Bamboo Capital to put more energy into infrastructure, drug sectors

Vietnamese conglomerate Bamboo Capital Group is driving its growth based on three core businesses - infrastructure, renewable energy, and real estate - and will invest more in the pharmaceutical sector, the corporation’s leadership said.

The group, better known as BCG, will put more energy into the infrastructure construction sector via its subsidiary Tracodi this year as the government seeks to speed up public investment in infrastructure development to support Vietnam’s growth amid prolonged global headwinds, BCG vice chairman Pham Minh Tuan told his company’s annual general meeting (AGM) Friday.

Tracodi, listed on the Ho Chi Minh Stock Exchange as TDC, is a major firm in the infrastructure sector. In Q1/2023, Tracodi recorded revenue of more than VND300 billion ($12.8 million) and net profit of VND60 billion ($2.56 million). It set targets of VND3.3 trillion ($141 million) in consolidated net revenue in 2023, up 13% on last year, and net profit of over VND267 billion ($13.39 million), down 20%.

A shareholder asked about the infrastructure sector’s potential for BCG. Deputy CEO Luu Xuan Thuy said Tracodi holds a Class-one certificate in road building, Vietnam’s highest class for this type of construction, showing its competency in joining national infrastructure development projects.

“The government is speeding up work on major highways and expressways across the country, and this is an advantage for our infrastructure business,” Thuy said.

Another advantage, he said, is that BCG owns one of two operational quarries in the Mekong Delta, a region with great significance for the whole country as it includes 13 provinces and serves as Vietnam's rice bowl. This is the Antraco quarry in An Giang province. Thuy said several expressways would be soon built in the south, including Chau Doc-Can Tho-Soc Trang in the delta, and Bien Hoa-Vung Tau near HCMC.

BCG chairman Nguyen Ho Nam said his conglomerate is going to join bidding for major road projects. As for building materials for road construction, Nam said owning a major quarry means lots of advantages in developing infrastructure facilities like pricing, supply, and delivery time.

BCG, headquartered in HCMC, is known for its business acquisition deals, with Tracodi joining the group via an M&A deal.

M&As will help it invest more in the drug sector, vice chairman Tuan told the AGM. According to him, the industry offers more opportunities post-pandemic.

In August 2022, BCG purchased 1.3 million shares of Vietnam’s Tipharco Pharmaceutical JSC based in the Mekong province of Tien Giang to become a major shareholder, holding a 21% stake in the leading drug firm.

For this year, BCG plans to continue expanding Tipharco’s business through distribution channels and increasing the number of sales agents.

In renewable energy, Tuan said sector investors including BCG Energy of BCG expect the government to issue the country’s Power Development Plan VIII, the latest that is expected to help the nation reach its carbon neutrality goal by 2050. Therefore, the energy arm will continue to serve as one of the group’s three core businesses.

BCG chairman Nam told the meeting that the energy subsidiary has recently received $31.5 million disbursed by three major Singapore banks (DBS, Oversea Chinese Banking Corp. and United Overseas Bank) as part of a credit line totaling $50 million.

“This is rather cheap capital for us. Excitingly, more disbursement is in the pipeline but we will not publicize the details until later,” he said.

In real estate, BCG Land expects its listing in the third quarter of this year, vice chairman Tuan told the meeting.

The property subsidiary is focusing investment on high-end housing and resort projects in Vietnam, including King Crown Infinity and King Crown Village in HCMC, and the vibrant mixed-use project Hoi An d’Or near Hoi An ancient town, a UNESCO heritage site in central Vietnam.

For this year’s performance, BCG set its consolidated revenue and profit after tax at VND6,924 billion ($295 million) and VND650 billion ($27.7 million), increasing by 53% and 20% compared with last year. The shareholders’ meeting approved these goals.

BCG will not pay dividends for 2022 and sets a 5% dividend payout (in shares) for 2023, also approved at the meeting.

Its net revenue in the first quarter of 2023 was VND726.5 billion (over $30.96 million), a 42.5% decrease from a year earlier.