These include the following factories Dai Tan Ethanol Factory in the Central province of Quang Nam, Tung Lam Factory in the Southern province of Dong Nai, Dai Viet factory in the Central Highlands province of Dak Nong and Dak To Factory in Kon Tum Province.
Each factory has invested hundreds of billions of Vietnamese dong, but their current fates vary. Some have shut down while others are barely surviving and they are listed as tax defaulters.
Recently, there has been much rumor in the stock market about the debt sale of the E5 ethanol production plant of Dai Viet Company which has been closed and abandoned for a long time. The buyer is Duc Giang Chemicals Joint Stock Company (stock code DGC). The deal closed a bad debt after many years of being put up for sale by banks.
From above, it can be seen that many parts of Tam Thang Industrial Park (IP) in Dak Nong Province’s Cu Jut District have deteriorated, with workshops and boilers rusting due to prolonged inactivity and lack of maintenance. In 2007, Dai Viet Company leased more than 13 hectares of land in Tam Thang IP to build a raw material processing plant and produce high-grade animal feed and industrial alcohol. In 2010, Dai Viet Company continued to lease additional land at lot CN15 of Tam Thang IP to build a wastewater treatment system for the alcohol plant.
However, the operation was inefficient, resulting in losses for many years, especially due to the low price of alcohol, so the factory had to shut down.
Not until 2015 did Dai Viet Company overcome its difficulties and resume production and business, but the industrial alcohol factory operated at a low level, only reaching 10 percent to 15 percent of its design capacity. Due to many years of inefficient operation, Dai Viet Company fell into heavy debt and was unable to repay the debts it had invested in the project.
By 2019, Agribank Dak Nong had seized and auctioned off Dai Viet Company's assets to ensure the recovery of the money the company had borrowed. The auction of assets after many rounds of bidding still did not find a buyer. Recently, a leader of Agribank Dak Nong said that Dai Viet Company in Hanoi and Dak Nong had borrowed a total of more than VND500 billion (US$19,512,969) from two branches of Agribank including both principal and interest.
In particular, Dai Viet Company owed nearly VND150 billion to the Agribank Dak Nong branch alone. Because the company did not repay the debt, the bank had to auction the assets to recover the money it had lent.
Through the auction, in early April this year, Duc Giang Chemicals Joint Stock Company bought back Dai Viet Company's assets for more than VND253 billion. For the remaining debt, the bank are still negotiating with the leadership of Dai Viet Company to find a way to handle it, said a leader of Agribank Dak Nong. This purchase was also confirmed by Chairman Dao Huu Huyen of the Board of Directors of Duc Giang Chemicals Joint Stock Company, at the recent shareholders' meeting.
Other private companies participating in the E5 biofuel production program include Tung Lam Company at No. 58 Ngoc Ha Street in Hanoi’s Ba Dinh District.
In 2008, Tung Lam Company invested in building an alcohol production plant from cassava starch with an area of over 350,000 square meters. The plant has a capacity of 72 million liters per year and is located near Gia Ui River in Xuan Hoa Commune of Dong Nai Province’s Xuan Loc District with a total investment of over VND296.53 billion.
At the first state, Tung Lam Company targeted the Chinese market for consumption. However, with the implementation of ethanol-blended gasoline in Vietnam, the entire output of the project shifted to domestic consumption. The plant requires approximately 200,000 tons of fresh cassava annually, but Xuan Loc District produces only 175,000 tons. As a result, the company has sought additional raw material sources from neighboring regions in Binh Thuan and Ninh Thuan provinces. Despite several price adjustments for ethanol sales, the plant currently operates at a limited capacity, focusing on producing medical alcohol and other related industries to sustain its operations.
In recent years, Tung Lam Company has faced challenges in its production and business operations, leading to continuous scrutiny by Dong Nai Tax Department due to tax debts. As of September 2022, the company owed VND98.1 billion in taxes; therefore, the local tax authorities issued a letter requesting a travel ban for the company’s director until tax obligations were fulfilled.
By January 31, 2024, Tung Lam Company topped the list of tax debtors in Dong Nai Province, owing more than VND110 billion. The tax authorities have seized the company’s accounts to recover the outstanding debt.
Elsewhere in the Central region of Vietnam, Dai Tan Ethanol Plant in Quang Nam Province has been operational for over 13 years. Despite changing ownership three times, the plant continues to operate at a sluggish pace.
Established in 2011 with a total investment exceeding VND600 billion, the plant was initially considered the largest ethanol fuel producer in Vietnam and one of the top three in Southeast Asia. Its primary product was ethanol blended with traditional gasoline to create E5 fuel. The plant covers an area of 18 hectares and has a capacity of 100,000 tons per year (equivalent to 125 million liters).
However, after approximately two years of production, the plant had to temporarily suspend operations due to financial losses and capital difficulties. At that time, its debt reached VND700 billion, owed to banks and suppliers of cassava and fuel.
In 2015, Tung Lam Company acquired the plant, and in 2022, the ownership was transferred to Quang Nam Ethanol Joint Stock Company. Currently, the plant primarily produces ethanol from imported corn starch.
Deputy Director Pham Van Tinh of Quang Nam Ethanol Joint Stock Company shared that Dai Tan Ethanol Plant produces 400-450 tons of corn starch raw material daily, resulting in 150 tons of ethanol per day (equivalent to 180 cubic meters). Despite this production capacity, the plant struggles to cover the cost because, according to its design capacity, it would require 1,300 tons of raw material daily for full operation.
The company strives to maintain production, as continuous shutdowns would pose financial difficulties and hinder recruitment efforts. In previous years, the plant faced disruptions due to fluctuations in raw material availability and challenges in selling its products both domestically and globally, said Mr. Tinh.
