Vietnam Southern Food Corporation Limited (Vinafood 2), one of Vietnam’s two biggest food corporations, has racked up USD47.6 million in losses.

Vinafood 2 has reported its operations to the Ministry of Agriculture and Rural Development, saying that it has faced losses for three consecutive years.

According to the report, the firm made a loss of VND268 billion (USD12.7 million) in 2013 and the figure was VND900 billion in 2014 and VND9 billion in 2015, raising its total losses to roughly VND1 trillion to date.

Regarding the losses, Vinafood 2 claimed it was due to its rice export value sharply dropping to USD546 million in 2015 from USD1.05 billion in 2012, which was attributed to the strong competition from Thailand and India. Vinafood also added that tighter credit policies of some banks had caused difficulties for the firm to access loans.

Meanwhile, its subsidiaries had posted ineffective operations, which was partially responsible for Vinafood’s debt. An Giang Food and Foodstuff Company made a loss of VND18 billion. Other subsidiaries such as Binh Dong flour plant; Dong Thap Food and Foodstuff Company; Bac Lieu Food and Foodstuff Company made losses of tens of billions of VND.

To help deal with the difficulties, Vinafood 2 has asked the government to remove the firm from the list of businesses being closely supervised for ineffective operations so that Vinafood 2 could access loans from banks more easily.

By the end of 2015, Vinafood 2 had incurred a total debt of more than VND7 trillion to banks with the majority being short-term loans.

Vinafood 2 is just one example among a range of Vietnam’s state-owned enterprises which operate ineffectively and have made gigantic losses.

Dtinews