IFC to invest $60 million in Vietnam’s retail and agribusiness sectors

Xuan Thinh Friday | 06/16/2023 14:22

IFC to invest VND460 billion (around $20 million) in CVS Joint Stock Company, operator of GS25 Vietnam. Photo: Internet

International Finance Corporation, a member of the World Bank Group, has announced a total investment of $60 million in two Vietnamese firms.

IFC is making two new investments in Vietnam’s retail and agribusiness sectors, aimed at strengthening the agribusiness value chain and ensuring food security in the country. The investment also aims to help improve access to safe and quality food products and create jobs.

CVS Joint Stock Company, a subsidiary of SonKim Retail, will receive quasi-equity investment of VND460 billion (around $20 million), which will be used to expand the retail network of GS25 Vietnam, a leading convenience store operator in the country.

The funding is expected to help GS25, a joint venture between Vietnam’s SonKim Retail and Korean firm GS Retail, to open over 500 new convenience stores nationwide by 2025. The network expansion is expected to create up to 6,000 direct jobs and generate thousands more indirect jobs, with the company increasing its supply of locally produced food.

In addition, the partnership between IFC and Sumitomo Mitsui Banking Corporation (SMBC), a leading Japanese bank, will help arrange a $40 million commodity-backed warehouse finance facility for Thanh Thanh Cong - Bien Hoa Joint Stock Company (TTC AgriS), a major local agricultural enterprise.

This will be its first commodity-backed warehouse finance loan provided by IFC and SMBC. The facility will especially help boost the local warehouse financing market in Vietnam, which is still at a nascent stage. The funding will also encourage local banks to participate in the agribusiness value chain to optimize agri-financing opportunities in this high-potential sector.

IFC has made agribusiness a top priority because it has the potential to have a big impact on development and plays a big role in reducing poverty. Vietnam has a strong economy, a growing middle class, and a growing need for better hygiene and food safety, stated Thomas Jacobs, IFC Country Manager for Vietnam, Cambodia, and Lao PDR.

“Both our investments will help offer improved product variety and services to consumers, support local producers, and facilitate commodity trade flows, key to the country’s future resilience,” he added.