IZ purchase brings An Phat Holdings closer to $1 billion revenue goal
By taking over Viet Hoa-Kenmark Industrial Zone (IZ), An Phat Holdings expects to actualise its billion-dollar revenue goal in 2018.
$1 billion revenue target
After winning at the auction organised by Bank for Investment and Development of Vietnam (BIDV) in March this year, An Phat became the new owner of Viet Hoa-Kenmark IZ and renamed the IZ to An Phat Complex Hi-Tech IZ.
An Phat Hi-Tech JSC, now An Phat Hi-Tech Industrial Park Ltd., a subsidiary of An Phat Plastic & Green Environment JSC (HSX: AAA), was established in October 2017 with the charter capital of VND100 billion ($4.42 million).
After receiving the IZ, AAA and An Phat Holdings focus on investing in the production of high-tech, eco-friendly plastic products such as biodegradable bags and high-tech PVC construction materials, with a total investment capital of VND2.05 trillion ($90.97 billion) and 6,000 employees.
At present, works are being carried out by the enterprise with the aim of completing the repair of the industrial park infrastructure and the five workshops by December this year. It is expected that the whole block will be completely renovated and eligible for business in July 2020.
An Phat Holdings also revealed that the firm expects to achieve the $1 billion revenue in 2018 in all sectors. By taking over IZ, An Phat Holdings will attract domestic and foreign investors and actualise its billion-dollar goal.
The firm also determined that the project’s life cycle is about 39 years (2018-2056) and the payback period is 10 years and six months. The revenue of the Industrial Park will mainly come from the lease of land available with infrastructure for 40 years and completed workshops, while the rest comes from the collection of wastewater treatment fees and infrastructure charges.
Looking at the ongoing projects in the plastics industry, An Phat Complex Hi-Tech IZ is considered a promising corporation.
16 years since its establishment in 2002 with the charter capital of only VND500 million ($22,100), An Phat has a stable position in business and is now a corporation with 2,500 employees and 11 subsidiaries.
In 2017, the thin film packaging production of An Phat Holdings reached 8,000 tonnes per month, which made the firm the largest manufacturer and exporter of plastic films in Southeast Asia, with 100 per cent products exported.
Reviving the notorious Viet Hoa-Kenmark IZ
Viet Hoa-Kenmark IZ was licensed in 2005 with the scale of over 46 hectares in Viet Hoa, Hai Duong. The developer Kenmark Group from Taiwan promised to inject $500 million to turn the empty land into a mammoth IZ.
According to the plan, in the first phase, Kenmark was set to disburse about $98.4 million. However, after three years of deployment and building infrastructure, including a wastewater treatment plant and 13 factories, in 2010, the developer abruptly returned home, suspending the project without further notice.
The problem is that previously Kenmark borrowed $67.6 million from three banks ($39.1 million from BIDV, $18.5 million from SHB, and $10 million from Habubank). Subsequently, Habubank was merged with SHB, who inherited Habubank’s loans.
BIDV also put the IZ on sale numerous times to recover the loans, but failed until the auction on March 2018, where An Phat Hi-Tech Joint Stock Company paid a price equalling the starting price of the auction (VND756.45 billion – $33.47 million), resolving “the blood clot” that Hai Duong authorities were anxious to remove for years.
Now it all rides on An Phat Holding to turn the tides and revive the IZ to gradually realise its billion-dollar revenue target.
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