Vietnam’s Vinh Hoan Corporation, a leading exporter of pangasius, has secured trade financing from HSBC to pursue its green transition goal.
HSBC Vietnam and Vinh Hoan signed the deal in Ho Chi Minh City on November 14, but neither revealed the credit amount to be provided.
This is the first-ever green facility that HSBC Vietnam has arranged for Vinh Hoan and the seafood sector in Vietnam. With a coastline of over 3,000 kilometres, the Southeast Asia country is home to more than 1,300 seafood species.
A priority for HSBC in Vietnam is to deal with impacts of climate change on the economy, including the seafood industry, says Ahmed Yeganeh, head of wholesale banking at HSBC Vietnam.
He says HSBC Vietnam and Vinh Hoan have had a business relationship spanning 24 years, and the company has “a clear sustainability vision” that is expected to inspire others to join the green transition.
Stringent process
Vinh Hoan and its subsidiaries have gone through HSBC’s stringent credit approval and management process to receive the short-term loan to support its working capital for sustainable seafood production.
The green facility also had to meet the high standards listed under the international Green Loan Principles, jointly issued by the Loan Market Association and the Asia Pacific Loan Market Association.
Vinh Hoan chief executive officer Nguyen Ngo Vi Tam says her company pursues a circular economy model in aquaculture production, which includes value-chain optimization, waste minimization, and value creation from by-products and substandard products.
Certifications from the Aquaculture Stewardship Council and Best Aquaculture Practices are “the catalysts backing our efforts to secure this HSBC green trade financing”, she says.
Prior to the trade facility, Vinh Hoan had started expanding its strategic partnership with Entobel, a Singapore-headquartered biotech company founded in 2013 that has been operating in Vietnam since 2015.
Offtake agreement
As part of the expansion, Vinh Hoan subsidiary Feed One kicked off an offtake agreement in February to buy a “substantial volume” of insect protein from Entobel’s new production facility in Vung Tau, which is just more than two hours by road from Ho Chi Minh City.
The Vietnamese exporter has committed to buy a minimum of 15,000 tonnes of insect protein from Entobel between 2025 and 2027 for fish farming purposes.
Entobel produces insect-based ingredients for animal feed and aquafeed. Its Vung Tau facility is one of the world’s largest insect protein production sites, and is designed to produce 10,000 tonnes of insect-based meal annually.
World Bank Group’s private sector arm IFC provided financial support for Entobel to build the facility, which is Southeast Asia’s largest insect meal plant.
Thomas Jacobs, IFC’s Hanoi-based manager for Southeast Asia, describes the factory as part of “a significant drive by the aquafeed sector to reduce the use of wild-caught fish meal in aquafeed diets and to seek more sustainable sources of protein”.
