Urgent shortage of raw materials for sugar industry

(Baonghean) - In recent years, sugar factories in the province have faced many difficulties in terms of raw materials and had to compete with smuggled sugar, affecting production activities and leading to a decrease in sugarcane growers' income.The solution to implement raw material area planning combined with high-tech application in planting, caring for and purchasing sugarcane has been implemented, but in practice there are still shortcomings.

Nghe An Sugarcane Company organizes sugarcane purchasing for people in the fields. Photo: PV

Concerns from planning…

In order to create conditions for 3 sugar companies including Nghe An Sugar Company (NASU), Song Con Sugar Joint Stock Company, Song Lam Sugar Joint Stock Company to produce stably, from 2014 to present, Nghe An Provincial People's Committee has approved 3 times the planning and adjusted, supplemented the planning of raw sugarcane production areas, period 2013-2020.

According to the decision approving the planning in 2014, to meet the raw material demand for factories operating until 2020 of 15,500 tons/day, the planned area for growing standing sugarcane until 2020 is 30,348 hectares. Of which NASU is more than 16,500 hectares, Song Con is more than 12,300 hectares, and Song Lam is 2,700 hectares.

However, the business side said that due to the inadequate planning and not being close to reality, factories find it difficult to expand their area and are always in a state of "hunger" for raw materials. Mr. Ngo Van Tu - General Director of Nghe An Sugarcane Company said that the area according to the planning of sugarcane planting in the planning of the Provincial People's Committee and the actual area planted and capable of planting sugarcane have quite a big difference. The reason is that the planning overlaps with other crop projects, farmers convert crops themselves. According to the planning of the province, in 2017, NASU company still lacked 4,340 hectares of land to plant sugarcane and by 2020, it will still lack 2,340 hectares.

With the actual sugarcane area up to this point being 1,716 hectares, Song Lam Sugarcane Joint Stock Company is lacking 984 hectares of sugarcane land according to the planning until 2020. For Song Con Sugarcane Joint Stock Company, the actual sugarcane area up to this point has only reached 6,909 hectares and according to the planning until 2020, it is still lacking nearly 5,400 hectares.

Mr. Phan Van Hoa - Director of Agriculture of Song Lam Sugarcane Joint Stock Company said that it will be very difficult to reach the planned area by 2020. The reason given by Mr. Hoa is due to the inadequacy in planning between sugarcane companies, leading to the company having difficulty expanding the area in Anh Son, Con Cuong.

Producing and processing white sugar at Song Con Sugarcane Joint Stock Company. Photo: PV

According to the planning of raw material areas of Song Lam Sugarcane Joint Stock Company, they are mainly located in the two districts of Anh Son and Con Cuong. Up to now, the company has expanded its area in Anh Son by 1,209 hectares and in Con Cuong by 394 hectares.

“In 2016, the Provincial People's Committee had a policy to supplement the planning of sugarcane raw material areas for Song Lam Sugarcane Company in the communes of Duc Son, Vinh Son, Lang Son, Phuc Son... But just one week later, the Provincial People's Committee withdrew these areas and kept them for Song Con Sugarcane Joint Stock Company. Meanwhile, if calculated, the distance from Song Lam Sugarcane Company to these raw material areas is only about 16km, and if to Song Con Sugarcane Joint Stock Company located in Tan Ky district, it is more than 40km. In our opinion, such planning is not appropriate,” Mr. Hoa expressed his opinion.

Regarding this issue, previously, in 2014, the People's Committee of Anh Son district and 8 communes in the district submitted a request to the Provincial People's Committee and the Department of Agriculture and Rural Development to allow detailed planning of raw material areas in Anh Son district for a factory, Song Lam Sugarcane Joint Stock Company, not to include the sugarcane growing areas of 8 communes in the planning area for Song Con Sugarcane Joint Stock Company to avoid the situation of haggling, competing to buy and sell in sugarcane growing areas, as well as to meet the raw material needs of Song Lam Sugarcane Joint Stock Company. However, the above proposal was not agreed by the Provincial People's Committee.

…to the issue of competition

In fact, due to the unsuitable planning of raw sugarcane areas, there has been a situation of competition between factories to buy and sell raw materials. Regarding this issue, Mr. Ngo Van Tu - General Director of Nghe An Sugarcane Company (NASU) said that each crushing season, NASU Company is competed by traders to buy 85,000-100,000 tons of sugarcane, causing a serious shortage of raw materials for the factory to operate, with capacity reaching only over 60%.

Typically, on December 13, 2017, a trader named Dang Thi Hoa bought 20 tons of sugarcane from Mr. Ngo Van Chung's family (Nghia Hoi commune, Nghia Dan district) and was known to sell it to another factory in Tan Ky. Meanwhile, Mr. Chung's family had signed an economic contract with Nghe An Sugarcane Joint Stock Company to lend more than 24 million VND to invest and harvest sugarcane. "We have repeatedly complained to the Provincial People's Committee, the Department of Agriculture and Rural Development, and the districts, but the issue has not been resolved," said Mr. Tu.

Song Lam Sugarcane Joint Stock Company also stated that it has the smallest sugarcane growing area, but almost every year there is competition to buy raw materials, causing the factory to not have enough raw materials to operate at full capacity. Mr. Phan Van Hoa - Director of Agriculture of Song Lam Sugarcane Joint Stock Company said that this situation has lasted for many years.

Accused by two other companies of competing to buy raw materials, Mr. Nguyen Ba Quy - Chairman of the Board of Directors of Song Con Sugarcane Joint Stock Company did not deny and said that all three companies competed to buy raw sugarcane materials from each other, not just Song Con Sugarcane Joint Stock Company. "Now we can talk about it from any aspect, but it mainly arises in encroached areas. NASU Company and Song Lam Sugarcane Joint Stock Company also buy raw materials in the planning area of ​​Song Con Sugarcane Joint Stock Company. All three enterprises have that situation and this situation has been going on for a long time," said Mr. Quy.

People of Nghia Thinh commune grow high-quality KK3 sugarcane for Nghe An Sugarcane Company. Photo: PV

In June 2017, at the conference to deploy the 2017/2018 crushing plan organized by the Department of Agriculture and Rural Development, this issue was also raised by factories and suggested that the province and the Department of Agriculture and Rural Development need to have solutions to help manage the sugarcane raw material planning area and minimize the competition for raw material purchase. However, this story still has no solution because as Mr. Ngo Van Tu said, the Department of Agriculture and Rural Development said that it only supervises the planning, while the management of the planning is up to the local authorities at the district and commune levels. Meanwhile, the district authorities cannot commit to the occurrence of raw material disputes in the planned area.

Good planning management with high technology applications

While sugar companies are competing with each other and are always short of raw materials, a big challenge is that in 2018 Vietnam will implement the AFTA Agreement (ATIGA), so the import and export of sugar within ASEAN will be reduced, possibly down to 5%. At that time, the sugar industry will have to face fierce competition with countries in the region, especially Thailand. In order for the sugar industry in general and sugar companies in the province to stand firm and develop, what needs to be done now is to solve the problem of raw materials.

In addition to expanding acreage, sugar companies need to focus on increasing sugarcane productivity by investing in synchronous technical measures from introducing new varieties, applying water-saving irrigation technology, to investing in intensive farming on favorable areas and promoting mechanization from land preparation, planting, care and harvesting.

To do so, sugarcane enterprises must take strong action, especially investing in sugarcane seed production areas with high-yield, pest-resistant varieties and early eradication of grass shoot disease in raw material areas. Sugarcane companies need to import and transfer some high-yield, high-quality, disease-resistant varieties into production such as: LK92.11, KK3,...

Sugar companies need to continue supporting sugarcane growers to invest in expanding the area of ​​new varieties in the direction of high technology, comprehensive intensive farming, synchronously upgrading modern equipment; investing in the production of post-sugar products to improve business efficiency in order to increase sugarcane purchase prices, helping sugarcane growers increase their income. When sugarcane prices are stable, sugarcane growers have high incomes, the problem of cutting down sugarcane and planting other crops will certainly decrease. From there, the production activities of sugar factories will be more stable./.

Pham Bang