle used for the importation and distribution of Pilmico products in the Vietnam market.
Aboitiz earlier said it planned to spend P4 billion to expand the production capacity of Pilmico from 2017 to 2020.
Pilmico president Sabin Aboitiz said during a recent analysts’ briefing the company aimed to increase the sow level capacity of hog farms to 20,000 heads by 2020 from 14,000 heads at present and raise the output of animal feeds business to 153 tons per hour from 113 TPH.
The company also intends to expand its aqua feeds capacity to 64 TPH by 2020 from 44 TPH by end-2017 and increase the production of ready-to-lay hen to 1 million heads by 2020 from 172,000 heads in 2017.
The group broke ground on several projects including the expansion of meat processing and feedmill plants and a grains storage facility in Tarlac province.
Aboitiz said the company also recently incorporated a trading office in Indonesia as a part of the thrust to expand within Southeast Asia.
“Asean way in the future is going to be big. When you look at our acquisition in Vietnam, that gave us access to 600 million population. So the opportunities are quite good. We are excited to expand that,” Aboitiz said.
Pilmico is currently expanding its customer reach in the Association of South East Asian Nations region while diversifying national operations.
Net income contribution of Pilmico dropped 25 percent in the first quarter to P292 million from P389 million a year ago.