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VinaCapital branches out with German fund in $30 mln wood market deal

By Dam Tuan   June 16, 2016 | 05:57 pm GMT+7

VinaCapital’s VOF investment fund struck a deal with German group KfW on June 15 to invest $30 million in the An Cuong Wood Working JSC (An Cuong).

In the An Cuong deal, VinaCapital will put up 70 percent of the capital while the remaining balance will be provided by the German groups investment fund, DEG. The investment will be disbursed in two stages and the first round worth $18 million has already been completed, according to a press conference held in Ho Chi Minh City on June 15.

The Vietnam Opportunity Fund and DEG - Deutsche Investitions- und Entwicklungsgesellschaft mbH - will offer Vietnam's An Cuong management support and ERP system deployment worth millions of dollar by the end of 2016. An Cuong has also committed to increase sales in the German market and meet European and regional environment standards.

vinacapital-branches-out-with-german-fund-in-30-mln-wood-market-deal

VinaCapital, KfW and An Cuong have announced a strategic partnership worth $30 million. Photo from dealstreetasia.com

Don Lam, VinaCapital CEO, said: "An Cuong has a factory and 10 showrooms across Vietnam, as well as representative offices in Cambodia, Malaysia, Japan, the U.S., Canada and Australia. The wood company’s consistent growth rate of 30 to 35 percent annually over the past several years is the main factor behind the investment.”

“The leading wood-working and decorative materials company posted an annual turnover of over $70 million in 2015 with dominant domestic market shares of over 50 percent in branded MFC panels and 70 percent in branded laminate panels,” the CEO added.

VOF’s investment in An Cuong brings the VinaCapital fund's stake in Vietnam to nearly $2 billion, while DEG’s investment portfolio is up to over $2.9 billion in Asia and the German fund is planning to pour nearly $100 million more into Vietnamese enterprises.

Don Lam said that Vietnam’s investment environment is drawing foreign investors due to its rapid and sustainable economic growth, low inflation and reforming investment environment.

Established in 1994, An Cuong manufactures a wide range of products including wood and laminate panelling, flooring and furniture. The company is a manufacturer and exporter for well-known brands in Japan, Southeast Asia, the U.S. and Europe.