BaF Vietnam Agri

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 Established in 2017, BAF Vietnam Joint Stock Company (BAF or the Company) is a vertically integrated pork producer and feed mill operator.  BAF currently operates two feed mills with a combined production capacity of 254,000 MT/year, with a third mill to be commissioned in 2022 with a capacity of 200,000 MT/year. BAF farming division owns a total of 13 pig farms with two Great Grandparent (GGP) and Grandparent (GP) stock, three commercial sow units (or Parent Stock (PS)) and eight finishing farms (with a ~110,000 capacity head per annum) across 13 provinces. The company expansion plan is to increase its GP stock by 4 farms and ~21,000 head, PS stock by 36 farms and ~180,000 head, and 48 finishing farms and 2.1 million head capacity per annum by 2032. Slaughtering and meat processing of BAF pig production is currently contracted out to a third-party vendor. BAF plan to develop two slaughterhouse and meat processing operations with a capacity of 4,000 head per day per plant. These plants include food safety management systems (FS MS) aligned to European Union (EU) standards.  The proposed IFC investment of up to US$39 million equivalent in a VND600 billion convertible bond and a VND300 billion senior bond to BAF is part of IFC Agribusiness’s African Swine Fever (ASF) Regional Recovery Program. This proposed financing is to support BAF growth of its genetic breeding stock and breeding farms in Vietnam. Specifically, the sites under construction/planning for this project include: (i) two feed mills (one in planning stage while the other is under construction), including machinery; (ii) one slaughterhouse and meat processing facility (planning stage); and (iii) expansion of pig farm production capacity with 13 sow farms and 18 hog farms (planned in 2022-2023). Of these 31 farms, one is in operation, four are under construction, four are bidding for contractors, and five farms are in planning stage while the remaining 17 farms are not yet identified at the time of the appraisal.  BAF farm expansion model is to identify suitable locations for pig farms, through either acquiring the land use right directly with self-build, own and operate, or engage partners to conduct the construction under a lease back/rental arrangement. Under the rental model, the landowner constructs the facility to the agreed design and technical specification then renting the finished unit back to BAF. For acquisition, BAF acquires the site from the landholder and developing the facility itself. The third farm expansion approach is rental of existing farms (constructed by other owners) with capital expenditures (CAPEX) to upgrade the facilities with long term lease agreements with the landowner. In all farm expansion and development models, BAF have management control over the facility and take direct responsibility for the facilities, employing staffs, and applying the standardized BAF operating standards (SOPs). The economic life expectancy of the farm operations is 20 years. For all construction and refurbishments, BAF engage construction contractors and its own team oversee the construction process.