Vietnam’s state-backed Becamex to set aside 2.5 trillion dong to fund Singapore JVs

VSIP’s new industrial parks across Vietnam will be developed according to low-carbon standards, while the other two ventures will focus on harnessing rooftop solar power and distributing clean energy to factories. PHOTO: VIETNAM SINGAPORE INDUSTRIAL PARK

The funds are part of a planned S$1 billion share sale, as Becamex IDC deepens its long-running pact with Singapore’s Sembcorp Industries

Vietnam’s state-backed industrial and urban infrastructure developer Becamex IDC is planning to set aside 2.5 trillion dong (S$130 million) to invest in joint ventures with Singapore’s Sembcorp Industries: U96 0%.

The move is part of a planned S$1 billion share sale and underpins both companies’ long-standing partnership.

According to its Feb 6 prospectus, the funds will go into three shared entities: Vietnam-Singapore Industrial Park (VSIP), Vietnam-Singapore Smart Energy Solutions, and Becamex-VSIP Power.

“We remain steadfast in pioneering new industrial park development models in Vietnam, and the next emphasis would be on sustainability practices amid surging demand from tenants,” Nguyen The Duy, deputy chief executive of Becamex IDC, told The Business Times.

VSIP’s new industrial parks across Vietnam will be developed according to low-carbon standards, while the other two ventures will focus on harnessing rooftop solar power and distributing clean energy to factories.

Becamex’s fundraising exercise involves a share issuance worth 20.88 trillion dong on the Ho Chi Minh City Stock Exchange. The public auction is scheduled for Apr 28, with newly raised proceeds to be invested on the Vietnamese giant’s network of industrial parks, as well as to restructure debt and for working capital purposes.

While foreign ownership in Becamex is capped at 34 per cent, its foreign shareholding currently stands at around 2 per cent.

Multi-year growth driver

In 2024, Becamex recorded revenue of 5.2 trillion dong, down 36 per cent year on year, mainly due to a high base in 2023 that included a major land deal in the final quarter, its financial reports indicated.

Net profit after tax for the year was up 1 per cent at 2.3 trillion dong, with the contribution from associates and joint ventures, especially VSIP, rising by 145 per cent year on year to 1.96 trillion dong.

Duy said that Becamex aims to treble its 2024 sales to hit 15 trillion dong by the end of 2027, with 23.5 per cent coming from affiliate companies including VSIP.

“This goal is driven by our strategic land reserve preparations and the potential growth from new eco-industrial parks, along with Becamex’s ecosystem expansion into areas beyond industrial property development,” he added, pointing to other projects in education, healthcare, telecommunications and solar energy.

As at the end of 2024, Becamex owned a substantial land bank comprising 5,600 hectares (ha) of remaining leasable industrial park land and 1,200 ha of a remaining saleable urban area.

The firm also plans to sell 380 ha of industrial land this year, an increase of 100 ha compared to the 2024 level.

“Strategical land reserves are set to drive the multi-year growth trajectory of Becamex,” noted analysts at Vietcap Securities in a recent analysis.

Over the past years, Vietnam has become one of the biggest beneficiaries of the global supply chain shifts away from China, attracting multinational companies to acquire land or ready-built facilities for manufacturing in the South-east Asian country.

Vietnam’s disbursed foreign direct investment (FDI) hit a record US$25.35 billion in 2024, up 9.4 per cent, while FDI pledges in the first two months of 2025 jumped 35.5 per cent to US$6.9 billion, driven largely by manufacturing.

Key profit generator

VSIP was established in 1996 on the basis of cooperation between the Vietnam and Singapore governments. Becamex and Sembcorp have led the joint venture to become the largest industrial park developer in Vietnam, with 12 operational VSIPs and eight others under development across 14 provinces, covering a total land area of nearly 12,000 ha.

It has also drawn more than US$23 billion in foreign investment and around 1,000 tenants, including Danish toymaker Lego and jewellery maker Pandora, US consumer goods giant Procter & Gamble, Japan’s top mobile phone producer Nokia, and US food and drink maker PepsiCo.

“VSIP is expected to continue to be a key growth driver for Becamex in 2025,” Pham Thai Thanh Truc, an analyst at ACB Securities, wrote in a recent note, estimating that VSIP’s earnings could account for around 30 per cent of Becamex’s net income this year.

She added that the share sale could help ease Becamex’s rising leverage, with debt levels and gearing ratios having increased in recent years.

Similarly, analysts at Vietcap Securities expect Becamex’s affiliate income to grow 17 to 18 per cent year on year over the next two years, supported by profit gains from both VSIP and BW Industrial, in which Becamex holds a 24 per cent stake.

BW Industrial has around 4.5 million square metres of ground floor area of ready-built factories and warehouses, along with more than 1,000 ha of land bank, providing a broad range of solutions for manufacturers seeking to set up production at various industrial parks in Vietnam.

From 2020 to 2024, net income from affiliates accounted for nearly two-thirds of Becamex’s net profit on average.

“If the legal corridor supports the listing of FDI companies, VSIP can plan for its initial public offering in the coming years,” Truc added.

State stake trimmed

Under the share sale, Becamex will offer 300 million shares – 29 per cent of its outstanding stock – at 69,600 dong each, about 10 per cent below its Mar 25 closing price.

“If successful, it would also serve as a case study for other state-owned enterprises to seek public offerings as a fundraising channel to fuel growth,” Duy added.

The People’s Committee of Binh Duong Province holds a 95.44 per cent stake in Becamex. It is set to reduce its ownership to as low as 74 per cent if the offering is fully subscribed.

Becamex first offered shares in December 2017 and continued with a public auction in January 2018, aiming to divest state stakes without raising new funds. Investor response then was weak, with less than 4 per cent of shares taken up.

“If the divestment plan is prolonged, it could pose risks to the development progress of Becamex’s upcoming projects,” said Vietcap analysts, emphasising the pressing need for fresh capital to support the firm’s large-scale projects and its relatively high leverage compared to its peers.

Source: businesstimes.com.sg