Loc Troi wins bid to supply 100,000 tons of rice to Indonesia

Revenue of over $ 55 million

Loc Troi Group JSC recently issued a press release regarding winning a bid to supply 100,000 tons of rice to the Indonesian State Logistics Agency (Perum Bulog), with continuous delivery over the next two months, expected to bring in over $ 55 million.

There are two bid packages, with Loc Troi winning the 60,000-ton package, and the remaining 40,000 tons is the first successful bid for Dai Tai High-Tech Agriculture JSC, a member of Loc Nhan Food JSC, which has been part of Loc Troi’s agricultural ecosystem since late 2022.

On May 22, Perum Bulog announced that Loc Troi and Dai Tai had won the bid for 100,000 tons of rice out of a total of 300,000 tons in this tender. The entire order is expected to be delivered within two months, with payment through letters of credit (LC). Loc Troi and Dai Tai will collectively receive over $ 55 million (equivalent to over VND 1,300 billion).

Loc Troi is working with both domestic and international banks to finance the maximum purchase of paddy from farmers, utilizing the production capacity of 10 rice processing plants with a drying capacity of 10,000 tons per day to complete this order.

Loc Troi stated that when signing contracts, each price point is carefully calculated to cover costs, ensuring profitability for the group while balancing the interests of farmers, market benefits, and the long-term benefits of Vietnamese agricultural products.

Thus, the price of this 100,000-ton order meets these requirements, reflects the current rice market situation, adheres to the required quality standards, and does not impact subsequent tenders or the export prices of the 6-8 million tons of rice that Vietnam exports annually.

The ability of a Vietnamese enterprise to win over 370,000 tons of rice from August 2023 to May 2024 confirms Vietnam’s stable supply capacity despite fluctuations in the international rice market.

Policy recommendations for support and capital promotion

In recent years, Loc Troi has established scientific production processes and suitable cultivation solutions for the soil conditions of each region and the quality requirements of each market, helping farmers reduce input materials, and labour costs, thereby reducing production costs, ensuring and increasing yield and efficiency.

Along with organizing large-scale production links, Loc Troi commits to purchasing all paddy produced by farmers at prices higher than the market by VND 100-500/kg.

To ensure the consumption of this paddy, Loc Troi organizes sales through large orders with reputable partners. This chain operation helps reduce intermediate costs commonly seen in traditional “buying and selling” activities in the rice industry, giving Loc Troi a competitive price advantage for large orders.

With the ambition to “go global,” becoming one of the leading agricultural service groups in the region and the world, Loc Troi is making great efforts to build high-quality raw material areas by expanding production links with farmers in the Mekong Delta. Especially when the “1 million ha of high-quality rice” project is approved by the government, Loc Troi has actively participated in the project.

Since the end of 2023, Loc Troi has signed agreements with provinces in the Mekong Delta to implement production links on 300,000 ha by 2030. With this area, the rice yield can reach up to 6 million tons, equivalent to 3.5 million tons of rice that can be supplied to the market, helping Loc Troi dominate the domestic market, provide exports, and directly meet large export orders from reputable, long-term partners, maintaining its position as the “world’s rice warehouse.”

Mr Huynh Van Thon, Chairman of the Board of Directors of Loc Troi Group, shared: “After the sustainable development plan for 1 million ha of high-quality rice was approved by the Government, Loc Troi has actively coordinated with localities to implement it, enhancing exports to the world, contributing to the country’s green growth. However, Loc Troi cannot ‘go it alone’ without the support of the Government, local authorities at all levels, banks, and financial institutions.”

Mr. Thon shared that Loc Troi’s capital needs are very large because it needs to advance investment funds for farmers in the production linkage area—not just for seeds, fertilizers, and pesticides but also for comprehensive mechanized services throughout the crop.

Accompanying farmers on each field to advise on cultivation processes, pest control, ensuring yield and crop quality, and then promptly paying farmers for rice purchases amounting to several thousand billion VND for each crop.

Especially during peak harvest times (following the traditional cultivation practice of mass planting and simultaneous harvesting, in three seasons: winter-spring, summer-autumn, and autumn-winter), financial costs become a burden for the enterprise, and short repayment periods can lead to cash flow problems.

“I hope that the State will have supportive policies and promote funding sources so that enterprises can confidently and boldly invest in organizing large-scale production linkages, thereby improving productivity and quality, creating sustainable competitive advantages in the international market”, the Chairman of the Board of Directors of Loc Troi Group expressed.