The plan of transporting its sugar produced in Laos back to Vietnam for refining and re-export the refined products to China proposed by multi-sector company Hoang Anh Gia Lai Group (HAGL) has ignited a wave of oppositions from the sugar sector, even though it has just been drafted.

HAGL, which is operating a sugar-making facility in Laos, wanted to have 30,000 tons of its products refined by its partner Bien Hoa Sugar (BHS) before being re-exported to China across the borders.

Vietnam Sugar and Sugarcane Association (VSSA) said Vietnam has a sugar surplus over the last year, while sugar plants face tough competition from the cheap sugar smuggled from Thailand via the southwestern borderlines.

The plants thus have resorted to export part of their products to China.

“At a time when the government fails to curb the sugar smuggling at the southwestern borders, exporting sugar across the borderlines with China is the only escape route for local sugar plants,” VSSA chairman Nguyen Thanh Long said.

VSSA said local sugar plants will not be able to compete with HAGL in terms of exporting prices to China as the latter’s production cost is way lower.

The sugar association is also concerned that allowing HAGL to carry out its plan will set a bad precedent.

“If HAGL is allowed to do so, other companies will ask to be treated the same. This year they import 30,000 tons, who knows they will not increase imports to 300,000 the following years?” Long said.

Benefit the country

HAGL chairman Doan Nguyen Duc said he holds a complete contrary view to that of VSSA.

The chairman said his transporting sugar from Laos to Vietnam will not do any harm to the domestic sugar sector, but contribute to the state budget via the import taxes instead.

“BHS plant will then have materials for operation, employees have work to do, and the company will pay taxes for the government,” he elaborated.

He also rejected the accusation that the plan is only benefit foreign workers.

“Some 80 percent of the employees at our Laos facility are Vietnamese,” he said.

Meanwhile, BHS CEO Nguyen Van Loc reiterated that this is only a plan between HAGL and his company, and it will only be implemented once receiving approvals from the government and relevant agencies.

 “The sugar will not be sold in Vietnam, and 30,000 tons are nothing to compared with the capacity of importing up to 600,000 tons of sugar per year from Vietnam of the Chinese importers,” he said.