PM Thoresen Asia Holdings Public Company Limited (“PMTA” or “the Company”) was established on 7 June 2014 and was traded in the Stock Exchange of Thailand since 6 May 2015. PMTA is a subsidiary of Thoresen Thai Agencies Public Company Limited (“TTA”). PMTA is a holding company that has a policy to invest in well-performed companies of which business is related to the Company’s business in order to reinforce the strength of its core business through investment.
The Company however may invest in any other business considered appropriate. The Company currently owns 100% of Baconco Company Limited (“Baconco”) that operates the agrochemical business and factory area management services in Vietnam. Also, the Company owns 100% of PM Thoresen Asia (Singapore) Pte. Ltd. (“PMTS”) that was incorporated to handle the raw material procurement to support Baconco’s agrochemical business.
Core Businesses
1. Agrochemicals
Baconco Company Limited, headquartered in the Phu My I Industrial Park in the Ba Ria Vung Tau area, about 70 kilometers from Ho Chi Minh City, is PMTA’s main investment in this sector. Baconco manufactures and supplies NPK compound, compound and single fertilizers and foliar for domestic and international customers, as well as pesticides and insecticides for use exclusively in Vietnam.
Fertilizer products are sold under the “STORK” brand name, which has an excellent reputation among the firm’s customers. Presently enjoying a 25 percent market share, operating a strong network of 130 Vietnamese wholesalers and ten international dealers, Baconco exports fertilizer products to 32 countries with a particularly solid customer base in the fast-growing ASEAN and African markets.
Baconco's STORK fertilizer trademark, registered in Vietnam in 2005
The agricultural sector is a major factor powering Vietnam’s high-growth economy. The country is actively preparing for the economic expansion, trade liberalization and labor movements planned within the ASEAN Economic Community, all of which will certainly increase demand for agricultural products. To ensure sufficient production capacity to meet future demand, Baconco opened a completely new 100,000-metric ton granulation production facility in 2014, bringing the company’s total annual production capacity to 450,000 metric tons, and making it the single largest producer in Vietnam.
Industry analysts estimate total annual consumption of fertilizer products to be about ten million metric tons presently, with modest increases over the next two to three years. Baconco is ideally placed to meet this demand, enjoying promising long-term growth prospects. With its increase in production capacity, Baconco should enjoy a high return on equity, providing solid investment returns for PMTA.
2. Warehousing
The Phu My I Industrial Park is one of Vietnam’s key export centers in the country’s booming southern part, supporting continuous demand for storage and warehousing facilities. To maximize returns from presently underutilized factory and warehouse capacity, Baconco is leasing that space to a variety of tenants that include its own fertilizer wholesalers, bottlers, raw-material importers and steel-pipe manufacturers.
Bacono presently operates three world-class warehouses (BCC I, BCC III and BCC V), offering an accumulated space of 31,800 square meters.
Each of these structures was constructed for long-term use, with floors capable of supporting loads of up to ten metric tones per square meter. The design is highly flexible and can be segmented to support each individual customer’s unique requirement. A suite of value-added services, including offices for supervisory personnel, commercial vehicle parking, guards, and utilities, is also available.
At present, tenants include Bacono’s fertilizer wholesalers, bottlers, raw material importers and manufacturers of steel pipe.
- BCC I and BCC III are for raw-material storage, accumulation of finished products prior to shipment, and storage of parts and pieces supporting Baconco’s fertilizer business
- Baconco V (BCC V) was built specifically for warehousing lease where 75% of the lease are long-term (2+1 years) contracts and the remaining 25% re short-term.
Current projections indicate continued strong demand for professional warehouse and logistics services in the near and mid-term, which cannot be fully met with existing facilities. Responding to this, Baconco has begun construction of a purpose-built storage facility, Baconco V-B, which will offer 50,000 square meters of customizable, high-strength floor space.
Because Baconco cannot directly serve retail customers due to restrictions in Vietnam’s foreign-investment regulatory environment, it signed an agreement in 2010 to lease warehouse space to Thoresen-Vinama Agencies Co., Ltd. (TVA). TVA holds a valid logistics business license and can therefore sublet the space it rents to retailers.
Although the warehouse leasing operation is not really a core business for Baconco, it does support the company’s agrochemical logistics management activity, helps reduce concentration risk, provides a buffer against unexpected conditions and represents reserve capacity which can be quickly pressed into service if demand for fertilizer products should grow beyond expectation.
3. Raw Material Procurement Services
PM Thoresen Asia (Singapore) Pte Ltd (PMTA SG), a wholly owned subsidiary of PMTA, was incorporated in Singapore on November 12, 2013. It principally functions as an offshore procurement organization for Baconco, providing purchasing services mainly for macronutrient products, including nitrogen (N), phosphate (P2O5) and potash (K2O).