Reporting at the 2023 Annual General Meeting of Shareholders (AGM) held on May 10, the Board of Directors of BaF Vietnam Agriculture Joint Stock Company (BaF) said that over the past year, the livestock industry has faced many difficulties when facing issues related to epidemics, disruptions in the supply chain of input materials, while the output price of live pigs has continuously decreased over a long period of time. In addition, high exchange rates and interest rates have affected the business activities of companies.
BaF to launch exclusive 'vegetarian pork' brand in October 2022
However, this is the year that shows the growth in scale of BaF when it rises to the top 5 largest pig farming enterprises in the country. Regarding FEED, the company has put into operation 3 "vegetarian" feed factories producing 100% plant-based animal feed, without lean substances, ensuring nutrition for livestock. The three factories have a capacity of about 460,000 tons/year, achieving 2 of the highest world certifications for the quality management system of animal feed production: Global Gap CFM 3.0 and FSSC 22000 Ver 5.1.
Regarding FARM, BaF has put into operation and started construction of a series of farms, increasing the number of operating and deployed farms to 23. BaF's closed farm system applies modern technology from Europe, automatic feeding technology through a central control system to minimize contact between humans and animals, minimize disease, significantly reduce labor costs, and achieve a water circulation rate of 95%. By the end of 2022, BaF's total herd will reach 200,000 pigs (17,000 sows and 120,000 pigs), a sharp increase compared to the beginning of the period.
In the FOOD segment, this enterprise has successfully launched the high-quality vegetarian pork product BAF Meat using completely vegetarian bran of vegetable protein origin. At the same time, it has continuously expanded its distribution chain with more than 60 Siba Food stores and more than 300 Meat Shops across Vietnam. The total output of pigs sold in 2022 reached more than 303,500, nearly doubling over the same period.
According to the 2022 consolidated financial report audited by Ernst & Young Vietnam Co., Ltd., the consolidated net revenue for the whole year reached VND 7,083 billion from livestock farming and agricultural product sales, completing 119% of the annual plan. Revenue from the livestock sector reached nearly VND 1,373 billion, up nearly 80% over the same period. The revenue structure has shifted strongly when the livestock sector rose to account for nearly 19% of the revenue structure compared to 7% in the same period, affirming the transformation in the strategy of becoming a modern livestock group following the leading 3F model in Vietnam. Profit before tax and profit after tax reached VND 338 billion and VND 288 billion, respectively.
The General Meeting of Shareholders approved the 2023 production and business plan, setting a net revenue target of VND 6,914 billion - an increase of 16% compared to the 2022 plan. Regarding the after-tax profit plan, the meeting set a plan of VND 301 billion, an increase of 5% compared to the implementation in 2022. With the development in the scale of the barn, the output of pigs sold in 2023 is expected to be 348,770, an increase of 14% compared to the implementation in 2022.
Mr. Truong Sy Ba - Chairman of BaF Board of Directors (middle) speaking at the General Meeting of Shareholders
This congress approved the plan to pay a dividend of 17% in shares. This is a high dividend rate in the context of focusing resources on developing the farm system and distribution chain. In addition, the congress also approved the issuance of ESOP shares at a rate of 5% and the public offering of shares to existing shareholders at a ratio of 100:47 (47.677%), selling price of 10,000 VND/share. The total expected revenue is 750 billion VND, increasing the charter capital to 2,435 billion VND. The proceeds from the issuance will be used to supplement capital for livestock farming, agricultural business, and contribute capital to subsidiaries to build farms.
In 2023, the Board of Directors of the company plans to accelerate the operation of 7 farms and continue to start construction of 6 more farms according to the strategy of expanding the scale of the barns. It is expected that the total herd by the end of 2023 will reach 337,000 pigs, double the same period.
During the discussion, Mr. Truong Sy Ba - Chairman of the Board of Directors of BaF informed that in the context of the ASF epidemic that has been raging recently, the total pig herd in Vietnam has decreased by 20 - 25%. The price of pigs traded around the bottom has caused farmers to sell massively and limit herd restoration. Farmers depend on breeding pigs, so the cost price is up to 53,000 - 54,000 VND/kg. Thanks to good implementation of biosecurity measures and maximum limitation of the epidemic, BaF has kept the cost price at around 45,000 VND/kg. Under the impact of the epidemic, the price of pigs is expected to increase again in the following months.
"BaF is actively increasing the size of its herd to catch the rising pork price wave in the near future. The orientation is to continue expanding the modern farm system, putting into operation 9 more farms by the end of 2024. The total herd is expected to reach 90,000 sows and 2.2 million commercial pigs," said Mr. Truong Sy Ba.
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