American investment fund invested in Vietnamese organic food company
Ho Chi Minh City _ 09 January 2019, SEAF WOMEN’S OPPORTUNITY FUND LLC (“SWOF”, an investment fund managed by SEAF), and ORGANICA INVESTMENT JOINT STOCK COMPANY (“Organica”) signed an investment agreement cooperating in the development of the organic food retail system by expanding the Organica retail store chain in Vietnam.
As a shareholder in Organica the SEAF team will be supporting the company in improving financial management and broadening business development opportunities in the future. Besides its equity investment, SWOF will also provide a long-term loan to Organica to ensure the company has sufficient capital to pursue its long-term growth plan.
Ms. Jennifer Buckley, Senior Managing Director of SEAF stated, “SEAF is a global investment manager headquartered in the U.S. with offices in 29 countries around the world, targeting small and medium size enterprises with high-growth potential in emerging market. In Vietnam, SEAF set up office 11 years ago, managing two funds and investing in more than 20 private companies operating in various business sectors.
Organica is the third investment made out of SEAF’s SWOF initiative, a new fund focusing on businesses founded and/or led by women and operating in sectors that represent significant positive social impacts. The SEAF team carried out extensive due diligence on Organica and its market as well as meeting all the key partners of the company, making visits to farms, and analyzing financial and operational data.... "Fortunately, besides Organica meeting SEAF’s operational and financial requirements, the company was also a strong fit for the other criteria set under SWOF. In particular, the founder of the company, Ms. Pham Phuong Thao, has scaled Organica from a small shop to a chain of organic food retail stores spanning Ho Chi Minh City, Hanoi and Da Nang. Organica is one of the organic food brands that is most widely recognized in Vietnam and is well trusted by both customers and business partners”, stated Ms. Buckley.
Ms. Buckley further noted, along with expansion on its retail business, that Organica has also invested in farms and cooperated with many farmers across the country to convert traditional agricultural production that used chemical fertilizers and pesticides into non-chemical agricultural farming. This is recognized as a sustainable farming method that is good for the development of the local communities as well as the living environment. The market for organic foods is growing globally, which is also true in Vietnam. SEAF believes that with its investment and support, Organica is well-positioned for strong growth in the future.
Ms. Pham Phuong Thao, Director of Organica said that although Organica and SEAF shared the same core values together, it took nearly two years for the two parties to build the partnership leading to the signed of today’s investment agreement. “As a startup company financed by only personal capital initially, we understand that now is the right time for Organica to bring in outside investors to grow stronger in order to realize the dream of bringing organic foods to more Vietnamese people.", said Ms. Thao.
Organica is one of the pioneering brands in producing and trading organic foods in Vietnam. The company started in 2013 with a shop selling about 20 items of organic foods on Nguyen Dinh Chieu Street, District 3, Ho Chi Minh City. With the business criterion of bringing certified organic foods to Vietnamese consumers, Organica has invested in an organic vegetable farm in Long Thanh (Dong Nai) with an area of nearly 2 hectares. “From my own needs, I understand that green vegetables are the daily food of Vietnamese consumers. However, at that time Organica could not find any reliable partner to provide certified organic vegetables. Therefore, the company decided to invest in organic agriculture itself to understand the farming practices, certification processes, as well as the overall farm management, which in turn helped the company to better cooperate with farmers thereafter.
After more than two years to the end of 2015, the organic vegetable farm in Long Thanh (Dong Nai) was assessed and certified by Control Union to meet criteria of the US Department of Agriculture (USDA) and European Union (EU) on organic standards. This is also the first tropical vegetable farm in Vietnam to achieve this certification.
To provide diversified vegetables and fruits choices to consumers, besides the tropical vegetable farms in Long Thanh, Organica has cooperated with farmers and partners in Lam Dong, Binh Phuoc, Dak Nong, Dong Nai and Hanoi to expand the system of organic farms to better meet the demands for produce supplies of the Organica retail stores in Ho Chi Minh City, Da Nang and Hanoi as well as the company’s online channels. The company also directly, or through its partners, imports hundreds of organic food products from the US, EU, Australia, Korea to distribute to domestic consumers.
“To date, the system of farms including the farms that Organica directly invested in, or contracted with, has been certified as organic farms or is in the process of being certified. “With farm land in the current farm system, we are confident that we can ensure production and distribution of organic products are poised for growth within the next 3 years. During that time, we will continue to cooperate with farmers in many places to support them to convert more of conventional agriculture to organic farming, which will benefit all parties involved, including Organica, farmers, consumers and the environment” Ms. Thao said.
Although the investment amount is not disclosed, Ms. Pham Phuong Thao also shared that the investment is sufficient for the company to implement its business plan in the next 2-3 years. The company will spend investment capital in opening more retail stores, upgrading online sales systems as well as investing in human resource and information technology systems that support the company's operations. “The reality is that the organic food market still remains a niche and cannot grow commercially very rapidly even having a lot of money invested in it. We are still making the small steps toward materializing the dream "Think Organic, Buy Organica" that the company has set at the first days of establishment." Ms. Thao said.
ABOUT SEAF
SEAF is an emerging market private equity fund manager targeting both financial returns and significant social impact by providing capital, capacity building, and a global network to support small and medium-sized business expansion. As an impact investor, the firm is particularly focused on women’s economic empowerment and gender equality, equal opportunity in health and education, clean energy and smart product & services, quality and sustainability in agribusiness, financial and technological inclusion, and displaced and migrant lens investing. The SEAF Women’s Opportunity Fund is investing up to 2 million USD per investment in growth-oriented, women-led businesses in Vietnam, the Philippines, and Indonesia. Since 1989, SEAF has invested in approximately 400 companies in 29 countries. For more about SEAF, see www.seaf.com. For more information on SEAF’s activity in gender lens investing, please contact Jennifer Buckley at jbuckley@seaf.com.
ABOUT ORGANICA
Website: www.organica.vn
Fanpage: f/thucphamhuucoorganica
Organica is an organic food development and distribution retail chain established in early 2013 with the goal of helping Vietnamese consumers to have a healthier life through certified organic foods and natural non-genetically modified (GMO) foods.
In 2015, after many efforts of self-development and production, Organica’s farm in Long Thanh, Dong Nai was certified organic by the US Department of Agriculture (USDA) and European Union (EU) and became a first organic tropical vegetable farm in Vietnam. Following that, in 2017, Organica’s Ba Vi farm was also evaluated by Control Union organization and certified to meet the American and European organic standards. Organica also used Traceverified, Vietnam's unique electronic traceability service, for the purpose of making information transparent and committing its organic farming process to consumers.
In addition to the products cultivated at the farms, Organica also collaborated with other local organic certified organizations to distribute products to Vietnamese consumers and import organic products for distribution in the country. Until now, Organica has nearly 1,000 certified organic items including fresh foods, dry foods, organic spices, organic cosmetics, family care products and personal care products made of cottons with international organic certification. Currently, Organica is working with partners in the US and EU to bring in organic products that not yet been available in Vietnam to develop the category of organic products to meet customers' requirements.
According to Organica’s commitment since its establishment, the company set aside 80% of display area in stores and product categories to sell certified domestic and foreign organic foods. The remaining 20% is for products in the process of converting to organic farming, natural products with environmentally friendly certification (such as MSC- regarding sustainable fishing; or UTZ- certification of sustainable development for cocoa, coffee and tea), a small part of this 20% is for local specialty products. All these products have certification of food safety and traceability.