[Reading level: C1 – Advanced]
After a decade of persistence with bananas, durians, pigs, and silk, Hoang Anh Gia Lai has overcome its liquidity crisis, erased accumulated losses worth tens of trillions of dong, and is now recovering strongly.
Ten years ago, Hoang Anh Gia Lai (HAGL) fell into a liquidity crisis when its total debt exceeded VND 36 trillion, paying VND 4,000–5,000 billion in interest annually. Its stock price plunged, investment funds withdrew capital, and the company faced mounting difficulties. Founder Đoàn Nguyên Đức (known as Bầu Đức) said there were times when the company had no money left to pay employees’ salaries, and long-time partners refused to meet him—almost every door seemed closed. “That was the loneliest period of my life,” he once said.
Long-term investments in rubber and hydropower failed to generate cash flow, pushing the company to the brink of bankruptcy and forcing a comprehensive restructuring.
Rebuilding from Collapse
When the company was hanging “by a thread,” instead of withdrawing from the business world, Bầu Đức chose to confront reality: selling assets, cutting costs, and restructuring from the ground up.
Assets once considered “untouchable,” such as HAGL Hospital, had to be transferred. “At that time, I was truly desperate,” Đức recalled, explaining that the more he operated, the more losses mounted, and the only solution was to reduce debt at all costs.
A turning point came in 2018 when Thaco Chairman Trần Bá Dương agreed to take over the agricultural segment. This cooperation not only injected capital but, more importantly, gave HAGL time to reorganize its finances, negotiate with creditors, and narrow investments outside its core business—laying a financial foundation for a new agricultural model. From chili peppers and passion fruit to bananas, durians, banana-fed pigs, and mulberry silkworms, every initiative revolved around one principle: generating real cash flow.
The company now applies a “four crops, two livestock” model. The four crops include 7,030 hectares of bananas, 2,140 hectares of durians, 3,000 hectares of coffee, and 1,000 hectares of mulberries. The two livestock segments are pigs and silkworms. The banana-fed pig system has reached a scale of about 500,000 pigs across nine farming clusters, with 64,641 pigs sold after nine months, indicating that the supply chain is operating stably.
HAGL’s silk-spinning factory in Hàm Rồng covers 2.5 hectares. Đức explained that HAGL does not only want to cultivate crops but also to expand into deep processing. “Planting mulberries, raising silkworms, spinning silk”—three small links that, if scaled sufficiently, will create sustainable value,” he shared during a recent field visit.
He calculated that investing in one hectare of mulberry costs about VND 500 million, yet productivity is outstanding. With 13–15 kg of leaves producing 1 kg of cocoons, and 7 kg of cocoons yielding 1 kg of silk, each hectare produces 100 tons of leaves annually, equivalent to 0.95–1.1 tons of silk. At an international price of about USD 65 per kg, silk revenue currently surpasses bananas. The first batch of silk was exported to India in July, while by-products such as pupae and silk waste are also fully utilized. The company plans to open another 3-hectare factory with a capacity of 1,000 tons of silk per year to complete the value chain.
Many shareholders have praised this direction. Investor Đào Phúc Tường in Hanoi commented that the closed ecosystem allows HAGL to control quality and enhance product value.
However, mulberries and silkworms are only one part of the company’s multi-layered strategy. Bananas and durians remain the main cash flow pillars: in the first nine months, banana output reached 365,670 tons, durian 3,284 tons, with peak harvest expected from 2026. The 3,000 hectares of coffee are projected to generate steady cash flow over the next three years. According to Đức, these components form a circular value chain, reducing risk and retaining profits within the system.
Accelerating After Restructuring
Strategic and operational changes have been reflected in HAGL’s business results. In the first nine months, net revenue reached VND 5,600 billion, up 33% year-on-year; fruit contributed VND 4,408 billion, accounting for nearly 80% of total revenue. After-tax profit reached VND 1,312 billion, fulfilling 87% of the annual plan.
As of November, profit is estimated at VND 1,800 billion. Management forecasts that the fourth quarter will record additional extraordinary income, bringing full-year profit to around VND 2,800 billion if no major disruptions occur. This marks the fifth consecutive profitable year after restructuring.
The recovery contrasts sharply with the 2016–2021 period, when high debt and scattered assets led to accumulated losses of nearly VND 7,000 billion. By July this year, all accumulated losses had been erased, and the company now records debt of only VND 7,000 billion.
The company plans to list Hưng Thắng Lợi Gia Lai Joint Stock Company in 2026 and Gia Súc Lơ Pang in 2027. Its cultivated area has been audited at about 18,000 hectares, targeting 30,000 hectares by 2030, including 10,000 hectares of Arabica coffee, 7,000 hectares of bananas, 3,000 hectares of durians, 2,000 hectares of mulberries, and other crops.
Many shareholders believe HAGL has entered a stable operational phase, with integrated linkages from garden to farm to factory and clearer risk and financial management strategies. The company’s accumulated loss “blood clot” has been resolved, and debt has been reduced. Looking back, Đức reflected: “In the past I was reckless; now I am cautious.” According to him, overreliance on bank loans is a costly lesson the company must never repeat.
Lessons in Risk and Governance
According to Đức, the most difficult challenge in agriculture lies not in technique but in the market and quality standards. In terms of markets, the company’s bananas and durians have stable outlets in China, Japan, and South Korea; silk, though the factory has operated for only four months, already has export contracts with India.
He added that the biggest challenge is controlling pesticide residues. Silkworms are highly sensitive and can only consume completely clean mulberry leaves. Therefore, all mulberry-growing areas use no chemicals and are managed separately to avoid contamination from nearby residential or farming areas.
Đặng Phúc Nguyên, Secretary General of the Vietnam Fruit and Vegetable Association, said global demand for silk is rising rapidly in the premium and technological application segments. “This will be an opportunity for Vietnam as global silk demand exceeds supply. As for bananas, Vietnam has disease-resistant varieties and cultivation areas close to consumer markets, giving it an advantage,” he noted.
Nguyên assessed that the participation of large enterprises like HAGL provides momentum for both industries by expanding production, improving quality, and meeting import standards. If more companies with similar capacity emerge, the competitiveness of Vietnamese agricultural products—from bananas to silk—will improve significantly.
Financially, HAGL prioritizes reinvestment over borrowing. After restructuring, the debt-to-charter-capital ratio stands at 0.51 times; debt-to-equity at 0.48 times; and debt-to-total-assets at 0.23 times—forming a foundation for expansion.
Nguyễn Đức Nhân, Director of the Business Center at Mirae Asset Securities Company, observed that the company has shown “clear improvements after restructuring.” According to him, early mistakes forced the company to pay a heavy price but also helped it accumulate experience. Field surveys indicate that governance and operations have improved significantly.
He noted that agriculture still carries risks from policy changes, weather, and the investment environment in Laos and Cambodia. Nevertheless, HAGL is now in a stronger position than before, with room for expansion and robust growth in its core sectors.
Source: https://vnexpress.net/hanh-trinh-10-nam-tra-no-cua-cong-ty-bau-duc-4964616.html
WORD BANK:
persistence /pɚˈsɪs.təns/ [B2] (n): sự kiên trì
durian /ˈdʊr.i.ən/ (n): sầu riêng
crisis /ˈkraɪ.sɪs/ [B2] (n): khủng hoảng
liquidity crisis /lɪˈkwɪd.ə.t̬i ˈkraɪ.sɪs/ (n): khủng hoảng thanh khoản
erase sth /ɪˈreɪs/ [B2] (v): xóa bỏ cái gì
accumulated losses /əˈkjuː.mjə.leɪ.t̬ɪd ˈlɔː.sɪz/ (n): khoản lỗ tích lũy
exceed /ɪkˈsiːd/ [B2] (v): vượt quá
interest /ˈɪn.trəst/ (n): lãi vay
plunge /plʌndʒ/ [C1] (v): lao dốc, giảm mạnh
withdraw capital /wɪðˈdrɔː ˈkæp.ɪ.t̬əl/ (v): rút vốn
mount /maʊnt/ [C1] (v): chồng chất, tăng lên
hydropower /ˈhaɪ.droʊˌpaʊ.ɚ/ (n): thủy điện
cash flow /ˈkæʃ floʊ/ (n): dòng tiền
the brink of sth /ðə brɪŋk əv/ (phr): bờ vực của cái gì
bankruptcy /ˈbæŋ.krʌpt.si/ [C1] (n): phá sản
comprehensive /ˌkɑːm.prɪˈhen.sɪv/ [B2] (adj): toàn diện
be hanging by a thread /bi ˈhæŋ.ɪŋ baɪ ə θred/ (idiom): ở trong tình trạng cực kỳ mong manh
confront sth /kənˈfrʌnt/ [B2] (v): đối mặt với cái gì
from the ground up (phr): từ đầu, từ nền tảng
transfer sth /trænsˈfɝː/ [B2] (v): chuyển nhượng cái gì
desperate /ˈdes.pɚ.ət/ [B2] (adj): tuyệt vọng
turning point /ˈtɝː.nɪŋ pɔɪnt/ (n): bước ngoặt
take over sth /teɪk ˈoʊ.vɚ/ (v): tiếp quản cái gì
segment /ˈseɡ.mənt/ [B2] (n): phân khúc
inject capital /ɪnˈdʒekt ˈkæp.ɪ.t̬əl/ (v): bơm vốn
negotiate /nɪˈɡoʊ.ʃi.eɪt/ [B2] (v): đàm phán
creditor /ˈkred.ə.t̬ɚ/ [C1] (n): chủ nợ
passion fruit /ˈpæʃ.ən fruːt/ (n): chanh dây
mulberry silkworm /ˈmʌlˌber.i ˈsɪlk.wɝːm/ (n): tằm dâu
initiative /ɪˈnɪʃ.ə.t̬ɪv/ [B2] (n): sáng kiến
revolve around sth /rɪˈvɑːlv əˈraʊnd/ (v): xoay quanh cái gì
cluster /ˈklʌs.tɚ/ [B2] (n): cụm, nhóm
scale /skeɪl/ [B2] (n, v): quy mô; mở rộng quy mô
sufficient /səˈfɪʃ.ənt/ [B2] (adj): đủ
sustainable /səˈsteɪ.nə.bəl/ [B2] (adj): bền vững
outstanding /aʊtˈstæn.dɪŋ/ [B2] (adj): nổi bật; còn tồn đọng
cocoon /kəˈkuːn/ (n): kén tằm
equivalent to sth /ɪˈkwɪv.ə.lənt/ (adj): tương đương với cái gì
revenue /ˈrev.ə.nuː/ [B2] (n): doanh thu
surpass sth /sɚˈpæs/ [C1] (v): vượt qua
a batch of sth /ə bætʃ əv/ (n): một lô, một mẻ
by-product /ˈbaɪˌprɑː.dʌkt/ (n): sản phẩm phụ
pupae /ˈpjuː.piː/ (n): nhộng
utilize /ˈjuː.t̬əl.aɪz/ [C1] (v): tận dụng
multi-layered /ˌmʌl.ti ˈleɪ.ɚd/ (adj): nhiều tầng, nhiều lớp
pillar /ˈpɪl.ɚ/ [B2] (n): trụ cột
circular /ˈsɝː.kjə.lɚ/ [B2] (adj): tuần hoàn, tròn
retain sth /rɪˈteɪn/ [C1] (v): giữ lại
year-on-year /ˌjɪr ɑːn ˈjɪr/ (adv): so với cùng kỳ năm trước
after-tax profit /ˈæf.tɚ tæks ˈprɑː.fɪt/ (n): lợi nhuận sau thuế
disruptions /dɪsˈrʌp.ʃən/ (n): sự gián đoạn
consecutive /kənˈsek.jə.t̬ɪv/ [B2] (adj): liên tiếp
recovery /rɪˈkʌv.ɚ.i/ [B2] (n): sự phục hồi
scattered /ˈskæt̬.ɚd/ (adj): rải rác
list /lɪst/ (v): niêm yết (doanh nghiệp lên sàn chứng khoán)
audit /ˈɑː.dɪt/ [C1] (n, v): kiểm toán
integrated linkages /ˈɪn.t̬ə.ɡreɪ.t̬ɪd ˈlɪŋ.kɪ.dʒɪz/ (n): liên kết tích hợp
blood clot /ˈblʌd klɑːt/ (n): cục máu đông
reckless /ˈrek.ləs/ [C1] (adj): liều lĩnh
cautious /ˈkɔː.ʃəs/ [B2] (adj): thận trọng
outlet /ˈaʊt.let/ (n): đầu ra
pesticide residue /ˈpes.tə.saɪd ˈrez.ə.duː/ (n): dư lượng thuốc trừ sâu
sensitive /ˈsen.sə.t̬ɪv/ [B2] (adj): nhạy cảm
contamination /kənˌtæm.əˈneɪ.ʃən/ [C1] (n): sự ô nhiễm, nhiễm bẩn
premium /ˈpriː.mi.əm/ (adj): cao cấp
disease-resistant /dɪˈziːz rɪˈzɪs.tənt/ (adj): kháng bệnh
variety /vəˈraɪ.ə.t̬i/ [B1] (n): giống
enterprise /ˈen.t̬ɚ.praɪz/ [B2] (n): doanh nghiệp
momentum /moʊˈmen.t̬əm/ [C1] (n): đà phát triển
emerge /ɪˈmɝːdʒ/ [B2] (v): nổi lên, xuất hiện
prioritize sth over sth /praɪˈɔːr.ə.taɪz/ (v): ưu tiên cái này hơn cái kia
debt-to-charter-capital ratio (n): tỷ lệ nợ trên vốn điều lệ
debt-to-equity ratio (n): tỷ lệ nợ trên vốn chủ sở hữu
debt-to-total-assets ratio (n): tỷ lệ nợ trên tổng tài sản
pay a heavy price (v): trả giá đắt
governance /ˈɡʌv.ɚ.nəns/ [C1] (n): quản trị
room for expansion /ruːm fɔːr ɪkˈspæn.ʃən/ (n): dư địa để mở rộng
robust /roʊˈbʌst/ [C1] (adj): mạnh mẽ, vững chắc
core /kɔːr/ [B2] (n): cốt lõi
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