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Vietnamese sugar farmers lose patience with Indian firm in $2.5mn debt dispute

Vietnamese sugar farmers lose patience with Indian firm in $2.5mn debt dispute

Friday, May 27, 2016, 16:47 GMT+7

An Indian sugar company operating in the southern province of Long An is facing strong protest from local farmers for having repeatedly refused to clear payments for sugarcane purchases over the last three years.

NIVL JSC, the operator of a sugar plant of the same name in Ben Luc District, currently owes more than VND56 billion (US$2.5 million) to local farmers for sugarcane purchases between 2013 and 2016, with 2016 already accounting for VND16 billion ($714,286) of the debt.

The plant business model involved sourcing sugarcane from farmers and traders before paying them, a process that went smoothly until three years ago, when NIVL only managed to pay part of their debt.

As traders are the middlemen between the plant and farmers, the sugarcane growers are the ultimate victims of NIVL’s financial problems.

On May 4, the farmers lost patience, besieging the company’s plant with banners reading “[We] request that NIVL clear the sugarcane purchase debts for 2013-16.”

Even after the show of protest, no NIVL executives showed up to meet the angry sugarcane growers.

Duong Van Ut, deputy chairman of Ben Luc District, told Tuoi Tre (Youth) newspaper that authorities are mindful of the dispute between NIVL and farmers.

“We have asked the company’s board of directors to find solutions to resolve the dispute,” he said. “But it is a civil matter and authorities cannot intervene any further than encouraging the firm to settle its debts.”

Ut added that the sugar plant is unable to clear such a massive debt, given its beleaguered operations.

“Only company representatives are showing up to talk with farmers while the executives are nowhere to be seen,” he said.

NIVL started operations in Long An in December 1996, and is reportedly the first foreign-owned sugar factory to start production in Vietnam.

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