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Last updated: Friday, August 18, 2017

 

VRG Fosters Vietnam -Cambodia Friendship

Posted: Friday, July 21, 2017


In response to the cooperation programme advocated by the Vietnamese and Cambodian governments, Vietnam Rubber Industry Group (VRG) is a leading agricultural company to invest in Cambodia. The greenness of rubber tree forests grown by VRG has brought fresh life to Cambodian workers. In an interview granted to Vietnam Business Forum, Mr Vo Suc Luc, President of Vietnam Rubber Industry Group, expressed his pride in the Group's great activities and contributions to the Vietnam - Cambodia solidarity and friendship. Hoang Tham reports.

From the perspective of a company that invested early in rubber cultivation in Cambodia according to the cooperation spirit of the two governments, how do you assess the cooperation tradition between Vietnam and Cambodia over the past 50 years, and future cooperation prospects?
Vietnam and Cambodia are two neighbouring countries with a long-standing relationship. In history, the two peoples have always united and stood by each other in the struggle for national independence. With a rich tradition of solidarity, friendship, cooperation, carefree and honest mutual assistance, the bilateral relationship has developed robustly, comprehensively and finely in line with the principle of “good neighbours, traditional friendship, comprehensive cooperation, long-term sustainability” in many areas, especially in economic development cooperation.

Both Vietnam and Cambodia want to maintain a peaceful and stable environment to focus on building and developing the economy. Geographic, historical, cultural and social factors and mutual interests have pushed the two countries closer together and necessitated each other in the era of integration and sustainable development.

On the economic front, Vietnam and Cambodia are neighbouring developing economies and bilateral economic cooperation brings important benefits. Cambodia needs support, cooperation and experience of Vietnam, especially grasping its advantages in market, investment capital and transhipment. Moreover, their need for economic cooperation is not only confined to bilateral but also extensively multilateral, especially in ASEAN, GMS and Indochinese Development Triangle.
On security and politics, Vietnam and Cambodia have fundamental and vital interests in maintaining and developing reciprocal relationship. Building good political and security relationship contributes greatly to the cause of defending and building the nation and is a condition to uplift the position of each country on the international arena and maintain a peaceful and stable environment in the whole region.

The prospect of Vietnam - Cambodia long-term cooperation not only starts from senior leaders but also originates from traditional friendship and sentiment of border people. This will be a long-term sustainable basis in the present and in the future. On June 21, 2017, Prime Minister Hun Sen returned to a place where he crossed the Cambodian border to move towards Vietnam 40 years ago to seek ways to eradicate Pol Pot genocide regime. It was Loc Thanh commune (separated from Loc Tan commune). Commissar Le Hoai My and guerrilla Dinh Ba Hop were among the first to contacts with Lieutenant Colonel Hun Sen. The historic meeting was at the headquarters of Guerrilla 9 - Loc Ninh Rubber Company. A few years later, Le Hoai My was appointed the Director of Loc Hoa Rubber Plantation and Dinh Ba Hop was a manager of a rubber team until his retirement. Surprisingly, rubber forests, rubber villages and rubber workers are historical figures associated with important milestones of the for bilateral relationship history.

VRG is a leading agricultural company to invest in Cambodia where it has faced with both advantages and difficulties. Would you be kind enough to tell about VRG’s efforts to carry out its projects in Cambodia in the past 19 years?
The group started growing rubber in Cambodia in 2007. Currently, VRG is managing a total of 15 companies and directly investing in 19 rubber development projects in eight provinces of Kratie, Ratanakiri, Kampong Thom, Mondul Kiri, Siem Reap, Oddar Meanchay, Preah Vihear and Stung Treng with a total managed land of 118,106 ha, including 90,000 ha of rubber. 2016 was the first year the group takes latex. Most of areas will start to be exploited from 2018-2020. VRG expects to produce 86,000 tonnes of rubber in 2020.

Offshore investment, especially in agriculture, is risky. When we decided to make overseas investment, in addition to looking at such issues as capital, supply and demand, and market prices, we had to pay attention to differences that decide the success and failure in an overseas project like legal environment, economic, social and cultural environment, corporate culture, management culture, technology, language and indigenous people's habits.

In addition to business operations, VRG has exercised many corporate social responsibility activities in Cambodia. Could you please tell more about this?
With its investment projects, VRG and its rubber member companies have created jobs for over 15,000 Cambodian workers with stable incomes, thus helping them lead a better life than before. Apart from creating incomes for people in the project area, the group has up to now invested to build more than 3,000 houses with access to electricity and water for workers, 16 clinics, 14 schools, nearly 3,000 km of roads, bridges and sewers, electricity systems for production and people in project areas; actively supported local governments to build public, education and religious works to serve people living outside project areas, and supported Cambodian social organisations to carry out humanitarian programmes. VRG has donated and supported over US$3 million to local governments and the Cambodian Red Cross, including US$365,000 to build seven primary schools in Kratie, Preah Vihear and Kampong Thom provinces; US$152,000 to build a bridge in Snuol district, Kratie province; US$310,000 to build two pagodas in Sandal and Santuk districts, Kampong Thom province; and US$800,000 to donate to local Red Cross organisations and localities; and US$1.4 million to build other public utilities in various localities.

To enhance investment performance for businesses of the two countries in general and VRG in particular, what additional policies will the two governments need?
The Governments of Vietnam and Cambodia should have an agreement to expand the legal corridor to facilitate border trade development and apply preferential import taxes for commodities of each other; support easy-going policies and reduce administrative procedures, maintain regular dialogues and meetings to seek timely solutions to existing issues; and perfect institutions, policies and laws to create a comprehensive legal framework. We hope that the two sides will have solutions to protect investors when instabilities arise or legal disputes occur.

On the Vietnamese side: In addition to the joint communiqué of high-level talks adopted, central and local authorities and industries of both countries need to concretise and have regular working meetings to learn each other to tackle emerging difficulties in policies and mechanisms.

First, avoiding double taxation; considering removing early duties of 1 per cent levied on sales, not collect taxes of loss-making companies in early years; exempting and reducing corporate income tax; raising starting rubber prices to impose export tax, considering the signing of preferential agreements/bilateral cooperation in agriculture between the two countries, etc.

Second, having mechanisms to coordinate and solve insurance regimes for Vietnamese labourers in Cambodia.

Third, the two countries have to date had no labour agreement. On the other hand, visa fees for Vietnamese working in Cambodia are too high, inconsistent with the general commitment of the Cambodia - Laos - Vietnam Development Triangle.

Fourth, Vietnamese authorities should have policies to support investment, create favorable conditions for credit institutions and banks to provide soft loans to VRG and its members in Cambodia.

Not only taking the lead in growing rubber trees in Cambodia, Vietnam Rubber Industry Group is also a symbolic agribusiness of Vietnam, thus contributing to fostering Vietnam - Laos friendship. Since the middle of 2005, VRG subsidiaries set up joint stock companies to plant, harvest and process rubber in Savannakhet, Champasak, Se Kong, Salavan, Attapeu, Oudomxay and Bolikhamxay. So far, nine companies have planted nearly 29,000 ha of rubber in Laos.

Vietnam - Laos Rubber Joint Stock Company is the first member of VRG to invest abroad and to grow rubber trees in Laos. In the 2005 - 2010 period, the company planted more than 10,000 ha of rubber trees. Especially, the company officially harvested 1,642.39 ha of rubber (planted in 2005) from mid-May 2011 and another 2,200 ha (planted in 2006) from September 2011, totalling bringing 3,842.39 ha in 2011. The firm completed its goal of planting 10,000 ha of rubber two years ahead of schedule. On February 10, 2012, the latex processing plant of Vietnam - Laos Rubber Joint Stock Company, affiliated to Vietnam Rubber Industry Group, was inaugurated in Champasak province, Laos. The facility has an annual processing capacity of 24,000 tonnes of latex. The concern is now running over 10,000 ha of rubber, of which 1,642 ha has been exploited, and employing 3,000 labourers. The company has actually contributed to improving local economies in Laos.

PV








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