Mounting debts spell doom for Bisuco
Mounting debts spell doom for Bisuco
Hundreds of employees at Binh Dinh Sugar JSC could be losing their jobs as the company is proving increasingly unable to deal with its towering debts and falling short of cash to renovate its production equipment.
Binh Dinh Sugar JSC’s (Bisuco) trade union has been sending documents to competent authorities reporting that the company has been falling behind with payments to its employees and subsequently pushing these workers to the point where they could lose their jobs permanently as their have not received their wages due.
The document noted that Bisuco has no work for their staff in the time to come and its accounts are running too dry to repair the factory’s equipment. Bisuco is known to be indebted to their employees, including VND1.5 billion ($68,807) in wages, over VND2 billion ($91,324) in employees’ social insurance, and some VND1 billion ($45,662) in purchases of sugarcane from farmers.
According to Tran Chau, Deputy Chairman of the Binh Dinh District People’s Committee, after several meetings, Bisuco has agreed to pay for sugarcane worth some VND16 billion ($730,593) purchased from local farmers. On top of the unpaid wages and social insurance, the company, however, has yet to pay sugarcane farmers in the Central Highlands’ province of Gia Rai province, as well as fall behind schedule to pay for a number of its basic construction sites.
In 2006, over 90 per cent of Bisuco’s stakes were acquired by Indian-owned NIVL JSC. During the past three years, Bisuco has constantly been in debt to its sugarcane farmers who supplied the raw ingredient to the sugar factory.
Bisuco leaders once explained that its arrears in terms of wages, social insurance, and sugarcane purchases were a result of the company’s losses derived from the heavy investment in its large-scale plant in Cambodia. In addition, the dropping price of sugar products and refused loans from banks also contributed to the company’s mounting detbs.
In 2014, Binh Dinh sent a formal request to the Ministry of Foreign Affairs to work with the Embassy and the Consulate General of India in Ho Chi Minh City to resolve the liability of NIVL JSC and help the sugarcane farmers in Binh Dinh. The debt issue, however, has not been completely resolved up until now.
Due to economic difficulties, the sugar factory has in fact offered to pay farmers in the Central Highlands regions with refined sugar, in exchange for the sugarcane supplied.
NIVL JSC, meanwhile, is also indebted some VND56 billion ($2.56 million) to sugarcane farmers and merchants in Long An province, VND16 billion ($733,944) of which is due for the 2016 season, while the remainder was accumulated over the previous seasons. However, an anonymous source disclosed that the arrears could be as high as VND95 billion ($4.35 million), with a number of households being owed some VND3-4 billion ($137,600-183,480). According to this source, the unpaid amount adds up to VND9 billion ($412,844) for a number of households.
In 2014, NIVL was besieged by local farmers to perform on unsettled and overdue bills altogether worth VND150 billion ($6.88 million). NIVL subsequently managed to repay the furious farmers in instalments, yet its debts continued building up over the harvests until the current crop.
On April 27 and 28, various employees of the NIVL factory went on strike to demand the full payment of overdue wages. A NIVL representative then met up with the workers to discuss their demands, promising to look into their complaints on the company’s remuneration and medical insurance policy, as well as unfulfilled bonuses. To date, no specific steps have been taken by the sugar factory.
In the same month, NIVL was fined by the Long An Provincial People’s Committee for discharging untreated toxic wastewater into the Vam Co Dong River. The fine imposed was VND350 million ($17,500), the highest ever inflicted on an environmental violator in Vietnam, according to the Ministry of Natural Resources and Environment’s Vietnam Environment Administration Department.
