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Digitalisation & Technologies

Company Voices: An Phat Holdings, South East Asia

Brian Chinappi, Partner, Head of Real Estate, Actis, Hong Kong

Duong Pham, Chairman, An Phat Holdings

Established in 2002 as a manufacturer of thin film, An Phat Holdings is now one of the leading high-tech and environmentally-friendly plastic manufacturing groups in South East Asia with operations in Vietnam, the US, Singapore and Korea and sales of over US$700 million in 2022. Actis’ Head Of Real Estate, Brian Chinappi speaks to Duong Pham, Chairman of An Phat Holdings.

Brian: How has An Phat Holdings developed and which areas will be strategically important over the next five years?

Duong: Established in 2002 as a manufacturer of thin film, An Phat Holdings is now one of the leading high-tech and environmentally-friendly plastic manufacturing groups in South East Asia with operations in Vietnam, the US, Singapore and Korea and sales of over US$700 million in 2022.

We are a pioneer in sustainability. Our AnEco 100% biodegradable bags, for example, have achieved international certification and are recognised as a Vietnam national brand. Our plan is to further develop the group sustainably in plastic products and materials and in industrial real estate, where we see strong growth potential over the coming five years and beyond.

Brian: What opportunities do you see in the industrial and logistics property sector in Vietnam?

Duong: Industrial real estate is particularly attractive in Vietnam, where many large multinational companies are now establishing manufacturing bases to diversify their supply chains, take advantage of skilled labour at competitive rates, low land costs, free trade agreements, and a 6% of GDP spend on infrastructure improvements by the Vietnamese government. We also see significant opportunity in logistics real estate as the country experiences rapid economic growth, strong exports and an accelerated shift to e-commerce.

Brian: How are you integrating green initiatives in your real estate portfolio?

Duong: Sustainable development will continue to drive our growth. We entered real estate just five years ago and we have become one of the few Vietnamese companies to implement ESG initiatives in industrial parks. Our An Phat Complex, for example, benefits from solar power installation on many of its factories and a fully compliant wastewater drainage system, while we also encourage customers to adopt clean production and use clean energy. These, together with our one-stop shop for tenants that helps them obtain a variety of licences they need to operate, together with customs declarations for exports, means that we have achieved almost 100% occupancy rate. We have adopted similar approaches at our An Phat 1 industrial park project, where we have implemented solar energy and built a water-efficient waste water treatment plant.

Brian: :How has Actis supported the development of the An Phat 1 industrial park?

Duong: Since Actis invested in our company nearly two years ago, the firm has supported our business in a number of ways. With our An Phat industrial park, Actis representatives have actively participated in introducing and selecting high-quality contractors, assisting the sales department in connecting with prospective customers and supporting the management team in improving corporate governance.

Brian: What do you see as the biggest opportunities and risks for the group in 2023?

Duong: This year is likely to be challenging, given the prospect of a slowdown in the global economy, high inflation and high finance costs. Despite these headwinds, Vietnam is well placed to benefit from supply chain diversification, in particular as the government has taken effective steps to stabilise inflation and exchange rates. We see strong momentum as industrial real estate demand will continue to grow and as industrial land and rental prices in the country’s Northern Key Economic Zone (which encompasses seven cities and provinces, including Hanoi) rise in the face of land supply constraints, to complement the already relatively high prices in the Southern Key Economic Zone.

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