Vinamit and Indochina Capital, the company that manages ICVH, yesterday signed a contract under which Vinamit will sell 20 per cent of the company to the fund.

It will be the first company in the industry to do so.

The purchase will be the first investment in a farm produce processing firm by ICVH, which is a US$500 million fund listed on the main board of the London Stock Exchange.

Vinamit, the largest fruit and agricultural producer and exporter in the country, with total assets of VND300 billion ($18.7 million), represents around 90 per cent of the dried fruit and vegetable market in Viet Nam.

Vinamit CEO Nguyen Lam Vien said: "The international import market for fruit and vegetables has great potential, valued at over $100 billion per year, while the market for rice and coffee is less than $10 billion. We want to further tap the market, of which Vietnam makes up only 0.2 per cent."

He added that to do so his company needed more professional management that Indochina Capital could assist with.

"Viet Nam’s agriculture has great potential in the world’s market, and we see that Vinamit has a good development strategy," said Indochina Capital CEO Peter Ryder. He also noted that Indochina’s investment policy focuses on leading companies in their industries.

"It was very important to find a company that closely fits the strategic investment approach of our fund. With a track record of success and a leading market position, Vinamit was a perfect match," he added.

Indochina Capital’s strategic partner Mekong Securities Company will provide consultancy for Vinamit’s plan to list on the Viet Nam bourse in the first half of 2008.

Vinamit has had an average annual growth rate of 35 per cent in the past five years. Exports to markets including China, Singapore, Hong Kong, Thailand, Japan and the US represent 60 per cent of its turnover.

At the signing ceremony, Bureau Veritas awarded Vinamit with the certification for the Hazard Analysis and Critical Control Point System (HACCP), an important standard for food processors.

Also yesterday, officials from the provinces of Hai Duong, Dac Lac and Binh Phuoc approved in principle Vinamit’s projects on developing specialised farming areas to provide materials for its factories and building new production facilities.

Mobile retailer funded

In a related matter, Mekong Capital, which manages the $50-million Mekong Enterprise Fund II, Ltd., announced yesterday that the fund had committed to invest up to $4.5 million in Mobile World Joint Stock Company (Mobile World). This is the third investment of the fund, which was launched in June 2006.

Mobile World is one of the fastest growing, leading mobile phone retailing chains in Viet Nam. In HCM City, it accounts for a 20 percent market share operating eight outlets, including one laptop retail outlet, and one service center.

The fund’s other investments include International Consumption Products Joint Stock Company, which owns the X-Men brand of personal care products, and Ngo Han Magnet Wire Joint Stock Company.