Loss-ridden coffee firm eyes brand sale to Chinese company

A man is examining a Duc Lap coffee pack in front of a series of awards and trophies the brand achieved

The departments and agencies are also asked to evaluate the current operation and financial state of the Minh An cooperative -- the owner of Duc Lap, the people’s committee said in its directive.

“China’s Guangzhou Buon Ma Thuot Coffee Co Ltd has eyed purchasing the Duc Lap brand name,” said the committee’s deputy chairman, Pham Tuan Anh.

This is the same Chinese company that has been involved in a dispute with the Dak Lak People’s Committee over the Buon Ma Thuot coffee brand name, added Anh.

“Earlier the cooperative had also intended to sell its brand to an overseas Vietnamese in Australia, but the district people’s committee maintained its view that Duc Lap should be kept in Vietnam, since it is a local mutual property,” Anh told Tuoi Tre.

Meanwhile, Nguyen Van Toan, head of the managing board of the Minh An cooperative, said the organization has encountered a number of difficulties due to losses.

“We have no capital for operations left, and we are owe 90 tons of coffee to 115 farmers and VND10 billion ($480,000) to two credit institutions,” said Toan.

The cooperative decided not to declare bankruptcy since it wanted to keep the Duc Lap coffee brand, which is protected in Vietnam, China, and the US, he added.

“If we are granted a VND5-billion loan, the cooperative will transfer its brand to local authorities without asking for any fees,” said Toan.

He added that a similar demand was made last March, when the cooperative sought permission from the provincial people’s committee of Dak Nong to borrow VND5 billion from the provincial Fund for Investment and Development.

The credit aid would help the cooperative to avoid transferring its brand to foreign partners, he explained.

“But the provincial Department of Agriculture and Rural Development told us in their response that they are not authorized to approve bank loans or brand transfer activity,” said Toan.

“The department also asked the cooperative to transfer the Duc Lap brand to local authorities to develop a mutual brand for Dak Nong province.”

Commenting on the cooperative’s demand for bank loans to transfer its brand, the district people’s committee deputy chairman said it will receive the brand at a negotiable price with Minh An cooperative.

“The district committee has also called on its provincial counterpart to assist the cooperative with credit support, but has yet to receive any response,” added Anh.

While neither of the cooperative’s problems and demands have been solved, Toan said the Chinese company has proposed to buy the brand for VND18 billion ($864,000).

“We have yet to reply to their proposal as we want to keep this brand for the locality,” said Toan.