IFC investments to help boost agribusiness value chain and create jobs

The International Finance Corporation (IFC) made two new investments in Vietnam’s retail and agribusiness sectors on June 16, with the goal of bolstering the agribusiness value chain and ensuring food security in the country. The investments will help improve access to safe and high-quality food items while also creating jobs and boosting competitiveness.

The IFC’s quasi-equity investment of VND460 billion (around $20 million) in the CVS Joint Stock Company, a subsidiary of the Son Kim Retail Corporation (SonKim Retail), will help expand the retail network of GS25 Vietnam, a leading convenience store operator in the country.

Increasing access to modern retail, the funding will help GS25 Vietnam - a joint venture between Vietnam’s SonKim Retail and South Korea’s GS Retail - open over 500 new convenience stores nationwide by 2025. The expansion is expected to create up to 6,000 direct jobs (more than 60 per cent of which are for women) and generate thousands more indirect jobs, with the company increasing its supply of locally-produced food.

“SonKim Retail is very excited to be joined by the IFC in its mission of bringing to the people of Vietnam enhanced shopping options, delivered conveniently in a fair, friendly, fresh, and fun manner,” said Mr. James Michael Kershek, Chief Executive Officer of SonKim Retail. “We are deeply committed to championing environmental, social, and governance (ESG) best practices, as demonstrated by our diverse and fast-growing workforce, safe and sustainable food offerings, and management decision-making processes. This alignment in beliefs and goals well positions SonKim Retail in Vietnam’s fast-growing retail sector.”

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

To be processed under the IFC’s Global Warehouse Finance Program (GWFP), the facility will especially help boost the local warehouse financing market in Vietnam, which is still in a nascent stage of development. The funding will also encourage local banks to participate in the agribusiness value chain to optimize agri-financing opportunities in this high-potential sector.

“The facility will allow TTC AgriS to take out loans using raw materials as collateral, which will give us increased working capital to be more flexible to procure, store, distribute materials and goods, leading to a more efficient system,” said Dang Huynh Uc My, Vice Chair of TTC AgriS. “We firmly believe that the cooperation with the IFC and SMBC will be an important part of TTC AgriS’s circular economy development strategy, in line with its orientation of transforming into an integrated smart agro-economic business model to affirm its leading position as a comprehensive agriculture solutions provider in Vietnam and the region.”

“The IFC has made agribusiness a priority because of its potential for broad development impacts and strong role in poverty reduction,” said Mr. Thomas Jacobs, IFC Country Manager for Vietnam, Cambodia and Lao PDR. “With solid economic growth, an emerging middle class, and rising demand for improved hygiene and food safety in Vietnam, this investment will help offer improved product variety and services to consumers, support local producers, and facilitate commodity trade flows, which are key to the country’s future resilience. It will also further increase the competitiveness of the country’s agribusiness value chain, generating much-needed jobs and improving people’s livelihoods.”