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Vinacafe Buon Ma Thuot was a leading coffee exporter in Central Highlands’ Dak Lak province in 2010-2011 coffee season raking in $189 million from exporting more than 93,000 tonnes of coffee beans.
However, the firm owes VND1,600 billion ($76.2 million) to eight local banks and is a defendant in a dispute involving 18,000 tonnes of coffee beans and faces paying millions of US dollars if it fails.
Meanwhile, its total asset value was more than VND1,200 billion ($57.1 million).
Another coffee giant in the region Inexim Dak Lak is in the same position with debts reaching VND350 billion ($16.6 million).
After shifting into a shareholding company in 2007, the company doubled its chartered capital to VND70 billion ($3.3 million) and was the first business in the Central Highlands to join futures market trade with annual revenue of VND1,000 billion ($47.6 million).
The company, however, continually had losses several years later and by April 2011, its accrued losses surpassed VND80 billion ($38 million) and its owner’s capital dropped to just VND3.6 billion ($170,000). Meanwhile, its debts came to VND365 billion ($17.3 million) which is tantamount to 99 per cent of its total asset value.
Truc Tam Company Limited, also based in Dak Lak province, shut up operations in 2011 and its director absconded abroad leaving behind big debts amounting to several million US dollars.
In Lam Dong province, Vinacafe Dalat was uncovered by Ministry of Agriculture and Rural Development ombudsmen to have VND99 billion ($47.1 million) in losses.
Economic experts assumed Central Highlands’ coffee trading giant current woes had been earlier forecasted. Amid a hostile business climate Vinacafe Buon Ma Thuot spent VND300 billion ($14.2 million) on building a general bonded warehouse over 175,000 square metres in Dak Lak province’s Hoa Phu Industrial Park. The project was finalised in mid 2011 but the General Department of Customs in the recent past terminated its operation since it was yet operational six months after construction was completed.
Similarly, Vinacafe Dalat pumped money into building a coffee processing plant with 100,000 tonnes annual capacity while its actual capacity is just more than half of that at 60,000 tonnes per year.
Besides, Dak Lak province Department of Industry and Trade director Vo Thanh attributed coffee firms’ underperformance to their poor market forecast capacity and low professional qualifications.
|According to preliminary estimates, by the end April 2012, around 100 coffee firms, agents and trading households in the Central Highlands faced default with debts amounting to several dozen millions of US dollars. In Dak Lak province alone, 43 firms and agents are insolvent.|