Mar 29, 2012

Vietnam - Vietnam coffee companies facing big debt problems


Many coffee exporters are facing big debts but they still are hiding the debts for fear that it would affect business, Nguoi Lao Dong newspaper reported.

The newspaper reporter on March 26 came to the headquarter of Tay Nguyen Coffee Investment Import Export Joint Stock Co (Vinacafe Buon Me Thuot). Despite March 26 was Monday, all leaders were absent and the landscape was quite deserted.

Financial difficulties

Vinacafe Buon Me Thuot used to be awarded to be the world’s largest coffee exporting company but its overdue debt is more than 1.6 trillion dong now.

In a phone talk with Nguoi Lao Dong newspaper, Mr Vu Duc Tien—General Director of Vinacafe Buon Me Thuot admitted that enterprises are struggling a lot of business hardships so coffee purchase cannot meet the requirements. “If selling whole assets of the company, debt repayment may be done”, he said.

A source of Nguoi Lao Dong said that some shareholders of Vinacafe Buon Me Thuot requested the firm’s leaders to provide statistics of loss and profit but the request has not been fulfilled. According to Dak Lak Department of Industry and Trade, currently, domestic coffee companies are facing the financial difficulties due to high bank loan rates and low competitive strength compared with foreign invested firms.

Major export item of Dak Lak province is coffee. In the first three months of 2012, the province’s total export turnover gained US$180 million, down 10% on year and achieved 22.85% of the year’s plan.

Hard to survive

By the end of 2009, Dak Lak had 43 bankrupt enterprises and business households who could not pay 300 billion dong and 3,000 tons of coffee.

Typical case is Truc Tam Trading Co Ltd (Buon Ho Township, Dak Lak). The company’s owner is the husband-wife couple Dinh Ngoc Truc and Truong Thi Tam escaped to the foreign country with hundreds of billions of dong of banks and people. INEXIM Investment Export and Import Joint Stock Co also suffered the similar debt.

Mr Nguyen Xuan Huong—Head of Ea H’leo District Infrastructure Economic Department was quoted as saying that 10 firms in the district became bankrupt with total debt of around 100 billion dong, leading to larger number of people losing assets and facing stockpiled debts.

According to Dak Lak provincial People’s Committee, because two sides [coffee companies and farmers] did not sign deposit contracts or other papers ruling on duties and responsibilities so seeking clues for fraud cases became difficult.

Some coffee firms made use of gaps in rules to cheat people. Mr Nguyen Tuan Ha, Vice Director of Dak Lak Department of Industry and Trade proposed the people’s committee to have specific regulations on coffee deposit operation.

VietBiz24



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