(Vietnam Agriculture) – Restructuring is currently considered an urgent need for Vietnamese companies in the cane sugar industry.
It may sound like, “That’s the same old story!” though be repeated. Over the years, cane sugar companies have been struggling with the problem of how to balance the costs, including the cost of buying sugarcanes with CCS of 8-9, the increased costs of other inputs, to still keep the farming profitable and the factories productive.
Mr. Phạm Hồng Dương, Chairman of Thanh Thanh Cong Tay Ninh Sugar JSC (TTCS)
The restructurings of the cane sugar industry over the years, as we have seen, have been: merging cane sugar companies to improve competence in operations by expanding areas of raw materials, expanding the markets, increasing the scope of production and business performance…
Though such measures are known, it is required the determination of directors with the effective methods of operations.
Thus Vietnamese cane sugar companies could have detailed plans for the long term strategy. These goals must be accompanied by measures to bring actual benefits to the farmers. Benefits help prevent farmers from growing others than sugarcanes.
Once restructuring, the companies need to strengthen their activities in M&A, marketing and human resources. This is to blow a breath of fresh air into the management, enabling them to catch up with the requirements of global integration. It can be seen that not many young managers are interested in the cane sugar industry as of its demanding.
And the problem is that managers must understand the challenges and the requirements of the cane sugar industry, and adopt advanced management strategies to deal with the challenges; and they also must understand farming, adopt necessary solutions for farmers to benefit in growing sugarcanes.
Agriculture is a major industry in Vietnam since, contributing more than 20% of GDP of Vietnam and more than 70% of the people make their living by farming. More than ever, agriculture industry is seen major, helps reduce unemployment and be part of the country economy.
Cane sugar companies find solutions on working effectively with farmers and help them participate in the value chain of the industry. It is lots more than the buyer-seller relationship. Then the industry can move forward.
Senior managers of these companies understand most that cane sugar factoriess can only operate when farmers still grow sugarcanes. Those who put profit first and lack of responsibilities to the farmers should fail. This occurs regardless how much they spend and how hard they try to restructure their companies.
For TTCS, a company with a total raw materials area of 13,000ha and 3,300 farming families, producing 9,800 tons of sugarcanes/ day, the close relationship with the farmers is definitely one of its priorities.
Over the past few years, TTCS has applied policies to provide best support to farmers, in order to stabilize the raw materials area and found the development, thus the farmers keep growing sugarcanes.
The policies include buying sugarcanes at a good price (sugarcanes with CCS of 10 bought at the factory at VND1,100,000/ ton, farmers provided with VND25,000/ ton); paying transport expenses; applying commercial insurance policy with the lowest CCS of 8; scheduling early harvests in special cases (for instance, removing the roots to grow new sugarcanes, making dividers to prevent fires, or harvesting the crops early to minimize losses because of pests…)
In the 2015 crop, TTCS invests in intensive cultivation and effective watering to increase the productivity, thereby increase the incomes for farmers. The company has in plan to lease farms for growing sugarcanes and provide them with seeds.
“TTCS works with farmers for development” program on Tay Ninh Television and “Sugarcane doctor” program on TTCS website provides useful information to farmers.
TTCS’s new Chairman Mr. Phạm Hồng Dương with 18 years of experience in the cane sugar industry was holding positions as Division Manager, Factory Manager, Deputy General Manager and Member of the Board of Directors of TTCS.
Holding a Master Degree in Production and trained in France, Germany and other countries well-known for sugar technology and production management, Mr. Phạm Hồng Dương shares his views on the issue above, “Maintaining the close relationship with farmers like “lip-teeth” is a must. We, Board of Directors (BoD), determine to develop a team of experienced and skilled employees to run TTCS as planned for the next 5 years”.
In the role of a member of the BoD, Ms. Đặng Huỳnh Ức My, the former Chairwoman of TTCS provides support to the management to reach the goals, with the major focus on maintaining a close relationship with the farmers.
Besides, TTCS is to launch the Excellent Farmer contest to recognize more achievements and efforts of the farmers. This is to standardize the customer policy between the Company and Farmers, making a basis for a long-term relationship and sustainable development.
The contest will be launched with all the details and requirements for the farmers to participate. The farmers should see their rights and responsibilities in cooperating with the company for the development of the cane sugar industry.
Vietnam Agriculture