Professional Documents
Culture Documents
Cong Binh
in Long An Province
(Vietnam)
Developed by
1. Company background
UNITED KINGDOM
CHINA
~100,000
tons
HONG KONG
TAIWAN
6070%
of total rice sold
SINGAPORE
MALAYSIA
INDONESIA
AUSTRALIA
As men oned above, Cong Binh's business has significantly expanded since 2009 a er the decree
No. 109/2010/N-CP, dated in Nov 4, 2010 of the
government on Rice export business. The decree
has provided opportuni es for private companies as
Cong Binh to export rice directly. Cong Binh took
that challenge and invested in an assembly line produc on technology to produce rice (the technology
comes from Japan, the companys sta were trained,
and service available within 24 hours by the Japanese
Map of Rice Value chain without linkage model with Cong Binh in 2015
In this map of value chain, Cong Binh is one of the export companies who buys rice in the value chain (not model
linkage); the amount of rice from each company depends on its demand. Suppliers are seed companies and local input
wholesalers that the farmers buy for their produc on. Cong Binh and other export companies can buy both paddy
and rice from collectors and millers along the chain. Normally, export companies including Cong Binh, have their own
collectors and millers to supply.
INPUT
Supplier
Seed
Agri.
materials
PRODUCTION
Farmer
CGs
COLLECTION
MILLING
TRADING
Collectors
CONSUMPTION
Wholesaler
Milling
Cong
Binh Co.
Retailer
Domestic
user
Export
Institute/university,
Extension center, input Co.
Banks
Local governments at all levels
Map of RVT rice Value chain with Cong Binhs linkage in 2015
In this case, Cong Binh plays a role of both input supplier and rice buyer in the value chain (concentrated model).
The dierences of two above models are below.
INPUT
PRODUCTION
Cong Binhs
Supplier
Seed
Agri.
materials in
cash
MILLING TRADING
RVT Rice
Farmers in
Cs/CGs
Extension center,
Input Co. & processing Co.
Bank
CONSUMPTION
Export
Farmers need loans for buying their input materials that cause high produc on costs due to bank
interest
Step 1
A er iden fying a poten al and suitable growing
area for RVT rice, Cong Binh works with the local
governments to ini ate the linkage setup. Specifically,
Long An DARD facilitates the forma on of farmer
CGs and helps them to vote and choose a Group
Leader and Vice-Leader. Long An extension centre
from DARD help farmers to follow the technical
processes required by Cong Binh, besides a salary
from the government, technicians are paid by the
company to monitor large fields of the company.
At present, all local governments strongly encourage
and support this kind of linkage between companies
and local farmers.
Step 2
Cong Binh signs contracts with the CGs represented
by group leader and local government village president (three-side contract). In the contract, Cong Binh
provides RVT seed and fund for fer liza on. For
instance, in 2014, Cong Binh supplied VND12 million
per ha to farmer for input materials. However, in 2015
Cong Binh will supply RVT rice seed (to ensure quality
of seed to the farmer) along with VND5 million per
ha in advance to the farmer for other inputs (fer lizer,
pes cides); Cong Binhs technicians and Long An
extension centre provides guidance such as crop calendar, produc on, monitoring; and solving problems
happening to produc on procedures when needed.
The group leader then signs a contract with Cong Binh
on the farmer's behalf. The group leader receives RVT
rice seed and the cash in advance given by Cong Binh
(both cash in advance and rice seed is 100% of input
materials for rice produc on). The group leaders then
distribute the seeds and funds to each farmer based
on the rice area commi ed by the household. The
farmer signs acknowledgments of fund and material
received.
Step
1
Step
Step 3
710 days before rice harvest, Cong Binh determines the price of the rice with the farmer. It is done
in CGs mee ng. This determined price is guaranteed
to be higher than the market price by 200 VND/kg,
and this price is updated in the contract. Cong Binh
also provides bags for free to farmers to store rice
with Cong Binh informa on on the bag (farmers are
very happy with this decision because of both the
free bags and Cong Binh brand name on the the bag).
Cong Binh pays the farmers in cash a er deduc ng all
advanced expenses.
Step
3. Lessons learnt
While there are many factors for the success of
Cong Binh, the following were emphasized by the
company itself:
From lessons of many unsuccessful linkages implemented in the Mekong Delta including those done by
Cong Binh itself for other varie es of rice, Cong Binh
has made significant improvements in the program
and implementa on of its RVT linkage with farmers.
Exceeding its targets, the RVT linkage has proved to
be very successful.
Cong Binh develops its market search by par cipa ng in various domes c and interna onal trade
shows and exhibi ons; from trade promo on
centre of Cong Binh company, through various
government agencies, local leaders and from Internet searches.
With the linkage model, Cong Binh understands
its partners (both the input and output partners).
Cong Binh has a reasonable and fair share of profit
with farmer; direct and united communica on
between both sides regarding linkage contract
ma ers witnessed by the local government.
Group leader and sub-leader are reputable persons
in the CGs. They are the most important links
to Cong Binh. They receive a payment between
VND80,000 and 100,000 for each ton of paddy
delivered to Cong Binh Site, in which they have to
pay transporta on cost about 50% of the above
payment. So the group leaders income for this
ac vity is about VND4050,000 per ton that
makes them be very responsible and eec ve in
their works.
Cong Binh is a very capable, enthusias c, and
ethical business.
References
1. Direct interview by structured ques onnaires with Mr. Phan Cong Binh, General Manager/Owner of
Cong Binh Company.
2. Interviews by unstructured ques onnaires with two RVT Group Coopera ves leaders:
Mr. Binh (tel. 0942089100) and Mr. Bui Van Dau (tel. 01672314407) at Tan Tru, Long An Province.
3. Government Act 109/2010/N-CP signed 4/11/2010 rela ng to The Rice Expor ng Business
4. Cong Binh website: h p://congbinhrice.com.vn/ was used to provide general informa on about the
company, its products, and awards etc.
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