Farm produce sales discourage potential investors
VietNamNet Bridge - The agriculture industry has lost its luster among industrial manufacturers and service providers. Tycoons are quietly withdrawing money from agriculture projects, just several years after pouring big money into the sector. 

Vietnam, agriculture, Hoang Anh Gia Lai

Gemadept’s board of directors, for example, has submitted to the company’s shareholders a plan to disinvest from the projects in non-core business fields. 

The company, established as a shipping firm, plans to sell all the rubber, industrial crops and real estate projects once the shares can go for good prices. 

A senior executive of the company said rubber trees have cost too much, and rubber is not the company’s core business field. 

Just a few years ago, Do Van Minh, Gemadept’s CEO, said that growing rubber was the way the company could grow rapidly. 

Gemadept’s rubber project in Cambodia is still running well and has brought some initial benefits. 

The company in 2013 got a certificate on the land use rights for 30,000 hectares of land in Cambodia for 70 years. To date, it has developed 7,000 hectares of rubber.

However, Gemadept can only begin exploiting rubber latex by the end of 2016, which means the company will still have to spend more money on rubber trees. Meanwhile, the profit remains unknown.

A businessman in HCM City who injected billions of dong into dragonfruit and rubber cultivation projects also said his was sure of taking a loss because the prices of farm produce have dropped dramatically.

The businessman has decided to put thousands of hectares of rubber in Cambodia to stop losses.

As for dragonfruit, the businessman said he has to scale down the production because of lower demand from China.

KLF, having become a strategic shareholder of HAI, an agrochemical company, has decided to sell all of its 24.5 percent of HAI stakes. 

KLF said it wants to gather strength on real estate investments and more profitable projects.

Prior to that, State Capital Investment Corporation (SCIC) sold 49.96 percent of HAI shares. 

SCIC has also withdrawn its capital from many agricultural enterprises, including NSC, INN and TSC.

The head of Hoang Anh Gia Lai Group, Doan Nguyen Duc, was the first who invested in agriculture.

In 2008, Duc began planting more than 150,000 hectares of rubber in Attapeu (Laos). Four years later, in 2012, Duc invested in planting sugarcanes and processing sugar. In April 2014,  Duc implemented a 5,000 hectare maize project in Laos.

After six years since he began investing in agriculture, Duc now owns 46,000 hectares of rubber, 10,000 hectares of sugar cane and 6,000 hectares of corn in Vietnam, Laos, Cambodia and Myanmar.

Huy Nam, a renowned economist, noted that investors were beginning to quit the agriculture sector after hearing news about the farm produce deadlock at border gates, poor sales and lower rubber prices.  

However, Nam thinks this is just a temporary reaction to the price decreases, and believes that agriculture will still be attractive to investors in the long term.


Vietnam, agriculture, Hoang Anh Gia Lai