BAF Group, a major player in the Vietnamese agricultural sector, simultaneously acquires five pig farming companies in Quang Tri province and dissolves one agricultural company.

BAF Vietnam Agriculture Joint Stock Company (HoSE: BAF) has just approved a resolution to terminate the operations of an agricultural unit, and simultaneously acquire five pig farming companies in Quang Tri province.

A series of pig farming companies have fallen into the hands of the BAF conglomerate.

BAF Vietnam Agriculture Joint Stock Company (HoSE: BAF) has just approved a resolution to terminate the operations of its branch in Ba Ria - Vung Tau .

In addition, BAF has sent a notice to the State Securities Commission, the Ho Chi Minh City Stock Exchange, and the Hanoi Stock Exchange regarding the Board of Directors' resolution concerning the transfer of 171,500 shares, representing 49% of the charter capital, in five enterprises in Quang Tri province.

The five businesses acquired by BAF include: Hoang Kim HT-QT Joint Stock Company, Hoang Kim QT Joint Stock Company, Thanh Sen HT-QT Joint Stock Company, Viet Thai HT Joint Stock Company, and Toan Thang HT Joint Stock Company. All five businesses are located in Dong Ha City, Quang Tri Province, and were established in 2021.

In addition, BAF also approved a resolution to acquire 95% of the capital contribution in Khuyen Nam Tien High-Tech Livestock Company Limited for VND 47.5 billion. With the ownership of 95% of Khuyen Nam Tien Company Limited's shares, this will be BAF's second subsidiary in Dak Lak after Bao Ngoc Livestock Company Limited.

Reportedly, in October, BAF put into operation the Hai Ha farm complex, the largest in Northern Vietnam, covering nearly 50 hectares. Located in Hai Ha district, Quang Ninh province, this farm is BAF's second largest after the one in Tay Ninh. The investment cost for the Hai Ha farm complex was approximately 600 billion VND.

In particular, this farm applies the world's leading modern standard of "isolation zone," separating it from residential areas and surrounding it with mountains to achieve absolute biosecurity.

To date, BAF has put into operation a system of 36 high-tech pig farms spread across the country, bringing the total herd size to over 500,000 pigs, producing nearly 1 million commercial pigs annually. BAF stated that it will take over and put into operation 6 new farm clusters according to advanced technical standards in the period from 2024 to 2025.

This is BAF's second largest farm. Photo: BAF

Recently, BAF also signed a cooperation agreement with Muyuan Company - a business owned by China's richest pig farmer billionaire - to receive the transfer of smart livestock technology equipment and apply AI to the operational process throughout the entire livestock chain...

Muyuan plans to support BAF in achieving its expansion goals of 450,000 sows and 10 million fattening pigs by 2030. With advanced technologies transferred from Muyuan, BAF will upgrade its livestock waste management processes, recycle and efficiently utilize resources, thereby minimizing negative environmental impacts and developing a circular economy.

Gradually gaining market share from the decline of small-scale livestock farmers.

In terms of business operations, BAF previously shared positive business growth results, mainly due to the continuous expansion of herd size and increased pork sales volume over the past period.

In the third quarter of 2024, BAF Vietnam recorded revenue of over VND 1,300 billion, an 8% increase compared to the same period last year. Thanks to good cost control, especially from its two animal feed production plants, and a 10-20% decrease in raw material prices, gross profit increased by 56%, reaching VND 223 billion. The gross profit margin improved from 12% to 17% (with the livestock segment alone achieving a profit margin of up to 25%).

Revenue from pig sales in Q3/2024 reached VND 856 billion - a 2.3-fold increase compared to the same period and accounting for 65% of total revenue, thanks to a sales volume of 163,000 pigs. By the end of the quarter, BAF's total pig herd reached 520,000, a 73% increase compared to the beginning of the year, corresponding to a commercial pig production of approximately 1,000,000 pigs.

Thanks to improved gross profit margins and reduced losses from other operations, BAF Vietnam recorded a pre-tax profit of over VND 67 billion, a 63% increase compared to the same period last year.

For the first nine months of the year, BAF Vietnam recorded consolidated net revenue of VND 3,927 billion, an 8% increase compared to the same period last year. Pre-tax profit reached nearly VND 275 billion, a 4.6-fold increase compared to the same period last year.

Agriseco Securities (AGR) has assessed that BAF could experience positive growth in the last quarter of this year thanks to the following factors: Cooling down the price of animal feed raw materials. The prices of some animal feed raw materials such as wheat and corn have decreased by 30-40% compared to their peak in 2023. Given that animal feed raw materials are mainly imported, livestock businesses in Vietnam can reduce input costs in the context of cooling animal feed raw material prices.

Pork prices have recovered positively since the beginning of 2024. Currently, the average price of live pigs is still trading at 61,000 - 64,000 VND/kg, an increase of nearly 26% since the beginning of this year. This is due to the impact on the pig population from the recent African swine fever outbreak and Typhoon Yagi, affecting the supply of pork in the North and throughout the country.

In addition, the regulations prohibiting pig farming in the livestock law, which will officially take effect from 2025, will force many farmers to relocate or even close their farms, affecting the total pig population and giving large livestock companies like BAF the opportunity to increase production, revenue, and profits.

Despite being a relatively new entrant compared to Hoang Anh Gia Lai's banana-fed pigs, BAF Vietnam currently maintains its position among the top 5 largest livestock businesses in Vietnam.

Recognizing opportunities amidst the difficulties and the hesitation of its competitors, BAF has invested heavily in developing its farm and factory systems, ready to capitalize on the economic recovery cycle with the goal of becoming one of the top 3 companies in the industry. BAF Vietnam expects to double its total herd of vegetarian pigs by the end of 2024, reaching 75,000 sows and 800,000 fattening pigs.

Mr. Truong Sy Ba, representative of BAF Vietnam, affirmed that small-scale livestock farmers are BAF's vital competitors. The company aims to gradually capture market share from this group.

Representatives from BAF predict that the market share of small-scale farmers will continue to decline in the coming years. BAF, along with other livestock businesses, is gradually capturing the natural market share resulting from the decrease in small-scale farmers. It is expected that within the next 7-10 years, large livestock companies will have taken over the entire market share of small-scale farmers, at which point competition will truly intensify.

Source: https://danviet.vn/dai-gia-baf-mua-lien-mot-luc-5-cong-ty-chan-nuoi-lon-o-quang-tri-giai-the-mot-cong-ty-nong-nghiep-2024110909453834.htm