Source: According to Cafef.vn
Behind the 9,000 billion tuition fee for farming, behind the German bananas' contracts, there are many contemplative stories about the status and business philosophy.
“The company is a little bit difficult due to the general epidemic situation, mainly the issue of goods' pathway. If you own it, you have to take the initiative to solve it. In general, there is nothing terrible” – Doan Nguyen Duc started the story with me with such a light expression.
Because I wanted to verify with more detailed information about the situation of HAGL in Covid-19, I asked the employees of this company's banana farm in Cambodia. The result is beyond my imagination quite a lot.
“German boss knows the difficulties, I find everything much more optimistic“- one employee of HAGL showed off a reward for completing the plan last month.”The price of bananas is still very high. Many bananas average from US $ 6 – 7 / carton of 13kg. That price is very good in these summer months. The company's products are still exported to China, Japan, Korea and Singapore. So the company's cash flow is still, wages are better, expand investment more cultivation“…
When all countries closed the border, how did HAGL export goods is the key problem to solve the difficult situation for the German election.
“Because of the safety of human life, there is certainly no persuasion of any authorities for HAGL to evade regulations. Just follow the rules – I do this regularly during meetings. And so I have to solve the Logistics problem– “German gourds laugh.
During the blockade, countries only banned people from immigration, not goods from circulation. Goods from the export port travel as usual. The decisive problem with HAGL is how the goods can go from Cambodia to Vietnam, down to Cat Lai port to board ships exported to foreign countries.
The correct answer is given: Container trucks are still towing goods from the banana farm in Ratanakiri to the border gate between Vietnam and Cambodia. There, the truck will turn around and back the cargo truck to the right of the zero mark. At the same time, an empty fleet of public vehicles from the warehouse in Vietnam has turned around at the zero mark. Vietnamese car is just hooked into the container, pulling goods to Cat Lai. Every day dozens of containers are exported through international border gates, but the two sides did not have direct contact with each other.
From 0:00 on 18/3/2020 this plan has been carried out simultaneously. And so, the foreign currency was still flowing into HAGL bags despite the disease.
In the period of 2016 – 2017, people all over Vietnam recalled German election and HAGL with huge debts. By the end of 2019, the total outstanding bank loan balance of this enterprise is still VND 12,700 billion.
What impresses people is the attitude of this business owner with debt. He considered it normal in business: “I am in the wrong direction, I accept it. In business it is bid! When I am in debt, I have to change my direction and sell it. Nothing!“
Mr. Duc said: “Initially, when deciding to invest in agriculture, HAGL chose to develop industrial crops, including rubber and oil palm. After 5 years going into those two trees, looking back, I failed. Failure is because the market price fluctuates too much, not the wrong tree. Like the price of rubber for example, from $ 5,000 / tonne reduced to $ 1,300 / ton only. Lower it to 400%. Oil palm similar, the price is also down.
So there will be only two directions to choose: Convert or not convert? What can be converted without converting?
I spent a huge amount of up to 9,000 billion already. If I didn't convert, I would be lost. And if converted, I got a way out. May be small, may be far, but it is clearly a road.
Finally decided to convert. The decision must be definitive. “
The way Duc elected to look at the truth and admit his own wrong was as definitive as the way he implemented solutions to cut losses, reduce debt and seek revenue. In 2019 alone, with many measures, HAGL has reduced its debt by more than VND 7,000 billion.
This business has had to sell and transfer a lot of its projects and subsidiaries in many countries to have more sources of debt repayment. At the same time, they stepped up restructuring of the group towards divesting from unproductive industries and fields, increasing focus on agriculture.
From 2016 to 2019, HAGL has invested for that conversion 200 million USD. As a result, Duc Duc now owns over 20,000 hectares of fruit trees and more than 30,000 hectares of rubber.
In particular, banana area accounts for about half, contributing to the creation of rapid cash flow, pushing the company's revenue increased recently. Other fruits such as jackfruit and mango have begun to harvest and have good prospects, contributing to a more diverse and solid revenue growth platform in the future.
“Orientation will depend on the stage, but there are 5 types of HAGL trees considered strategic, including bananas, mangoes, grapefruit, jackfruit, durian. Currently, the first 8,000 hectares have been reserved for bananas, which is the main tree at this time. In 1-2 years, the area of palm oil will be replaced by fruit trees. In the immediate future, the existence and maintenance of a vast amount of shareholder assets are the ultimate goal in 2020“stressed Germany.
Analysts think that in the difficult period of repayment and conversion process, it is fortunate for HAGL to receive investment from Thaco.
In August 2018, during the signing ceremony of HAGL's strategic cooperation with Thaco, Prime Minister Nguyen Xuan Phuc was delighted to call this “the marriage for the guard”. In December 2019, in the poorest countryside in Cambodia, after talking about her 9,000 billion tuition fee, the German election once again opened up about this investment: “That is very valuable capital. Firstly because it's timely. Without the investment at the time, there was no conversation between us today. Secondly because it was exchanged with all his flesh. I always consider Thaco not only a partner, they are my benefactors“.
But very casually in a conversation with the leader of Thadi, the subsidiary in charge of agricultural projects of Thaco, they firmly asserted to me that: “It is unknown who should thank anyone in the story of the cooperation between HAGL and Thaco“Certainly, the rights that Thaco got from this handshake must be very attractive, at that time I asked Thadi's leadership like that.
The answer is laughter: “Without this, we wouldn't have had a job and the company wouldn't have had a turnover here (2 agricultural projects that Thadi is currently implementing in Cambodia).
Meanwhile elected German analysis as follows: “Please is not in business. Doing so is like that. Each party must have its own benefit. This is a handshake to share rights and responsibilities in business. This one, Mr. Duong (Tran Ba Duong – President of Thaco) knows best. These agricultural projects are bringing all investors, including HAGL Agrico, Thadi … abundant and potential cash flow, as long as I do it methodically.“.
Although I had been living and working for 2 days on the German farm in Rattanakiri, to be honest, it was too large for me to accurately visualize the scale. The total area of a project I visited has reached more than 20,000 hectares, more than half of which has been planned for banana trees. To see what this scale means, let's put a number: the whole Philippines after more than 40 years of developing an industrial scale bananas industry, their largest garden is only 5,000 hectares.
“Many people do not understand, so I think I am exploding, but I am actually doing fruit gardening, banana garden for a whole future. In 2019, the farm grows over 8,000 hectares of bananas. The Group is determined that by the end of 2020, develop the area of banana tree up to 15,000 ha “, German election shared.
By the end of 2019, besides bananas, HAGL Agrico 's orchard in Cambodia also has 5,000 hectares of mangoes, 5,000 hectares of dragon fruit, 5,000 hectares of pomelos, durian 1,000 hectares and 20,000 hectares of oil palms are in the process of demolition to plant different kinds of fruits. other trees.
So how does German gourmets sell their huge amount of bananas? Mr. Truong Trong – Finance Director of HNG said: “The company is working with more than 30 customers, all of the world's largest traders in the banana industry.”
Mr. Doan Nguyen Duc answered the question in the true nature of the German election.
“It can be said that HAGL's bananas grow to where it sells out. There is not even enough to sell.
I look at the history of thousands of years of agricultural production of my country. Vietnam is proud of being an agricultural country with a large number of farmers, but why do the agricultural products often fall into a state of seasonal devaluation, weakness, and pressure? Answering that question I was just farming.
That's because our output is not large enough, not enough to control the situation, leading to customer control. Since then people have been forced. So, right from the time I started to switch to the field of fruit trees, my view was to make myself strong enough to work properly with customers. And when I was old enough, customers who came to me were always big corporations, not small merchants. At this time, I have the opportunity to control the market, thereby shaping the game rules.
The current story I sell bananas is a bit wild. That's where you need me, I need you. Of course I always respect customers. And because I respect my customers, I must first respect myself.
What is HAGL's way of working in agriculture? I produce the largest quantity, the best quality, sell to the customer who buys the most quantity, at the most suitable price, bypassing all intermediaries. Currently talking about making fresh agricultural products, export agricultural products that meet the standard Global GAP in large quantities, very few Vietnamese businesses can do it but HAGL is doing it.
Every day, only bananas in Cambodia have exported 15 – 20 containers, not to mention dragon fruit, mango … By the end of 2020, when the garden area increased, the trees simultaneously entered the stage of commercial exploitation and export of hundreds containers every day of course. HAGL is doing that, day by month steadily of a kind of quality.
Keeping the scale of producing thousands of fruit containers every year means that HAGL has calculated the story of “you need me”. In principle, when negotiating, customers kept making small claims, I listened and tried and never could.
To be honest, Vietnam's agricultural products must now be gathered under a strict standard in order to raise their value. Currently, we just follow the requirements of this market a little, follow the standards of the other market a little, and then follow the easy demand of the domestic market a little … just go on like that I'll die.
I have to choose for myself a standard. Global standards go. The standard that the whole world has to look into, so that from each specific customer, we have a specific adjustment. Just like that, no fuss! “
Rattanakiri is located on the northeastern plateau of Cambodia, with an international border bordering Kon Tum and Gia Lai provinces of Vietnam. Although the name Rattanakiri has the meaning of Nui Ngoc, this is the poorest province in Cambodia with rudimentary facilities and sparse population density. Most of Rattanakiri's roads are trails, there is not enough room for cars to go, and the land is arid, lacking water all year round.
But there, HAGL is building a banana farm of over 8,000 hectares, where the world's largest importers are all lined up to receive each container. Bananas are shipped by road or sea.
“Anyway, fruit, Vietnam is very advantageous compared to other countries in the world because of its proximity to China – a huge market. Each year they spend up to several hundred billion dollars on fruits, not just a few billion like they are exporting. Vietnam's agricultural products are only a small part of the total amount of Chinese fruit imported. Thus, a conscious neighbor is to enlist China. It only takes twenty to twenty percent for the nation to grow every year as if its farmers are tired“, Mr. Doan Nguyen Duc continued.
Bananas are being exported to major markets such as Japan, Korea, and Singapore by HAGL, but this company determines that China accounts for 70-80% of the group's export market share.
“Doing business with them needs to know that Chinese merchants do not fit. They are the old merchants of the world. I do not professional is forced immediately. For such customers, my job is how to get customers under control“According to Mr. Duc, Vietnam's agricultural business must be strong, must be good, must control all fluctuations so that the customers themselves depend on suppliers. Here, enterprises must also clearly separate. , where is politics, where is history, and where is business.
“The characteristic of this huge market is that they buy at any price, lower prices of gold bran they take away. High quality, they sell at high price, low quality, they buy at low price. An easy-going market but never called a crap market. The regions Shanghai, Beijing, Dalian … are the top markets of the world. Goods must be of very high quality, equivalent to Europe, crap does not have muscle in it. And if sold to provinces near the border of Vietnam, the quality of goods is a bit low, they still buy.
Particularly some European customers are different. There is only one type for EU market, type 1, and others must be eliminated. This I have to calculate extremely awake.
For example with this story: In 2017, the first batch of 2.5 tons of dragon fruit, not yet exported by a container to Australia, had hundreds of newspapers. Then the dragon fruit goes to a supermarket in Australia which is the same as the newspaper spread. But no one noticed, also that day, Vietnam – China border gate in Lao Cai had up to 500 containers of dragon fruit. No one said anything! We do not see Vietnam's agricultural products in China as daily, weekly, monthly, and yearly.
So we can see that our orientation is wrong. Falsely!
Not one container has been exported to Australia, of course it cannot be said that it is a big market. And Vietnamese farmers cannot rely on a container to live, let alone get rich. But the media has painted so big, making the farmers, businesses, all invisible stakeholders collectively misunderstood.
To be honest, Australian size I never care about. This is just a market like many other markets. I sell to Australia just like I sell to China, Korea, Taiwan or Asean countries …
I have to prioritize which markets are closer to me, easier to sell, buy more, buy more often. That is the obvious problem that businessmen must see “..
Particularly for Japanese customers, the German vote is different, at a very high level. “They buy in bulk, accept high prices to get the best goods. For them, reputation is absolute “. That is the reason for HAGL's process of planting and harvesting bananas in the garden. All stages from nursery, cultivation, care, harvest, preliminary processing and storage have regulations and standards. All 8,000 hectares are done using the same method, the same dose, even taking care of the same time frame … to produce millions of bananas in the same way.
Even technicians of trading firms come to the region, working with HAGL workers from the time of working the land until each container of goods arrives at the port. A banana of HAGL can be traced to each lot, each tree, each chamber, each day of packaging …
“Customers from other countries came and observed the process of producing bananas for Japan in HAGL's garden, they were so fascinated that they demanded to popularize the process of exporting bananas to Japan for 8,000 hectares of bananas, just for them to consume. Guests also know that love beautiful bananas is yourself a master. I'm making bananas passionately. Sometimes when walking in the middle of the field, the wind blew away the leaves of a banana leaf, then the young sprouts grew green, the body of the banana was strong and worried. Since then, I just love my job“- German election once said, if football is because it is so beautiful and passionate to enjoy, farming with him now is because of its beauty and passion.”
