IFC Representative: “We believe in long-term growth potential of Vietnam”

(NDH) Last week, IFC officially announced invested $6.5 million into PAN Pacific Corp., holding 5% of total shares of Pan. Said Mr.George Joseph Ghorra, Representative of IFC, IFC investment objective was well aligned with the “Farm. Food. Family” strategy of PAN Pacific.
We’ve just had a quick interview with IFC official representative Mr. George Josepth Ghorra about this investment deal and the point of view of IFC about investment opportunities in Vietnam in upcoming time.

Earlier in Sept 2014, as spoke in Gateway to Vietnam Conference , Mr. George Joseph Ghorra said that IFC targeted at developing financing and cooperation with banks to provide loan at lower rates for entrepreneurs

IFC has known as a big institution that has mainly invested in banks. Recently, IFC has also diverted the investments in mid-cap companies such as PAN Pacific Corp., what has made such changes in IFC’s strategies?

No change in IFC’s strategy. IFC’s mandate is to invest in the private sector, in developing countries. IFC’s investments, besides being financially viable, sustainable and profitable need to have a positive developmental impact.
IFC's mandate is to promote the private sector where we recognize growth potentials and opportunities for IFC to add value and support the company to grow and develop sustainably.

What does IFC find interested in PAN, and what is IFC’s point of view on the agriculture and food sector in Vietnam in the upcoming time?

One of the strategic investment pillars of IFC is “Food Safety and Security”, we recognize that this strategy is aligned with Pan Pacific’s “Farm, Food & Family”.
Firstly, PAN has proven its capacity in acquiring and managing agribusiness companies successfully.

Secondly, PAN is given strong sponsor with great vision: The Sponsor and SSI know the local market very well and have strong network which could potentially bring additional attractive acquisition opportunities to help Pan Pacific and its targets to grow further;

Thirdly, PAN is operating in the attractive market: agribusiness, consumer goods are attractive and growing fast at double digits. Vietnam has a comparative advantage for primary agricultural production. The coming time will see significant growth in the sector but local players like PAN, in order to become one of the leading companies in this sector, would need improvement not only in business scale but also to pursue sustainable development and IFC can support the sustainable development of the company in terms of E&S performance standards, corporate-governance and expertise in international industry best practices.

According to IFC, what would be the outperforming sectors in 2015?

The economists predict that Vietnam’s GDP is poised to grow at a healthy 5.5-5.7% for the next 2-3 years, while this is below the GDP growth experienced in the recent past, many countries in the developed world would love to see their economies grow at this pace.

IFC is convinced of the long term growth prospects in Vietnam. Vietnam has a golden demographic structure with rapid urbanization, rising disposable income and growing middle class US$90 million population.

Ranked 14th in the world and 3rd in South East Asia young and growing middle class with increasing disposable income, (68% or 60 million under aged 40) Vietnam also has an abundant well educated and motivated workforce (76% or 68 million aged 15-60).

According to OECD, there will be a big rise in the number of Vietnam’s middle class consumers, implying a higher standard of living along with demand for convenience goods, brand equity, quality products and services and health safety.

Vietnam’s banking sector has pushed up the transformation and restructuring in the first 6 months 2015, what would be IFC’s views on the preference of SBV in using local resources rather than foreign funding?

IFC is supportive of SBV’s strategy and efforts in consolidating the banking sector and dealing with NPLs and cross holding problems that have been hindering the sustainable growth of the financial sector in Vietnam.

We agree that mobilizing local resources are very important to such efforts. In the meantime, we believe that it’s equally critical to mobilize foreign investors as the local capital is limited; and that it is in the best interest of local the banking sector to open more to the foreign investment as Vietnam further integrates to the ASEAN and the world economy.

The foreign investment will bring in not only the long term financial risk capital but also the state of the art technical expertise in critical fronts such as corporate governance and risk management as well as the checks and balances for the long term sustainable growth of the sector.

Mai Phuong – Trung Nghia/NDH.vn

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