Hanoi, Vietnam, June 16, 2023—To help improve access to safe and quality food products while creating more jobs and enhancing competitiveness, IFC is making two new investments in Vietnam's retail and agribusiness sectors, aimed at strengthening the agribusiness value chain and ensuring food security in the country.
IFC's quasi-equity investment of VND460 billion (around $20 million) in CVS Joint Stock Company, a subsidiary of Son Kim Retail Corporation (SonKim Retail), will help expand the retail network of GS25 Vietnam, a leading convenience store operator in the country.
In addition, the partnership between IFC and Sumitomo Mitsui Banking Corporation (SMBC), a leading Japanese bank, will help arrange a $40 million commodity-backed warehouse finance facility for Thanh Thanh Cong - Bien Hoa Joint Stock Company (TTC AgriS), a major local agricultural enterprise.
Increasing access to modern retail, the funding will help GS25 Vietnam— a joint venture between Vietnam's SonKim Retail and Korean firm GS Retail—open over 500 new convenience stores nationwide by 2025. The network expansion is expected to create up to 6,000 direct jobs (more than 60 percent for women) and generate thousands more indirect jobs, with the company increasing its supply of locally produced food.
"SonKim Retail is very excited to be joined with IFC in its mission of bringing to the people of Vietnam enhanced shopping options, which are delivered conveniently in a fair, friendly, fresh, and fun manner," said James Michael Kershek, SonKim Retail Chief Executive Officer. "We are deeply committed to championing environmental, social, and governance (ESG) best practices as demonstrated by our diverse and fast-growing workforce, safe and sustainable food offerings, and management decision-making processes. This alignment in beliefs and goals well positions SonKim Retail in Vietnam's fast-growing retail sector."
Catering to the changing taste of a growing urban clientele that is looking for safe and reliable ready-to-cook meals, the Ho Chi Minh City-based convenience store operator aims to diversify its product range with a focus on quality fresh food offerings. Supporting its efforts, IFC will advise GS25 Vietnam to enhance its in-store food safety practices and reduce food loss and waste.
For TTC AgriS, this will be its first commodity-backed warehouse finance loan provided by IFC and SMBC. The facility—to be processed under the IFC's Global Warehouse Finance Program (GWFP)—will especially help boost the local warehouse financing market in Vietnam, which is still at a nascent stage. The funding will also encourage local banks to participate in the agribusiness value chain to optimize agri-financing opportunities in this high-potential sector.
"The facility will allow TTC AgriS to take loans using raw materials as collateral, which will give us increased working capital to be more flexible to procure, store, distribute materials and goods, leading to a more efficient system. We firmly believe that the cooperation with IFC and SMBC will be an important part of TTC AgriS' circular economy development strategy, in line with its orientation of transforming into an integrated smart agro-economic business model to affirm its leading position as a comprehensive agriculture solutions provider in Vietnam and the region," said Dang Huynh Uc My, Vice Chairlady of TTC AgriS.
GWFP aims to increase working capital financing available to agricultural producers or traders by leveraging their commodities in storage. To date, GWFP has supported over $10 billion in global trade.
"IFC has made agribusiness a priority because of its potential for broad development impacts and strong role in poverty reduction. With solid economic growth, an emerging middle class, and rising demand for improved hygiene and food safety in Vietnam, both our investments will help offer improved product variety and services to consumers, support local producers, and facilitate commodity trade flows, key to the country's future resilience," said Thomas Jacobs, IFC Country Manager for Vietnam, Cambodia and Lao PDR. "It will further increase the competitiveness of the country's agribusiness value chain, generating much-needed jobs and improving people's livelihoods."
About IFC
IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2022, IFC committed a record $32.8 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises. For more information, visit www.ifc.org.
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About GS25 Vietnam
In 2018, the first GS25 VN store opened in Vietnam setting the new definition of convenience store (CVS) where customers can easily purchase a variety of products and services anytime and anywhere. Aiming to quickly solve customers' needs, GS25 VN has expanded to become a "lifestyle platform", which is a platform for both online and offline transactions as well as a major network for society for social and public services. Until now, GS25 VN has expanded its footprint to more than 200 stores across Ho Chi Minh City, Binh Duong, Dong Nai and Ba Ria – Vung Tau – making it the dominant brand in Southern Vietnam. For more information, visit https://gs25.com.vn/
About TTC AgriS
Establishing its position as a comprehensive agriculture solutions provider, from farm to fork and customer's factory, TTC AgriS actively transforms its business and governance model from purely agricultural production to an integrated smart agro-economic business model of Production - Import - Export - Trade and Service with multinational development orientation. In addition, TTC AgriS takes a new approach in developing its products, from a production mindset to an economic one, accompanying farmers in the role of connecting farmers - production - trade. TTC AgriS is pioneering in green agricultural transition toward zero discharge, increasing products and organic material area, reaching net zero by 2035, etc. to expand production and business activities, enhance production capacity and increase the market scope, in line with the TTC AgriS' development strategy.
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