Tay Ninh turns into the land of broken dreams

The stark reality is only three of 15 agricultural foreign invested enterprises in the province were reported to have enjoyed profits in 2011.

Some $82 million in foreign direct investment (FDI) were pumped into those 15 agricultural projects registered by the firms, covering 3,387 hectares. The projects focus on produce green vegetables, seeds, poultry breeding and processing, rubber cultivation and processing.

The Tay Ninh Provincial Tax Department said agricultural foreign invested firms had reported tax accounts with losses in many years continuously such as Taiwan’s Taichi Biotech, Malaysia’s QL Vietnam Agroresources, Korea’s Dong Nam Agriculture and Korea-Vietnam Agriculture.

In 2011, out of those 15 firms, five recorded losses totaling with a total amount of VND38 billion (around $1.8 million). While the total profit achieved by three others only hit VND4.5 billion ($215,000).

Taichi Biotech, which has a flower and herbal plantation project covering 700 hectares, reported a  loss of VND36 billion ($1.7 million) in 2011.

Meanwhile, QL Vietnam Agroresources has invested $18.5 million in a chicken and egg production facility with the capacity of 1 million eggs per day and 75,000 chickens per month since 2008,  a 36ha project into . The project covers 36ha and the firm’s disbursement in this project accounted to $15.5 million.

Leong Hong Hing, director of QL Vietnam Agroresources, said that investment incentives in Vietnam’s farming sector were good but there were transport infrastructure problems, unreasonable VAT policy and low purchasing power caused by the economic downturn. The company had a loss of VND1.7 billion ($80,000) in 2011.

QL Vietnam Agroresources enjoyed corporate income tax (CIT) exemption in the first four years of operations and 50 per cent CIT exemption in the next nine years. It  also received land lease exemption during the first 11 years.

However, for example, a poor transport system in the country increased logistics costs, said Hing.
The Ministry of Planning and Investment reported that the FDI slice   in the agricultural sector had been decreasing.

During 1998-2008, the pie only accounted for 4.24 per cent of Vietnam’s total registered FDI fund, but in 2011 it was 2 per cent and 0.5 per cent in the first eight months of this year, valued at merely $40 million.