Sagging Vinacafe seeks help

Vinacafe last week reported that it and its subsidiaries suffered poor performance last year due to capital shortages and unfavourable markets.

Vinacafe’s general director Nguyen Nam Hai said that Vinacafe wanted to be supported by the Vietnamese government to resolve its debts and losses. The corporation last week also asked the government for a loan worth VND4.5 trillion ($216.34 million) to buy 100,000 tonnes of coffee beans from farmers to stockpile for exports this year.

Vinacafe’s cumulative loss until last year was VND382.5 billion ($18.39 million), and the total debt of the corporation and its subsidiaries was over VND141.66 trillion ($141.66 million).  

In 2012, Vinacafe’s total revenue and its subsidiaries was VND5 trillion ($240.38 million), down 2 per cent on-year, while their profit was VND105 billion ($5 million), down 45 per cent on-year.

Even, Vinacafe has to pay back the government a VND61 billion ($2.93 million) loan it earlier borrowed to build its coffee processing facility in the Central Highlands’ Viet Duc area.

Vinacafe also asked the government to allow it to reschedule the loan payment of VND126 billion ($6 million) within five years and another VND35 billion ($1.68 million) within three years, due to coffee plantation failures. Moreover, Vinacafe is also asking the government and relevant ministries to reschedule the payment of its overdue VND50 billion ($2.4 million) loan. All these sums came from Agency for French Development’s official development assistance (ODA).

Meanwhile, the corporation’s  subsidiaries last year suffered from long-lasting big losses.

“These companies’ operations largely depend on bank loans, while the lending rate was very high. Besides, there was a slash in coffee selling prices since late 2009,” said the corporation’s vice chairman Le The Chi.

“Vinacafe Da Lat and Vinacafe Export-Import Centre had insufficient capital for operations. As a result, they almost had no operations last year, while their lending rate at banks was too high at 18 per cent, per year,” he said.