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Construction materials maker finds investor
The VinaCapital Group's Viet Nam Opportunity Fund will invest US$15 million in construction materials manufacturer Prime Group, under a strategic alliance agreement signed on Wednesday.
"Prime wants to maintain its leading position in the construction materials sector, and we need a strong and capable strategic investor to realise our slogan ‘Prosperity is Prime'," said Prime Group Chairman Nguyen The Vinh.
"We believe Prime Group has solid management and an established reputation in the marketplace," said VinaCapital's head of investment, Andy Ho. "More importantly, they can rely on economies of scale to offer the best products at competitive prices."
VinaCapital also saw the potential growth of Prime in the southern market and export market, Ho said.
As a strategic investor in Prime, VinaCapital expected to help Prime make its initial public offering (IPO), develop its business operations and seek other strategic investors, he added.
Prime Group was expected to make its IPO in the third quarter of 2010.
"Prime Group expects earnings growth of over 35 per cent annually for the next three years, with a new factory to be commissioned in 2011 that will increase ceramics production capacity by 20 per cent," said Prime Vice Chairman Nguyen Van Nghia.
Prime was currently focused on the domestic market, although it earned $7 million from exporting ceramic tiles last year to India, Taiwan, South Korea, Yemen and Sri Lanka, Nghia said.
In the future, the company would focus on expanding export markets in Asia and Africa, he added.
Prime is Viet Nam's leading ceramics manufacturer, with a total capacity of 90 million square metres of tile per year at eight factories and a nationwide distribution network resulting in a market share of over 30 per cent.
Prime was established in 1999 as Vinh Phuc Co, Ltd, with one factory producing ceramic tiles, and reorganised in 2005 with business lines in construction materials, mining, real estate and commerce. The group currently includes over 25 affiliated companies.
"Viet Nam's rapid urbanisation of over 3 per cent yearly is a long-term trend that provides the foundation for Prime's growth over many years," said Ho.
VinaCapital Group is one of the nation's leading asset management, investment banking and real estate consulting firms. It was founded in 2003 and has grown from a single $10 million fund to a diversified investment firm with over $1.7 billion in assets under management as of December 2009.
VinaCapital Investment Management Ltd manages three closed-end funds trading on the AIM Market of the London Stock Exchange, including the Viet Nam Opportunity Fund (VOF), VinaLand Limited (VNL) and Viet Nam Infrastructure Limited (VNI).
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