Chu Lai Soda causes grief even after suspension

13:48 | 04/04/2018
One year after Chu Lai Soda Processing JSC (Chu Lai Soda) suspended its operations, former employees are still looking for work and banks are still out to collect debts worth VND2 trillion ($88.1 million).
chu lai soda causes grief even after suspension
Chu Lai Soda’s suspension leaves numerous implications

At the first-quarter press conference organised by the Quang Nam People’s Committee on March 29, Pham An, deputy head of the Chu Lai Open Economic Zone Management Board, stated that nearly 400 workers of Chu Lai Soda have yet to find new jobs and the firm still owes an average of one or two months of salary to each worker.

Besides, banks, including state-owned Bank for Agriculture and Rural Development (Agribank), are worried that the firm’s VND2 trillion ($88.1 million) debt that it took up to develop the factory will not be repaid.

In 2010, Chu Lai Soda’s 200-tonne soda processing factory was welcomed as the country was importing millions of tonnes of soda every year.

Ha Thach, director of Agribank’s Quang Nam branch, stated that the bank has been trying to co-operate with the investor to resume the factory’s operations with little success, making it difficult to recover the banks’ VND2 trillion ($88.1 million).

The central province of Quang Nam, where Chu Lai Soda intended to develop the factory, was lured in by the company’s promise to generate jobs for 400 local workers and pay VND60 billion a year to the provincial budget once the factory comes into operation.

In addition, banks located in the province, including Agribank, which decided to provide a loan of VND1.6 trillion ($70.48 million), and another bank, which gave VND400 billion ($17.6 million), to Chu Lai Soda.

As a result, in April 2010, the construction of the Chu Lai Soda processing factory was kicked off on an area of 60 hectares at Chu Lai Open Economic Zone with the investment capital of VND2.3 trillion ($101.3 million), VND2 trillion ($88.1 million) of which came from loans. The factory was expected to start operations after two years of construction.

In June 2015, after five years of delay in construction, the factory came into pilot operation. However, after a short time, hundreds of nearby households complained that their daily lives were affected by environmental pollution caused by the factory.

After clarifying the firm’s violations in discharging untreated wastewater, the local authorities issued a fine of VND730 million ($32.2 million) to the factory. Simultaneously, the company had to suspend its operations until it installed wastewater and solid waste treatment facilities.

However, in June 2016, local residents protested Chu Lai Soda’s relapse into discharging untreated wastewater into the local river. Tempers ran so high that residents threatened to take matters into their hands and block the company’s wastewater pipes.

Due to its relapse and delays in paying the fine, the authorities asked the factory to suspend its operations from August 2016.

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