Alliance Tuna eyes majority stake in Vietnamese firm

MANILA, Philippines - Canned tuna exporter Alliance Tuna International Inc. is eyeing the purchase of a majority stake in Vietnamese rice milling and fish processing firm Hiep Thanh Group for $13.1 million.

The Hiep Thanh Group is Vietnam’s largest private rice milling company and owns one of the few integrated farms owning fish farms and feed mill processing facilities. Its unit Seafood Joint Stock Co. (HTS) exports pangasius (also known as cream dory or cobbler) and is among the top 10 largest exporters in Vietnam.

In a disclosure to the Philippine Stock Exchange, Alliance Tuna said it signed an agreement to conduct a 90-day due diligence on HTS, with the goal of investing in the Vietnamese group.

“If the results of the due diligence exercise are favorable, Alliance Tuna will invest a total of $13.1 million for a 50 percent plus one share stake in Hiep Thanh,” the company said.

Alliance Tuna said $10.5 million of these funds will be used to buy out some current shareholders and retire debt. The balance will be used for capital expenditures, mainly for introducing higher margin, value-added cream dory products.

Management is currently evaluating various investment structures to undertake the investment and will disclose the preferred method once a final decision on it has been made, the firm added.

Alliance Tuna said investing in Hiep Thanh will likely boost its revenue and earnings as well as broaden its product portfolio to include rice.

“With these building blocks in place, Alliance Tuna is ensuring its future growth and profitability,” Alliance Tuna corporate information officer Rajat Balain said in a statement.

Alliance Tuna, which has tuna canning facilities in Gen. Santos City in Mindanao and in Bitung, North Sulawesi, Indonesia, is eyeing consolidated revenues of over $150 million this year.

With the pangasius gaining popularity globally as a premier source of economically priced white meat fish, Alliance Tuna intends to use its existing marketing distribution channels to offer additional products to its seafood clients.  

Direct access to major supermarket chains around the world will enable Alliance Tuna to sell Hiep Thanh’s products to major buyers, increasing HTS’s profitability.