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Sugar imports from Laos make domestic manufacturers tremble

2013-11-25 12:02:24

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The Vietnam Sugar and Sugar Cane Association (VSSA) has protested against the plan by Hoang Anh Gia Lai group to sell 30,000 tons of sugar it made in Laos to the Bien Hoa Sugar JSC.

 

Nguyen Van Loc, Deputy Chair of Bien Hoa JSC, on November 20 confirmed that the company plans to import raw sugar from Laos to process for the export to China. However, Loc said that the two sides have not discussed detailed plans yet to implement the idea.

 

Analysts said that Bien Hoa JSC wants to import raw sugar for domestic refining because the raw sugar made by the company’s factory in Tay Ninh province and the raw imports still are not enough for the sugar refinery.

 

Imports will make situation worse

 

Meanwhile, VSSA’s Chair Nguyen Thanh Long said the association has sent a dispatch to the Prime Minister and relevant ministries and branches to protest the sugar import plan.

 

“We protest against the plan, because the import will badly affect the domestic sugar industry,” Long said.

 

According to Long, the inventories remain very high, while the new sugar cane harvesting season nears. Meanwhile, sugar from Thailand and some neighboring countries has been smuggled across the border gates.

 

In such conditions, the imports from Laos would make the oversupply more serious. Hoang Anh Gia Lai’s raw products are believed to have the production costs lower by VND7-8 million per ton than the domestic products.

 

“In Vietnam, the expenses for one ton of material sugar cane are p to VND1 million per ton, while the figure is just hundreds of thousands of dong in Laos,” Long explaining, adding that Vietnamese products cannot be competitive in price.

 

What Long is most worried about is that if Bien Hoa JSC is allowed to import raw sugar to refine for export to China, other Vietnamese companies would follow the move. If so, the sugar industry and millions of sugar cane growers would suffer.

 

According to VSSA’s Deputy Chair Ha Huu Phai, Bien Hoa JSC has been granted the quota to import 20,000 tons of sugar out of the total 73,500 tons.

 

Businesses need to optimize profits

 

According to Loc from Bien Hoa JSC, in previous years, Bien Hoa imported 50,000-70,000 tons of raw sugar for domestic processing and export. However, it still needs some 40,000 tons more to run the refinery at full capacity.

 

Therefore, Bien Hoa plans to import raw sugar made by Hoang Anh Gia Lai in Laos. This would benefit both Bien Hoa JSC and Hoang Anh Gia Lai Group, while this would not badly affect the domestic production.

 

Replying to the criticism by VSSA, Doan Nguyen Duc, Chair of Hoang Anh Gia Lai said it is unreasonable to say that the imports from Laos would harm the domestic sugar industry.

 

According to Duc, domestically made products must not be exported. If Bien Hoa wants to buy raw sugar for processing, it needs to choose the products which can be exported.

 

When asked why Hoang Anh Gia Lai does not export sugar to China and Europe as initially planned, Duc said the group would target many different markets.

 

“We will sell our products to the partners who offer the best prices,” he said.

 

Source: vietnamnet