SINGAPORE: Vietnam’s TTC Group, a sugar, energy and real estate conglomerate, is stepping up production of the sweetener and seeking new investors as it gears up for a Singapore listing of one of its sugar units in five years that would raise about US$600 million (S$818.5 million).
Ahead of the planned share sale, the group’s Thanh Thanh Cong Tay Ninh SC or TTC Sugar, will merge with another sugar company to create a combined entity worth US$200 million and Vietnam’s largest sugar company, group officials said in an interview. TTC Vice Chairwoman Dang Huynh Uc My, who has relocated to Singapore to spearhead the sugar unit’s listing, declined to identify the local merger partner but said the deal would be completed early next year.
“We aim to become a global player, thus we wanted to list in Singapore,” Chief Executive Officer Thai Van Chuyen said in an interview in the company’s headquarters in Ho Chi Minh City. The company has already expanded its sugar operations beyond Vietnam to Cambodia and soon to Laos, he said.
A supplier to Vietnam Dairy Products JSC and Kido Group, TTC Group is already moving to increase sugar production. The company is buying a sugar mill with a designed annual capacity of 70,000 tonnes and a 6,000-hectare sugarcane plantation from HAGL JSC, with the US$100 million deal expected to close in October. The mill will start operations in December and production at the plantation is expected to increase five-fold, with one third of output shipped to Europe in the next five years, said Ms My.
TTC Sugar is among the 10 sugar units owned by the conglomerate that contributed 53 percent of its pre-tax profit last year. The group expects its sugar business to generate US$35 million of its 2016 pre-tax income of US$62 million. Ms My said the parent conglomerate will invest an additional US$600 million in its sugar business through 2020.
The company is also targeting a 2.5-fold expansion in its Cambodian sugarcane plantation to 20,000 hectares (49,000 acres). The expansion will lower production costs by one-fifth, making Vietnamese sugar products more competitive with imported and black-market sugar products in the country, she said.
The group is also seeking to boost TTC Sugar’s foreign ownership to 35 per cent from 11 per cent during the first quarter of next year, said CEO Chuyen.
TTC Sugar shares rose 0.7 per cent on Friday in Ho Chi Minh City. The stock has surged 29 per cent this year, compared with the benchmark VN Index’s gain of 18 per cent.
