IFC investment of approximately $20 million in CVS JSC, a subsidiary of Son Kim Retail Corporation (SonKim Retail), will contribute to the expansion of GS25 Vietnam's retail network. GS25 Vietnam is a prominent convenience store operator in the country.
Furthermore, IFC is collaborating with Sumitomo Mitsui Banking Corporation (SMBC), a top Japanese financial conglomerate, to facilitate a $40 million commodity-backed warehouse finance facility for Thanh Thanh Cong - Bien Hoa JSC (TTC AgriS), a significant local agricultural enterprise.
By enhancing access to modern retail, this funding will enable GS25 Vietnam to establish over 500 new convenience stores nationwide by 2025. The expansion of the network is anticipated to generate up to 6,000 direct jobs (with more than 60 per cent held by women) and create thousands of indirect employment opportunities. Additionally, the company will increase its supply of locally produced food.
James Michael Kershek, CEO of SonKim Retail, expressed enthusiasm about collaborating with IFC to provide the people of Vietnam with enhanced shopping options delivered conveniently and in a fair, fresh, and friendly manner.
SonKim Retail is strongly committed to championing environmental, social, and governance (ESG) best practices through its diverse and rapidly growing workforce, safe and sustainable food offerings, and management decision-making processes. These shared values and objectives position SonKim Retail favourably within Vietnam's rapidly expanding retail sector.
GS25 Vietnam, based in Ho Chi Minh City, aims to cater to the evolving preferences of an urban clientele seeking safe and dependable ready-to-cook meals. The convenience store operator plans to diversify its product range, with a particular focus on providing high-quality fresh food offerings. IFC will provide guidance to GS25 Vietnam in improving its in-store food safety practices and reducing food loss and waste, thereby supporting its efforts.
For TTC AgriS, this collaboration represents its initial receipt of a commodity-backed warehouse finance loan from IFC and SMBC. The facility, processed under IFC's Global Warehouse Finance Programme (GWFP), will specifically contribute to the growth of the nascent warehouse financing market in Vietnam. This funding will also encourage local banks to participate in the agribusiness value chain, optimising agricultural financing opportunities in this sector with immense potential.
Dang Huynh Uc My, vice chairwoman of TTC AgriS, emphasised that the facility will allow the company to obtain loans using raw materials as collateral. This increased working capital will enhance TTC AgriS' flexibility in procuring, storing, and distributing materials and goods, leading to a more efficient system.
“TTC AgriS considers cooperation with IFC and SMBC as vital to its circular economy development strategy, aligned with its goal of transforming into an integrated economic business model. This transformation will solidify its position as a comprehensive agriculture solutions provider in Vietnam and the region,” My said.
The GWFP aims to expand working capital financing available to agricultural producers or traders by leveraging their commodities stored in warehouses. To date, the GWFP has supported global trade worth over $10 billion.
Thomas Jacobs, IFC country manager for Vietnam, Cambodia, and Lao PDR, explained that agribusiness is a priority for IFC due to its potential for significant development impacts and its crucial role in poverty reduction.
With Vietnam experiencing robust economic growth, an emerging middle class, and increasing demand for improved hygiene and food safety, both investments will contribute to providing consumers with a wider range of superior products and services. These investments will also support local producers, facilitate commodity trade flows, and enhance the resilience of Vietnam's agribusiness value chain, thereby generating much-needed employment opportunities and improving livelihoods.
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