Thursday, May 7, 2015

VIETNAM: Cement producer Ha Tien 1 in talks with US investors

The chief executive of Vietnam’s cement producer Ha Tien 1 Cement JSC, Nguyen Tuan Anh, is in talks with US-based global investors, for additional investment.

This was announced on Thursday by a Decker & Co document that DEAL STREET ASIA acquired. Decker & Co is an institutional broker specialising in Southeast Asia and the Asian frontier markets, which is the host agency for Ha Tien 1 Cement chief executive’s US visit, this week.

The CEO will discuss the company, its growth strategy, the increasing consumer demand for its products, given the increased construction and infrastructure development activity in southern Vietnam.

Anh will be visiting New York, Chicago, San Diego, Newport Beach, San Francisco and cities in Florida to talk to the investor. This visit marks Vietnamese manufacturer’s first trip to the US, to find investors.

In its first quarter earnings release, Ha Tien 1 Cement reported a 10 per cent sales volume beat for the quarter. Anh expects the general supply/demand environment for cement to improve, which should help margins.

With a 30 per cent market share, Ha Tien 1 Cement is the market leader in the south of Vietnam, where the country’s economic activity is highest. In the southern area, Ha Tien 1 Cement is the only self-sufficient in the production of clinker in its category. The Ho Chi Minh City-based firm is the producer of the well-known Vicem brand.

In March, Saigon Securities Inc revealed that Ha Tien 1 Cement was negotiating with an Indonesian partner to import coal, which accounts for some 30-40 per cent of cement and clinker production costs.

At present, the company’s capacity utilisation is about 70 per cent, giving it room to grow over the medium-term without additional investments. Ha Tien 1 Cement has a three-year plan to pare down debt to achieve a sustainable debt-to-equity ratio of approximately 60 per cent.

In 2014, the company’s profit after tax soared more than 120 times over 2013 to reached VND304.93 billion ($14.1 million).

The company’s stock, coded as HT1 on the Ho Chi Minh City Stock Exchange, rose 1.4 per cent on Thursday trade to VND21,200 per share. It has been steadily increasing over the past two years.

“Economic growth in Vietnam has captured the attention of institutional investors around the world. Many investors are especially interested in meeting management teams face to face,” said Mark Decker, founder and president of Decker & Co.

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