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Unlocking the Export Potential of Vietnam’s Tropical Fruits: BIG Ventures into Agricultural Business with a Focus on Dollar-Valued Produce

19 November, 2024

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Diving into the Agricultural Sector, Focusing on Exporting the “King of Fruits”

On November 18, 2024, BIG announced the establishment of two agricultural companies: Big Agro Corporation and BGD Agro Import-Export Joint Stock Company. Simultaneously, BIG also signed a strategic cooperation agreement with Hung Nguyen Agricultural Import-Export Company Limited.

Signing ceremony of the establishment of the two agricultural companies by Big Invest Group’s Board of Directors on November 18, 2024

BIG officially listed its shares on the UPCoM exchange at the beginning of 2022. With the main revenue coming from the construction materials trading sector (approximately 80%) but modest profit margins, BIG’s management has been continuously seeking more efficient business operations. Agricultural business proved to be the answer.

With the formation of the two new companies, BIG will engage deeply in agricultural business operations (exporting, developing growing areas, and logistics). For now, BIG will focus on exporting durian – the king of fruits, through a strategic partnership with Hung Nguyen Agricultural Import-Export Company Limited.

Hung Nguyen is a 13-year-old company specializing in purchasing and exporting durian to China. They currently have four warehouses (in Long An, Tien Giang, Binh Thuan, and Dak Lak) spanning nearly 60,000 square meters. Mr. Dang Van Tuan, CEO of Hung Nguyen, shared that each durian season (lasting 3-4 months), the company exports approximately 1,000 tons of fresh durian to China, generating revenues of around VND 2,500 billion.

BIG’s Board of Directors visits the partner’s agricultural warehouse in Long An

In addition to financial support for procurement, BIG will also provide other logistics services. Furthermore, BIG is considering developing growing areas in the future. BIG’s Chairman, Vo Phi Nhat Huy, stated that durian is the king of fruits favored by the 1.4 billion population market in China, and the demand is increasing yearly. Vietnam has been officially exporting fresh durian to this market since 2021, and frozen durian is expected to follow by the end of 2024. These are the driving factors for a significant boost in durian exports in the upcoming years.

According to Mr. Huy, the agricultural business, particularly trade with durian export partners, can bring substantial revenue and higher profit margins compared to traditional businesses. Meanwhile, BIG has also timely enhanced its financial capacity to seize the significant opportunity in agricultural exports. Specifically, BIG has successfully raised its capital to over VND 140 billion and will further increase it to over VND 150 billion in the near future. Additionally, with a robust financial position (low debt, stable business operations, and quality assets), BIG can easily access low-interest loans from various banks for the agricultural sector.

Significant Capital Enables BIG to Target VND 350 Billion Revenue in 2024

According to Chairman Vo Phi Nhat Huy, with the numerous advantages after the capital increase, BIG can take off immediately in the fourth quarter of 2024. The focus will be on expanding operations and scaling up the business.

Particularly in the field of Agricultural Trade and Export, this sector is expected to contribute significantly to the company’s revenue in 2024. Specifically, the Chairman of BIG estimates that the company’s revenue in 2024 will reach VND 350 billion, far surpassing the initial target of VND 250 billion set at the beginning of the year. The Agricultural Trade and Export sector is projected to account for approximately 40% of this revenue.

According to BIG’s Vice Chairman, Mr. Kieu Van Khoa, BIG is in detailed discussions regarding collaboration terms with four agricultural business partners. “BIG will cooperate in various operational and financial aspects and gradually deepen its involvement in the agricultural ecosystem. In addition to Hung Nguyen, BIG will soon officially sign strategic cooperation agreements with other partners,” said Mr. Khoa.

The agricultural business is a promising venture but requires substantial capital. After tripling its capital, BIG has more opportunities to engage profoundly and increase profits from this new sector. Mr. Huy shared that BIG could achieve a revenue of VND 150 billion in the fourth quarter of 2024.

Apart from the significant revenue potential, this sector also offers attractive profit margins. Therefore, Chairman Huy stated that he would allocate most of the company’s resources to boost the Agricultural Trade and Export business. In addition to internal resources, several banks have also expressed their willingness to provide loans to BIG at relatively low-interest rates.

At the beginning of 2023, BIG set a target of achieving VND 256 billion in revenue and VND 8 billion in after-tax profits. However, with the addition of the agricultural sector, these results could witness significant growth. According to Ms. Thao (BIG’s CEO), these are the relentless efforts of BIG’s management to fulfill their promises to shareholders. This includes increasing sustainable profits, paying dividends after two years of listing, and laying the foundation for listing on the HNX or HOSE in the future.

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