Dutch fund &Green invests $25 mln in Vietnam pepper king Phuc Sinh

Dutch investment fund &Green has invested $25 million in Phuc Sinh JSC, a major Vietnamese pepper and coffee exporter, in the form of a long-term loan.

The deal was announced by Phuc Sinh JSC at a capital funding ceremony held in Ho Chi Minh City on Thursday.

Chairman Phan Minh Thong said the company has attracted interest from various investment funds since 2013, but the investors were mainly in the consumer and F&B industries and did not have much experience evaluating agricultural production companies in general and Phuc Sinh in particular. "Therefore, their valuation of the company was low."

Eventually, it chose to partner with &Green, based on shared values and common aims.

&Green, an investment fund focused on eliminating deforestation from tropical commodity production, will use the financing to support Phuc Sinh in transforming its agricultural practices toward deforestation-free, sustainable coffee value chains. As a sustainability-linked investment, &Green's due diligence process thoroughly examines environmental and social risks in addition to financial and legal considerations.

Natalia Pasishnyk, sustainability director at &Green, explained that the fund chose Phuc Sinh due to its strong commitment to sustainable development, enthusiastic leadership, and financial transparency. After just one month of research, &Green decided to invest $25 million in Phuc Sinh, she said.

Thong said that a key factor in the partnership was Phuc Sinh's extensive experience in ESG (environmental, social, and governance) investments. Since 2010, the company has invested $800 million in hiring ESG experts to advance sustainable development.

Phuc Sinh’s purchasing partners wanted to have 50% of their products meet ESG standards, making sustainability crucial for the company’s sales. Despite challenges in the initial two years, Phuc Sinh achieved notable milestones, including becoming one of the first Vietnamese companies to receive the Rainforest Alliance certification in 2014.

With the latest investment from &Green, Phuc Sinh will significantly advance its sustainable development strategy. The funds will be used to enhance product quality and ensure that Phuc Sinh's production processes contribute to environmental protection and community support, Thong said.

Phuc Sinh is particularly committed to advancing Vietnam's coffee industry by establishing traceable, deforestation-free supply chains. The company plans to invest in a new coffee factory in Dak Nong this year to support its global expansion and promote sustainably produced Vietnamese coffee.

Phuc Sinh, established in 2001, initially served customers in France, Germany, Italy, Switzerland, and the United States. Today, its customer base spans Asia, Europe, Africa, the Americas and Australia. Since 2007, Phuc Sinh has been Vietnam's leading pepper exporter, holding an 8% share of the global market.

&Green fund is a debt fund managed by SAIL Investments, a Netherlands based global sustainable investment manager, investing in corporates globally that can demonstrate the decoupling of commodity production from deforestation and protect biodiversity while being socially inclusive.

The fund is focused on tropical forest jurisdictions that have progressive protection strategies and targets in place. It targets commodity sectors that are driving deforestation, such as palm oil, soy, animal protein, and forestry.