The 11th livestock company belongs to BAF, revealing a big goal when continuously capturing the market

From October 2024 to present, BAF Vietnam has conducted M&A with 11 livestock companies in Thanh Hoa, Quang Tri, Dak Lak and Binh Phuoc . Previously, in early 2024, this company also acquired 99.9% of the contributed capital at Thanh Dat Gia Lai CNC Livestock Joint Stock Company.

BAF builds farms with lightning-fast M&A strategy

BAF Vietnam Agricultural Joint Stock Company (Code: BAF) has just announced that it will receive the transfer of 60% of charter capital at Minh Phat Livestock Company Limited and 60% of capital at Nhat Quyet Livestock Company Limited.

These are two livestock companies with the same charter capital of 60 billion VND in Binh Phuoc province. The legal representative is Ms. Dang Thi Ngoc Dung; the main activity is renting out barns to owners, users or tenants.

BAF is emerging as a phenomenon in the livestock industry with a strong M&A strategy. Since October 2024, BAF Vietnam has conducted M&A with 11 livestock companies in Thanh Hoa, Quang Tri, Dak Lak and Binh Phuoc. Earlier in early 2024, the company also acquired 99.9% of the capital contribution at Thanh Dat Gia Lai CNC Livestock Joint Stock Company.

BAF Vietnam said that the livestock enterprises that were acquired by M&A this time all have available land funds for livestock farming activities or are in the process of completing legal procedures to deploy farms; at the same time, there are plans to buy back all the capital of these companies.

The Board of Directors of BAF Vietnam Agricultural Joint Stock Company has just announced resolutions on receiving capital transfer of two livestock companies headquartered in Loc Ninh district, Binh Phuoc province.

According to Mr. Ngo Cao Cuong, BAF's CFO, the company is applying a rapid acquisition strategy to take advantage of market gaps, especially when the new regulations of the Animal Husbandry Law take effect from January 1, 2025. Small-scale livestock farms in residential areas will be forced to relocate, creating great opportunities for large-scale companies like BAF to expand market share.

Experts estimate that thousands of small-scale farms will have to leave the market due to the high costs associated with biosecurity procedures to prevent diseases and price fluctuations. This trend will benefit industrial, closed-loop livestock enterprises like BAF Vietnam.

Besides, with the advantage of using cheap animal feed ingredients, BAF Vietnam's livestock gross profit margin is quite high compared to the industry average.

In the first 9 months of 2024, BAF reported a profit after tax of VND 215 billion, more than 4 times higher than the same period last year, completing 70% of the annual plan. This increase comes from the strategy of expanding the pig herd and optimizing the farm system nationwide.

BAF management has set an ambitious goal of balanced development across all three regions to optimize coverage. The farm system is not only focused on output but also aims for high standards of biosecurity and environmental protection.

According to DSC Securities Company, BAF is taking full advantage of opportunities from changes in laws and the need for transformation in Vietnam's livestock industry. A strong M&A strategy not only helps the company increase its scale rapidly but also creates a significant competitive advantage over its competitors.

BAF aims to increase commercial pig production tenfold

To date, BAF’s pig herd size has increased significantly, from approximately 330,000 heads at the end of 2023 to 520,000 heads at the end of September 2024, equivalent to a growth rate of 73%. Accordingly, BAF Vietnam’s commercial pig output is expected to reach 1 million heads.

BAF aims to increase the total herd to 100,000 sows by 2025 (an increase of more than 30%), to 185,000 sows by 2026 (an increase of 85%) and to about 260,000 sows by 2027 (an increase of 40.5%).

By 2030, the company plans to have 102 farms with a total herd of 450,000 sows, producing 10 million commercial pigs, 10 times more than at present. The farm system will be developed in a balanced manner in the three regions of the country, instead of being concentrated in a certain area, to optimize coverage and operational efficiency.

BAF's board of directors shared that the company plans to spend about VND3,000 billion to build 15 farms to expand its scale in 2025. If it cannot build in time, the company will rent or find a partner with available capital and land to build farms according to the company's model and then rent them back.

BAF Vietnam actively "hunts" for farm land.

It is known that BAF wants to offer up to 65 million individual shares to professional securities investors without any limit on quantity. The shares will be restricted from transfer within one year from the date of completion of the offering. The expected implementation time is in 2024 - 2025 after the company completes the offering registration with the management agency.

With over VND1,000 billion raised from the offering, BAF plans to use nearly VND558 billion to buy feed, additives, and raw materials for pig farms; VND450 billion to buy breeding pigs, weaned pigs, and gilts for the farms. The expected disbursement time is from the fourth quarter of 2024 to the fourth quarter of 2025. If the offering is successful, BAF will increase its charter capital from VND2,390 billion to VND3,040 billion.

According to BAF, the increase in charter capital is important for the company to achieve the livestock sector's goal of reaching 1.5 million commercial pigs sold to the market in 2025; 10 million commercial pigs sold to the market in 2030; a total herd of 400,000 sows in 2030 and becoming one of the three largest livestock enterprises in Vietnam.

Currently, the company's total pig herd is 11,000 grandparent and great-grandparent sows, over 38,000 parent sows, equivalent to 1 million gilts and commercial pigs. In addition, BAF also owns 36 modern pig farms and breeding farms that are already in operation.

To improve production capacity, in September 2024, BAF and Muyuan Livestock and Food Group (China) signed a strategic cooperation agreement on transferring barn equipment technology and applying AI to the operating process throughout the livestock chain.

The Muyuan partner said it can help BAF achieve its goal of expanding to 450,000 sows and 10 million pigs by 2030, while also helping BAF reduce water and land costs.

The year 2024 marks an important turning point for our country’s pig farming industry, as advances in modern technology and management are creating positive and promising changes. Faced with challenges from disease, market fluctuations and environmental pressures, the pig farming industry has witnessed the rise of sustainable farming models, applying high technology and smart business strategies. These improvements not only help increase productivity and pork quality, but also contribute to minimizing negative impacts on the environment and improving animal welfare.

Therefore, the pork consumption market is expanding, especially in Asian countries, where pork is an important part of the daily diet. Increased income and nutritional awareness have boosted the demand for high-quality pork. Pig farming enterprises are also seizing this opportunity to develop organic pork products and ready-to-eat products to meet diverse market needs. At the same time, expanding international cooperation and participating in the global supply chain also creates many new business opportunities, helping to increase the value and sustainable growth of our country's pig farming industry.

In early January 2025, the price of live pigs nationwide increased compared to the last month of the previous year, with surveyed prices in provinces and cities fluctuating between 67,000-70,000 VND/kg.

Specifically: The price of live pigs in the Northern region fluctuates between 68,000 - 70,000 VND/kg. The price of live pigs in the Central and Central Highlands regions fluctuates between 67,000 - 69,000 VND/kg and still shows signs of increasing. The price of live pigs in the Southern region fluctuates between 67,000 - 69,000 VND/kg, these days the price of live pigs still tends to increase.

Source: https://danviet.vn/cong-ty-chan-nuoi-thu-11-ve-tay-baf-he-lo-muc-tieu-lon-khi-lien-tuc-thau-tom-thi-truong-2025011515531273.htm