The investment fund behind Pharmacity, F88, Vua Nem, Pizza 4P’s… expanded its investment portfolio to agriculture because it believes the profit potential is huge.
Mekong Enterprise Fund IV (MEF IV) of Mekong Capital has just signed an investment agreement worth 5 million USD with Husk – a coal and biofertilizer producer in Southeast Asia. This is this fund’s first investment in the agricultural sector and is also the return disbursement after two years of not adding to the portfolio.
Ellen Van – Head of the Investment Advisory Team at Mekong Capital and the person in charge of the investment in Husk – shared that when expanding her investment portfolio into agriculture, at first she still thought this was an unattractive field. The Fund raises many questions about opportunities and potential for this segment.
However, Mekong Capital’s leadership team recognizes that Vietnam is an agricultural country with 40% of land serving farming and more than 70% of the population participating directly or indirectly. Therefore, the fund still believes that there is a great opportunity to generate expected financial returns for investors from the agricultural sector, while also bringing a positive impact to society.
Mr. Chad Ovel – General Director of Mekong Capital, spoke at the investment agreement signing ceremony. Image: Mekong Capital
Speaking more about this, Mr. Chad Ovel – General Director of Mekong Capital, commented that Vietnam has many agricultural products that are exported as raw materials without gaining added value. This brings little profit to farmers and leads to missed opportunities for growth and economic development of the country.
“With our experience and capacity, we will turn Husk into a typical case for an agricultural investment deal that has both social impact and good financial returns,” said Mekong Capital’s leader. .
Husk focuses on producing biochar, organic carbon-containing fertilizers and crop protection products. This startup’s business model is considered easy to replicate by Mekong Capital. They will support this business to consolidate operations in Cambodia, expand scale, invest in equipment, facilities and develop products in Vietnam.
Husk has the technology to turn rice husks into biochar and fertilizer containing organic carbon. Image: Mekong Capital
Ms. Heloise Buckland – CEO and co-founder of Husk, also said that their business model does not require much marketing costs when customer trust is often built through word of mouth strategies. When farmers see positive results in their neighbors’ fields, they tend to follow suit. Therefore, Husk chose to operate sample farms near distributors, serving as a marketing tool to attract new customers.
In fact, since starting business in 2019, Husk’s sales have doubled every year and are estimated to continue to maintain this pace to this day. They are focusing on improving profit margins to increase business efficiency.
Previously, this startup only operated in Cambodia. They believe that when expanding into the Vietnamese market, business results will grow strongly because the market is much larger than Cambodia.
According to the plan, the company will trade products for rice cultivation in the Mekong Delta, coffee and vegetables in the midland and mountainous regions. In addition, the Ministry of Agriculture and Rural Development aims to increase the proportion of registered organic products to 25% by 2025. Husk’s leadership believes that there are many opportunities for them to participate in the field. This.
Mekong Capital has been operating for 23 years, is well known for its investments in Mobile World, Golden Gate, Traphaco, PNJ or Masan and has divested. Currently, the company is pouring money into Pharmacity, F88, Vua Nem, Pizza 4P’s… Mr. Chad Ovel said that he is evaluating some more investments in Vietnam and expects to complete this year.