International Finance Corporation-backed niche food processor Nafoods Group has secured a $5 million senior loan from Finnish development financier Finnfund, according to a statement by the Vietnamese firm.

The loan facility, with a six-year term, will be used to build a new value-added products processing facility at Nafoods’ Long An-based factory. The processing unit has a 150MT monthly capacity for soft dried sugar and non-sugar tropical fruits, and up to an additional 150 MT capacity for all-natural cashew and peanut butter. The two-phase development will be completed by the end of 2020, Nafoods said. “Nafoods is very fortunate to have long-view partners like Finnfund to support our vision of delivering Vietnam-made, quality value-added products to developed markets in spite of Coronavirus’ current global economic impact,” commented Nafoods’ chief growth officer and board member Ryan Galloway. Financing export-oriented agribusiness companies like Nafoods is a major focus of Finnfund’s strategy, said Markus Pentikainen, Finnfund’s investment manager. Founded in 1995, Nafoods has been selling its products to more than 60 countries worldwide, claiming an annual revenue growth of over 42 per cent for the past two years. Its operations include seedlings, juice concentrate and frozen fruit, soft dried tropical fruit and nut butter. The firm recorded nearly 50 billion dong ($2.15 million) in net profit last year, up from 40.4 billion dong a year earlier. It raised an $8 million quasi-equity investment from the International Finance Corporation (IFC) in June 2019, which was a part of a $28.2-million package including internally generated cash and equity/bank borrowings that IFC had proposed earlier. IFC held 27.8 per cent preference shares of Nafoods as of September 2019, according to local financial information aggregator CafeF. The Helsinki-based Finnfund provides equity, long-term loans and mezzanine financing to private companies operating in developing countries. In Vietnam, it has also funded seafood firm Australis Aquaculture Vietnam. Among its other Southeast Asia investments are Frontier Tower and SaraRasa Biomass in Indonesia, Malaysia’s Tropical Asia Forest Fund, mBank Philippines, Prasac Microfinance in Cambodia and Mekong Brahmaputra Clean Development Fund in Thailand.

Source: https://www.dealstreetasia.com/