HAGL, a Vietnamese company, has embarked on an exciting journey, transitioning from one business sector to another in search of success. This dynamic company has boldly ventured into various industries, seeking to establish a foothold in each. The company’s recent trajectory has led them to a unique approach: raising pigs that eat bananas. This unusual strategy aims to generate revenue and attract customers with a distinctive product. HAGL plans to launch a network of around 1,000 stores, with a significant 80% of them being franchise locations.
Navigating Economic Storms and Shifting Focus
Following the global financial crisis of 2008, Vietnam’s real estate market faced turbulent times. HAGL’s chairman, Doan Nguyen Duc, made a decisive move: he shifted the company’s focus away from real estate and towards rubber plantations. This bold decision marked a significant change in the company’s direction.
Before this pivotal shift, HAGL’s revenue primarily came from real estate, construction, and mineral sales. These sectors contributed a substantial 83% of total revenue in 2012. Despite their solid performance, HAGL sought new avenues for growth.
Exploring Agricultural Ventures
HAGL’s foray into agriculture began in 2012 with a substantial investment of $100 million in sugarcane cultivation and a rapid expansion of rubber plantations. This move significantly altered the company’s revenue stream. By 2014, agricultural products, including sugar, corn, and rubber, generated $64 million, accounting for 48% of HAGL’s total revenue.
HAGL ventured into the livestock industry in 2014, focusing on cow-raising operations across Vietnam, Laos, and Cambodia. This new venture proved successful, as cow-raising generated $150.6 million in revenue by 2016, representing a significant 54% of the company’s total income. In contrast, the revenue from sugarcane, corn, and rubber dropped to $31.2 million, accounting for only 11% of total revenue.
Fruitful Ventures and the Rise of Bananas
As revenue from cow-raising began to decline, HAGL’s chairman, Duc, envisioned a future based on fruit trees, particularly passion fruit, red dragon fruit, and bananas. This shift into fruit cultivation reflected a belief in the potential of these crops to boost the company’s financial success.
HAGL’s focus on fruit trees paid off. In 2018, revenue from fruit sales reached $126 million, making up 53.8% of the company’s total revenue. The revenue from cow-raising dropped significantly to $5.5 million, equaling a mere 2% of total revenue. This marked a clear shift in the company’s success story.
In 2020, HAGL’s revenue from fruit sales reached $99.26 million, contributing 71.9% of total revenue, although it represented a decline of 21.2% compared to 2018. The revenue from cow-raising was not reported for this year.
A New Chapter: The Banana-Eating Pig
HAGL’s journey continued with a surprising twist. The company shifted its focus to raising pigs, a decision driven by the belief that this venture would bring a new chapter of success. The company’s leader, Duc, discovered a unique approach to pig farming: feeding them bananas. He believes this unconventional method accelerates the pigs’ growth, creating a unique selling proposition.
In the first six months of the current year, HAGL’s revenue structure showed a shift. Pig sales contributed $19.7 million, representing 22.3% of total revenue, while fruit sales decreased to $45 million, equaling 51% of total revenue. This reflects a clear shift in the company’s priorities.
Challenges and Future Prospects
Despite its innovative endeavors, HAGL faces significant challenges. As of June 30, the company’s equity stands at a mere $5.1 million, representing a tiny 0.61% of its total assets. Moreover, the company’s debt obligations are substantial, reaching $392 million, which accounts for 46.8% of its total capital.
HAGL’s core business line has yet to generate a profit. The company incurred a loss of $5.9 million in the first half of this year. This follows losses of $76.6 million in 2020 and $27.8 million in 2021. These financial figures highlight the challenges HAGL faces in its quest for profitability.
HAGL’s journey demonstrates the company’s resilience and adaptability. It has transitioned from real estate to agriculture and now to pig farming, constantly seeking new avenues for growth. The company’s innovative approach to pig raising, utilizing bananas, reflects its willingness to explore unconventional methods. However, HAGL’s financial performance and high debt levels present significant challenges. The company’s future success will depend on its ability to overcome these obstacles and generate sustainable profits.
