Hoang Anh Gia Lai Group wins over import for re-export plan
  • By Bich Diep | | January 26, 2014 10:35 AM
The ministries agreed to HAGL's plan to import raw sugar from Laos for processing before exporting it again, saying it will strengthen the relationship between Laos and Vietnam.


HAGL plan approved

Hoang Anh Gia Lai, which has a sugar-making facility in Laos, proposed the importation 30,000 tonnes of sugar into Vietnam. The sugar will be refined by its partner, Bien Hoa Sugar, before it is exported to China.

The plan has received strong criticism from sugar manufacturers, especially from the Vietnam Sugar and Sugarcane Association (VSSA). Vietnam only exempts tax for certain amount of import sugar in accordance with its commitment with WTO. High taxes will be levied on any amount exceeding this limit.

Also, many have commented that the local sugar industry has been struggling against smuggling due to lax management. According to VSSA, the import for re-export plan may lead to trade fraud and cause more damage than good. Moreover, the VSSA also said the local sugar prices are higher because the government does not support to the industry, as the government of Thailand does.

Answering questions from VSSA, the Ministry of Industry and Trade said 30 firms are allowed to import 73,500 tonnes of sugar and HAGL was not on the list. However, the ministry said HAGL and Bien Hoa Sugar Company should be allowed to import 30,000 tonnes of sugar to raise the export-import turnover between two countries. The import for re-export plan will not affect local suppliers.

The ministry added that they received feedback from the Ministry of Agriculture and Rural Development, the Ministry of Finance and the Ministry of Foreign Affairs. They are either agree or do not oppose the HAGL plan.

However, the Ministry of Agriculture and Rural Development said the supply will exceed demand by 500,000 tonnes this year and many firms will have to export sugar. Other ministries also said they need stricter regulations to prevent smuggling, trade fraud and unfair competition.

After being approved, the stock prices of both HAGL and BIen Hoa Sugar Company immediately rose.

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