“Pepper king” Phuc Sinh holds 8% of world market share

Phuc Sinh Group has become a major pepper exporter from a small Vietnamese start-up to hold 8% of the global market share after more than two decades of development.

Mentioning Phuc Sinh, people immediately think of its chairman Phan Minh Thong, dubbed Vietnam's “pepper king”.

In 2001, the Ministry of Industry and Trade canceled the application of export licenses, removing mechanism bottlenecks for traders. Seizing this opportunity, Thong, who was born in 1975, decided to start his business by establishing Phuc Sinh International Co., Ltd that year.

Success following the start helped him obtain enough capital to invest in processing factories. In 2004, the company's first factory Vietspices was set up in southern Vietnam’s Binh Duong province on an initial area of 0.8 hectares, which was expanded to 6 hectares 10 years later.

Since then, the firm's ecosystem has been continuously expanded with the birth of a series of member companies like Vietspices Corporation (founded in 2005), Phuc Sinh Coffee Corporation (in 2009), Phuc Sinh Dak Lak Corporation (in 2014), and Phuc Sinh Son La Corporation (2017).

The establishment of Phuc Sinh Coffee, Phuc Sinh Dak Lak and Phuc Sinh Son La was part of the company's strategy of joining the coffee trade.

Phuc Sinh Dak Lak is known as the investor of a pepper and coffee factory producing 10 tons of green pepper and 75 tons of green coffee per month in the Central Highlands province. Meanwhile, Phuc Sinh Son La owns a 45-hectare factory with an annual capacity of 20,000 tons of fresh coffee. Located in the northwestern province of Son La, the over VND100 billion ($4.25 million) factory became operational in November 2018.

Phuc Sinh even has the ambition to expand its influence in the country with the K Coffee system - managed by its member Phuc Sinh Consumer Corporation established in January 2017. Currently, the K Coffee system has six branches, including K Coffee Vo Van Kiet, K Coffee Hai Phong, K Coffee Nguyen Thai Binh, K Coffee Phu My Hung, K Coffee Phan Xich Long, and K Coffee Hai Ba Trung.

Phuc Sinh has been actively seeking strategic partners as agents, distributors, and franchisers.

The formation and development of Phuc Sinh have been associated with the image of its founder Thong, who holds the positions of board chairman and legal representative - the nucleus of the whole group. He is a major shareholder of Phuc Sinh, holding 70% of Phuc Sinh’s charter capital, which reached VND369 billion ($15.7 million) as of November 2018.

He is also the dominant shareholder in many enterprises in his company's ecosystem, owing a 75% stake in Phuc Sinh Son La, 98% in Phuc Sinh Dak Lak, 98% in Phuc Sinh Coffee, and 80% in Phuc Sinh Consumer.

In 2021, parent company Phuc Sinh posted VND3.87 trillion ($164.6 million) in net revenue and VND15.6 billion ($663,645) in net profit, respective year-on-year increases of 4.6% and 88%.

The profit was quite modest compared to its equity of VND408.3 billion ($13.37 million) and total assets of VND1.77 trillion ($75.3 million). As a result, the return on equity and return on assets of Phuc Sinh hit only 3.8% and 0.88%, respectively.

However, in the context of 2021 when a series of businesses had to close and reduce capacity because of Covid-19, this was quite a positive result. In addition, this was also the highest after-tax profit earned by Phuc Sinh in the 2019-2021 period.

Previously, the group recorded a net profit of VND8.3 billion ($353,400) in 2020 and VND4.8 billion ($202,400) in 2019.