Vietnamese agri major Loc Troi’s predicament ahead of partnership with TTC AgriS

TTC AgriS, a leading sugar maker in Vietnam, and Loc Troi Group, a major agricultural service supplier and producer, have agreed to cooperate in a bid to upgrade the country’s rice industry. But Loc Troi is entering the partnership amid the most severe crisis in its history and faces an urgent need for substantial financial support.

In early December, Thanh Thanh Cong-Bien Hoa JSC, known as TTC AgriS (HoSE: SBT), and Loc Troi Group (UPCoM: LTG) signed an MoU to develop a sustainable rice value chain and deepen Vietnam’s integration into global markets.

According to Loc Troi, the cooperation focuses on four main pillars: developing sustainable raw material zones meeting international standards, promoting trade in high-value rice varieties, building a comprehensive ecosystem for farmers, and expanding value-added processed products.

Both sides aim to elevate Vietnam’s rice industry by leveraging their respective strengths. TTC AgriS brings 77,740 hectares of raw material areas across Vietnam, Laos, Cambodia and Australia, nearly 240 product lines spanning sugarcane, coconut, banana and rice, and a customer base of about 2,000 B2B clients and more than 300 B2C partners.

With exports to 76 markets, TTC AgriS has an integrated production-to-trading platform and says it is well positioned to enter the rice sector with a long-term strategy.

Loc Troi, founded more than 32 years ago, has built a sustainable agricultural ecosystem with a closed value chain covering research, seed supply, agricultural inputs, services, mechanization, processing, and high-quality rice trading. It is also one of 17 Vietnamese companies licensed to export rice to China.

Loc Troi’s crisis

Despite the strategic partnership, Loc Troi is grappling with its most serious crisis to date. Originating as a crop protection chemicals company, it later expanded into seeds and food production, developing large-scale farming models across the Mekong Delta.

A key milestone came in late 2022, when Loc Troi became a strategic shareholder and merged Loc Nhan Food JSC into its ecosystem, aiming to build a comprehensive rice production and supply chain. The group set targets to develop one million hectares of rice-growing areas by 2025, alongside 50,000-200,000 hectares each for fruit, vegetables, and biomass corn.

The turning point came in 2023. Even as Vietnam’s rice export prices surged to record highs, Loc Troi ran into severe cash-flow stress, accumulated overdue payables to farmers, saw bad debts jump sharply and profits collapse, despite rising revenues, posting heavy losses.

The crisis extended beyond finances to management. The company dismissed its CEO and asked authorities in An Giang province to consider measures against this executive over alleged misconduct and signs of legal violations that caused asset losses.

At a 2024 meeting with Vietnamese entrepreneurs, chairman Huynh Van Thon admitted mistakes in leadership selection and management, saying the missteps had led to major losses and that continuing under those circumstances could even expose him to legal risks.

At its annual shareholders’ meeting in August 2025, Thon said the company continued to face constraints in meeting payment obligations to banks, suppliers, employees, and the state.

He also cited reasons for delays in publishing reviewed and audited financial statements for 2024. These included Ernst & Young Vietnam conducting additional audit procedures to assess the company’s ability to continue as a going concern, and the recovery of inventories from previous years due to dealer insolvency, near-expiry or deteriorating goods, and cash-flow imbalances. The inventory recovery was deemed material, requiring an expanded audit scope.

Against this backdrop, the board of directors proposed a revenue target of VND4.2 trillion ($159.6 million) and a loss before tax, interest, and depreciation of VND524 billion ($19.9 million), a plan that was ultimately rejected.

As of its most recently published Q1/2024 financial statements, Loc Troi reported total liabilities of VND8.94 trillion ($339.7 million), including VND2.08 trillion owed to suppliers and more than VND6.3 trillion in bank loans.

On the asset side, receivables accounted for 56% of total assets, or nearly VND6.7 trillion ($254.6 million), with bad debts of VND826 billion, of which VND490 billion had been provisioned. The figures underscore that the company needs more than a simple partnership and requires substantial financial backing to recover.

TTC AgriS and portfolio diversification

TTC AgriS is a major player in Vietnam’s sugar industry, holding about 46% of the domestic market, with sugar accounting for roughly 90% of its revenue.

The sector, however, has come under pressure as global sugar prices have fallen sharply since late 2024 amid oversupply and stagnant demand.

In Vietnam, Nguyen Van Loc, chairman of the Vietnam Sugarcane and Sugar Association, said the 2025/2026 crop year would be extremely challenging, even “a matter of survival”, due to smuggling, trade fraud, circumvention of trade remedies, and shrinking domestic consumption as imports of high-fructose corn syrup rise.

The industry also faces a broader shift toward reduced sugar consumption, prompting beverage makers to roll out low-sugar or sugar-free products. Dairy producer Vinamilk has launched reformulated products with lower sugar content and outlined plans to gradually cut sugar levels, aiming for zero sugar in some categories by 2028.

Against this backdrop, TTC AgriS has stepped up efforts to diversify its product portfolio. In the 2024-2025 fiscal year, the company completed an M&A deal to acquire Ben Tre Import Export JSC, known as Betrimex, a coconut water and coconut milk producer chaired by Dang Huynh Uc My.

Betrimex operates three plants with five production lines, has subsidiaries in Singapore, the United States, Vietnam, China, and Denmark, and exports to 70 countries.

TTC AgriS said it plans to continue acquiring food companies with ESG commitments to expand scale, boost market share, and generate synergies.

Chairwoman Dang Huynh Uc My said the company remains committed to its “circular commercial value chain” model, focusing on sustainable development across its core value chains, including sugarcane, coconut, banana and, in particular, rice.

To support its ambitions, TTC AgriS maintains relatively high leverage. As of September 30, 2025, its total borrowings stood at VND17.3 trillion ($657.4 million), comprising over VND11 trillion in short-term loans and VND6.3 trillion in long-term debt, with a debt-to-equity ratio of about two times.