Lombard’s PE fund has picked up a minority stake in Vietnam-based sea food processor Viet Uc Seafood, for an undisclosed amount. A company representative for Viet Uc Seafood, one of the largest shrimp seed producers in the country, confirmed the development to DEALSTREETASIA.
This investment will be used to improve the company’s production cycle and R&D (research and development) facilities. Viet Uc is planning to expand it’s production base to include both shrimp seeds and full-grown shrimps, which in turn will help cut down it’s import costs.
Currently, the company imports shrimps from Australia and Hawaii (USA). Being able to raise shrimps in-house will not only cut costs but also help the company become an integrated seafood producer, said Tuan, the representative of Viet Uc Seafood quoted earlier said.
Viet Uc Seafood, which has been in operation for 14 years, specialises in nurturing and incubating shrimp through several larval phases before the final sale. In 2013, the company exported 13 billion shrimp seeds; this volume has already increased by 35% in the first nine months of 2014.
The investment by Lombard comes at a time when Vietnam’s shrimp production industry is consolidating and is in the process of transforming from informal, family-held enterprises to a more industrialised sector.
With $ 2.5 billion worth of shrimp exports in 2013, Vietnam is world’s third largest producer of shrimp , says the Vietnam’s Ministry of Agriculture and Rural Development. The shrimp exports amount to nearly half of the seafood exports from the country.
Lombard Asia IV LP is a private equity fund by Lombard Investments, with $400 million in capital commitments and a mandate to build a portfolio of equity and equity-linked investments in middle market, growth-oriented companies formed and operated in Southeast Asia.
International Finance Corporation (IFC) has a $25 million equity investment in the fund.
According to Businessweek profile, the fund typically invests between $10 million and $50 million in an identified opportunity.
Lombard Investments is an international private equity investment manager with offices in San Francisco, Bangkok and Hong Kong, and operations in Manila, Ho Chi Minh City, Shanghai and Taipei. It has made more than 90 controlling and significant minority investments throughout Asia and North America. Lombard Asia IV is its fourth Asia fund, focused on Thailand and the region of Greater China in the South-East Asia.