About PAN

PAN & the Strategy “From farm to table”

It took Pan Pacific 2 years to transform from a facility service company into a significant agriculture and food company by implementing a series of M&A at many best-in-class companies.

In early 2013, the Board of Directors of Pan Pacific Corporation (HOSE: PAN) made a landmark decision: Turn a facility service company into a leading company in agriculture and consumer goods.

PAN was founded in 1998 by Mr. Nguyen Duy Hung, who also founded Saigon Securities Incorporation (SSI) a year later. After 15 years, PAN became the leading company specializing in facility service; however, this was still a small business with stable profitability.

That PAN changed their direction towards a different business area is not a surprise to many people but the question was “how Pan Pacific Corporation will penetrate in this new sector?”

PAN’s asset accumulation after 2 years of transformation

With the management team with a solid background in financial sector, PAN chose the most appropriate approach: Penetration and expansion through M&A.

Mr. Nguyen Duy Hung and SSI paid attention to agriculture and food sector many years before PAN officially became a company operating in this industry. SSI had invested a large amount in many different companies in this sector.

'When PAN started pursuing the objective of becoming an agribusiness and food company, Mr. Hung returned to PAN as the Chairman of the BOD. The M&A journey and timeline have been shortened significantly when the companies had been affiliate companies of SSI before PAN purchased and increased to controlling stakes. These companies own a proven track record with established markets, and well regarded in the industry.

For over the past 2 years, PAN has raised more than 1,600 billion VND through 3 rounds of private placement. Besides a group of shareholders related to SSI, each capital raising round witnessed the participation of many international and prestigious funds such as TAEL Partners, IFC, GIC and Mutual Fund Elite.

Until now, Pan Pacific takes the control of Vinaseed and Southern Seed, 2 leading seed companies in Vietnam; Aquatex Ben Tre, a reputed exporter of high quality processed catfish and clams; Lafooco, a company in cashew manufacture and export; and Bibica – a leading confectionery company in Vietnam.

Apart from owning below 50% stake at Bibica, the ownerships at the other 3 companies are all above 60%. PAN has spent a total amount of about 2,000 billion VND to execute these deals.

“From farm to table”

The M&A deals that PAN completed are aimed to create a solid system of business platforms in agriculture and food, in order to complete the integrated value chain, from the input to output in the Farm Food Family model.

Vinaseed and Southern Seed together formed the foundation of the Agriculture while Bibica, ABT and Lafooco formed the platform for PAN Food.

With the established fundamentals, PAN has identified its specific target for the agriculture-food strategy which is: From Farm to Table, with ownership of leading companies and businesses in rice production, catfish, clams and cashews. The Management of PAN is committed to the goal to develop the existing products into safe, branded and traceable food products.

Currently, PAN is on the way to complete the final linkage of the value chain: building a distribution network of the products produced by the upstream platforms.
FMCG is an attractive but intensively competitive sector. The strength of the distribution system will play a vital role to enable PAN food products can reach the consumers’ table.

As analyzed by a securities company, with a series of M&A implemented in a short period of time, the ability to drive efficient operation will be the key concern for PAN.
Besides, not every company in the PAN system is highly profitable – for example, Lafooco has relatively low profitability and is having an accumulated loss.
Therefore, to achieve the objective that PAN will become one of the leading agriculture and food companies with the mission to “ensure food security”, Mr. Hung and PAN’s management will still have a difficult journey ahead.

Kien Khang
Tri Thuc Tre


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