Introduction
We are pleased to present an investment in a company (tentative name: BAAP) that manufactures and exports wooden products in south-central Vietnam. The company has a vision to maximize the value of acacia, and manufactures and sells products such as wood pellets, wood chips, and wooden furniture from acacia. The company exports wood pellets to Japan, and BAAP is looking for an investor with extensive experience and strong financial resources in the manufacture and sale of wood products to expand the plant’s production capacity and increase exports. If you are interested in investing in BAAP after reading this report, we would be happy to hear from you.
Introduction to the Sold Company
BAAP was founded in 2017. The company’s primary business is the production and sale of wooden products made from acacia. The main export markets are Japan and Europe. The majority of the acacia raw material is sourced from wood processing companies and transported to factories in the province for the production of wood pellets, wood chips and wooden furniture.
Domestic clients include fuel companies and trading companies. Trading companies are importers and exporters of wood pellets and wood chips. Wooden furniture is exported to European countries such as Germany, France, Belgium, Spain, Olander, and Poland, while wood pellets are exported to Japan from 2022.
| 社名 | BAAP 有限責任会社 |
| 設立 | 2017 |
| 事業内容 | 木質ペレット、木質チップ、木製家具の製造と販売 |
| 本社所在地 | ベトナムの中南部 |
| 工場所在地 | 同省 |
| 売上高 | 308 billion VND (約170億円）(2022) |
| 従業員数 | 200~300 |
| 株主構成 | 6名 |
| 譲渡比率 | 40%（応相談） |
| 調達資金 | 応相談 |
| 譲渡形式 | ①資本譲渡、又は②エクスロー、又は③一部前払い |
Production plant
BAAP’s factory is located in the province. The total area of the plant is 6 ha, of which 4 ha is expanded area. The wood pellets production equipment is of European manufacture and therefore complies with strict standards.
◎Production capacity of wood pellets
・Designed production capacity: 10,000 tons per month (wood pellets)
・Actual production capacity: 4,000 tons per month (wood pellets)
◎Production capacity of facilities
・Dryer: 10 tons/h/unit
・Granulator: 5 tons/h/unit
The actual production capacity is planned to be expanded to 10,000 tons per month through capital investment.
FSC certification
BAAP is FSC certified in 2019 for the export of wood pellets, valid until 2024.
Port of transport
BAAP’s plant is located near a port, which is convenient for exporting wood pellets. Usually wood pellets are shipped from two ports.
・Port A in the province: 15 km from the factory to the port
・Port B in the neighboring province: 20 km from the factory to the port
Points of appeal of the sale project
In light of BAAP’s competitive advantage, the following are some of the company’s strengths.
FSC-owned procurement sources
All wood pellets and wood chips are made from Acacia and are sourced from wood processing companies in the province and neighboring provinces. Sources are carefully selected and all are FSC certified. Although the company procures from planted forests, the percentage is not small. This is because they are limited to FSC certified suppliers. The distance from the suppliers to the factory is about 40~50 km, which contributes to the reduction of transportation costs.
Export results to Japan
BAAP has exported to Japanese trading and manufacturing companies.
・Export 10,000 tons of wood pellets to Japanese trading companies in 2022
・Export 50,000 tons of wood pellets per year starting in 2024 by signing a 10-year long-term contract with a Japanese manufacturing company
Expectations of investors
BAAP expects to raise funds and form strategic partnerships with potential investors. Funds raised will be used to expand the plant’s production capacity to achieve its designed capacity of 120,000 tons per year. The strategic partnership is looking for investors to secure stable and long-term order volumes.
We are willing to discuss with you the possibility of investing in the wood pellets business only, but we are willing to reserve to the company the right to make decisions in the raw material procurement and production activities.
Synergy effects
Expected synergies from the investment in BAAP include the procurement of inexpensive wood pellets as fuel overseas, the establishment of a stable supply chain, and capital gains from the investment.
Wood Pellet Market Development in Vietnam
In 2021, Vietnam exported 3.5 million tons of wood pellets worth over $412.98 million. Compared to the previous year, the export volume and value increased by 9.2% and 17.3%, respectively. Wood pellets account for about 3% of the total export value of Vietnam’s wood industry, and the demand for wood pellets as a renewable energy source has surged since participating countries pledged to reduce greenhouse gas emissions at COP26, making Vietnam the second largest wood pellet exporter in the world after the United States.
Japan and South Korea are the major exporting countries of wood pellets, and in 2021 Vietnam exported 1.96 million tons of wood pellets to South Korea, equivalent to US$212.04 million. Compared to the previous year, export volume decreased by 0.9%, but export value increased by 9.6%. The Korean market accounted for 56% of total exports and 51.3% of total export value.
We also exported 1.53 million tons to Japan in 2021, equivalent to $200.11 million. Compared to the previous year, export volume and value increased by 26.1% and 27%, respectively. Unit selling prices in the Japanese market ranged from $140 to $145 per ton. The Japanese market accounted for 43.8% of total exports and 48.5% of total export value.
Energy restrictions and high oil prices due to the conflict between Ukraine and Russia have led to a surge in demand for wood pellets as fuel for heaters in Europe. Over the next five years, European demand for wood pellets is expected to increase by 30% to 40%, importing approximately 10 million tons, and potential export markets.
Contact Us
For more information on this matter, please contact VietBiz or its operator ONE-VALUE Co.
ONE-VALUE INC.
contact@onevalue.jp
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