Dong Nai businessman aims high for global integration

Since Vietnam joined the World Trade Organisation, buying and selling enterprises has become a flourishing trade. Catching this trend, apart from resuming Cheerfiled, DONARCORP has continued hunting for enterprises in dire straits.

Succeeding his father Pham Duc Quat, a king of pig rearing, Pham Duc Binh extended his rearing scale from 800 pigs to as many as 20,000, at his 12-hectare farm in Trang Bom district, southern Dong Nai province. In 1993, he set up Thanh Binh Limited Company, rearing pigs and producing aminal feed. He became “king of pig rearing” well-known from the southeastern to southwestern areas and also received the Red Star award. Last year, he opened a farm product trading floor in Bien Hoa city, directed the Dong Nai Young Enterprise Joint-stock company and started exploiting in the enterprise market.

From “king of pig rearing”

Asked what he thinks about Vietnam’s joining the WTO, director Pham Duc Binh answered without any hesitation.

Animal feed is not a matter of concern, Mr Binh said, as giant animal feed producers such as Cargil, C.P have set foot in Vietnam. There is stiff competition in which a company can still secure a firm foothold in the domestic market. Of course, it is a small market share though, Mr Binh said. Animal husbandry, however, is now becoming the greatest concern. For the past four years, Vietnam has faced an epidemic. Animal breeders, particularly pig breeders, are on the brink of bankruptcy.

At the moment, small-scale and scattered animal husbandry accounts for 90 percent of rearing businesses in the southern provinces and 97 percent in the northern provinces. The animal breeders will become most vulnerable once Vietnam integrates deeply into the global market. They cannot quickly adapt themselves to changes in the world economy. Large-scale and professional animal raising in the past can hardly develop any longer. For the present, when the disease occurs, the first thing functional agencies and local authorities should do is “destroy” all animals no matter how they have been reared. According to Mr Binh, administration agencies should classify or even grant certificates to each type of farm according to which they will be capable of controlling the disease once it occurs. Mr Binh believes that this is the key to developing sustainable animal rearing.

Opening a farm product trading floor

Mr Binh said the services sector now generates a low turnover but high income. Therefore, he is aimd at developing services activities. In mid 2006, he set up a centre for buying and selling material for animal feed in Bien Hoa city.

“The trading centre acts a go-between for both buyers and sellers, provides services such as lending, depositing, representing those buyers who sign contracts with sellers and vice-versa, renting warehouses, and ensuring the benefits of both sides.

In terms of material for animal feed, this is quite a new model in the context of loose control in the prices of both domestic and foreign materials. The price of domestic animal feed is often 15-25 percent higher than that of imported products of the same kind. A trading floor in which prices are always available will help guide enterprise operations and thus reduce production cost.

Director Binh added that the trading floor will expand its warehouse system from the current 36,000 square metres to 100,000 square metres. The floor will also target Cai Mep port and Phu My port in Ba Ria-Vung Tau province, where imported materials are piled.

After six months of operation the trading floor is becoming more crowded. The floor’s weekly price has now become a referrence for the trading of aminal feed material in the domestic market.

To buying enterprise with US$1

The Dong Nai Young Enterprise Joint-stock company was set up by two businessmen who received the Red Star awards – Tran Ba Duong and Pham Duc Binh. In addition to investing in producing and trading farm products, the company plans to use its financial and management capacity to buy enterprises that are on the brink of bankruptcy and bring them back into operation before listing them on the stock market.

The company began its first operation in August 2006 by buying Cheerfield Vina, a wholly foreign-invested company, with just US$1. Some months earlier, Cheerfield Vina was ordered for selling. Around 10 investors paid an interest in the company but none of them bought.

Cheerfield Vina, located at Long Binh Industrial Park in Dong Nai province, has US$2 million in statutory capital to produce moulds for soles. After three years of operating, the company amassed a debt of US$2.1 million and lost its liquidity.

Director Pham Duc Binh said, “We decided to buy Cheerfield Vina as we found a way to revive the company.”

Since Vietnam joined the World Trade Organisation, buying and selling enterprises has become a flourishing trade. Catching this trend, apart from reviving Cheerfield Vina, DONARCORP has continued hunting for enterprises in dire straits.

After opening a farm product trading floor, the US1 trade affair opened a way for Dong Nai businessmen to explore global markets in the context of Vietnam’s deeper integration.

(Source: VOV)