“Rubber tree is still key”

10:26:52 AM | 6/1/2020

This remark was made by Mr. Vo Toan Thang, General Director of Chu Prong Rubber Co., Ltd, when the rubber industry is suffering difficulty due to low rubber prices and shift to other crops in the Central Highlands provinces. Quoc Hung reports.

Could you briefly introduce Chu Prong Rubber Co., Ltd and its outstanding achievements?

Chu Prong Rubber Co., Ltd was formerly Dong Giao Farm established in 1977. After nearly 43 years of construction and development, with the ongoing effort of all the staff, the company obtained many important achievements in all fields. From a pristine land, a vast rubber growing area of nearly 10,000 ha was formed and created jobs for more than 3,000 people, including more than 50% ethnic minorities. At the same time, the company has made important contributions to socioeconomic development and joined forces with the locality to maintain political security and national defense.

The company has been granted many noble awards by the Party and State, for example Second-class Victory Order in 1993, Third National Defense Order in 2009, Emulation Flag of the Government in 2003, 2004, 2008 and many Certificates of Merit from ministries, the State Enterprise Capital Management Committee, localities and the rubber industry.

You are reportedly witnessing many twists and turns of the company and the rubber industry. Which period really impresses you most?

Without doubt, to create an economically affluent region as today, the company must go through many ups and downs, with many extremely difficult periods. In the 1980s, especially in 1985, when the company was administered by former Gia Lai - Kon Tum province and rubber plantations produced no latex, the company seemed face a wall. After that, from 1988, the company was admitted into Vietnam Rubber Industry Group. With a new management mechanism, it gradually overcame difficulties to grow very well.

The next memorable time was 2011 when rubber prices climbed to all-time highs. However, rubber prices started to decline from 2012 and nosedived steeply from 2016 to date. The selling prices even fell below the cost. No matter the hardship it faced, Chu Prong Rubber Co., Ltd proudly withstood every difficulty to grow very steadily, work very effectively, generate jobs for people and raise living standards for its employees.

Falling rubber prices have caused many rubber businesses to suffer loss, their employees to lose their jobs, and their rubber farms to be abandoned. So, how has Chu Prong Rubber Company managed to overcome these difficulties?

Over the years, the rubber industry has faced plenty of difficulties and challenges. Chu Prong Rubber Co., Ltd is no exception. The prolonged slump of rubber prices troubled both rubber producers and rubber growers. In that context, the company is determined to apply consistent business solutions. The company has carried out many solutions to reduce production costs, investment rates and equipment investment, but the most important factor is personnel.

Accordingly, Chu Prong Rubber Co., Ltd has assured its employees to work for the company. Sometimes, the selling price is roughly equal to the cost, thus the profit margin is very low. But, for the company, No. 1 priority is guaranteed employment and income for its employees. It has tried to reduce layoffs. Currently, compared to its peers, Chu Prong Rubber Co., Ltd retains its employees very well.

Moreover, the company has fostered the application of scientific and technical advances to business to increase labor productivity, crop productivity, product diversity and market expansion. Currently, SVRCV50, SVRCV60, SVL3, SVR3L, SVR5, SVR10 and SVR 20 rubber and latex of very high quality are exported directly to many markets around the world, such as Brazil, the United States, Japan, Spain, South Korea and China.

Many rubber growers have invested to shift to other crops. What do you think about this?

When the rubber price is low, rubber growers replace rubber with other crops. I think this is understandable but this choice must be thought twice before being taken.

I believe that there are a lot of reasons for rubber prices to go south, including economic recession and oversupply. When the rubber tree is turned down by society, the supply will decrease as a result sometime. As the economy balloons, the increasing demand for rubber products will be an opportunity for businesses who dare to “be greedy when others are fearful.”

So, which strategy has the company chosen for itself?

We define that rubber will be still our key crop. We have invested a lot of money and effort for rubber farms and invested a lot of money to build processing facilities. We cannot abandon them when they are working well. I am confident that the demand will increase and the rubber industry will develop well in the near future. In addition, the value of rubber trees is not only latex but also log. The company may earn VND200 - 300 million from rubber log sold in a hectare.

However, this does not mean that we have no calculation or restructuring. We will consider having solutions for low-yield rubber areas, seek new business direction that matches its capacity, forte and market demand. The overall goal of the company is to maximize the value of land use and obtain high economic efficiency and sustainability.

Based in a mountainous area where economic conditions and social security are tough, apart from business task, does Chu Prong Rubber Co., Ltd work with the local government to develop economy and society, ensure social security and national defense?

The company’s top task is business, but its sociopolitical mission is equally important. The company has built social infrastructure wherever its business reaches. On an area of ​​10,000 ha, spanning over 16 communes, including one border-sharing commune adjacent to Cambodia, Chu Prong Rubber Co., Ltd invested in electric systems, roads, schools, and clinics to serve its business operations, its employees and local people. The company has greatly contributed to the uplifted face of Chu Prong district, as recognized by the local people and authorities.

Besides, Chu Prong Rubber Co., Ltd helps maintain political security and social order in the area. Every year, the company spends money for this activity. It also closely coordinates with localities, sign regulations on coordination with police forces, border guards and military force in security.

Thank you very much!