An Giang Plant Protection Joint Stock Company (AGPPS)

An Giang Plant Protection Joint Stock Company (“the Company”) is the leading distributor and manufacturer of crop protection chemicals (CPC) in Vietnam with a 24% market share. With a nationwide distribution network of 23 branches and nearly 500 large-size wholesale agents, the Company dominates the market.

CPC distribution is the Company’s largest business segment, followed by CPC production. Distributed products are primarily imported from Syngenta, the world’s No. 1 agricultural input producer. The Company also produces and sells seeds.

The Company has benefited from rising soft commodity prices and significantly low penetration of CPC in Vietnam, compared to regional agri-product producing countries. With the leading product in the market, the Company is well-positioned to capitalize on the increasing CPC usage rate of local farmers.

Investment thesis

As the country’s largest crop protection chemicals (CPC) company, AGPPS is a major beneficiary of rising soft commodity prices and significant low penetration of CPC in Vietnam compared to regional agri-product producing countries. Higher agri-product prices are encouraging growers to increase plantings and consume more agrichemicals in order to protect the crops against pests and improve yields. Rising demand coupled with constrained supply for CPC has led to price improvements. Given its strong position in the CPC market, AGPPS is well positioned to capitalize on these strong market conditions.

Recent developments

The CPC business performed strongly in 2008, helping the Company achieve 30.8% YoY and 27.2% growth in revenue and net profit, respectively.

With its long-term strategy of becoming a major group providing complete crop solutions to Vietnamese farmers, the Company is taking steps to further consolidate its strategic partnership with Syngenta and other global CPC & seed producers, enhance technical support for farmers, expand its distribution network and strengthen its marketing and branding capabilities. Although declining farmers’ income and a lower oil price may temporarily dampen demand for CPC, the Vietnam market still holds significant potential due to the low CPC penetration compared to that of regional countries and expected price appreciation in food prices in the medium term. These market characteristics will incentivize farmers to use CPC for crop improvement.

History

An Giang Plant Protection Joint Stock Company was established in 1993 and equitised in 2004.

For more information, please visit AGPPS’s main website at www.agpps.com.vn