Loc Troi Group contracts to trade and produce 2 million tons of rice

On February 2, Loc Troi Group announced the formation of two affiliated businesses, Loc Troi Agricultural Products Joint Stock Company and Loc Troi Seed Joint Stock Company, as a step toward completing the Loc Troi Group's agricultural ecosystem.

Loc Troi Agricultural Products Joint Stock Company (LTA) is responsible for the vital initial and final stages of the closed process, from seed to harvest and transportation to a network of 24 factories located throughout the Mekong Delta for drying, milling, storage, and delivery in accordance with signed contracts.

With a daily capacity of nearly 26,000 tons of rice drying, over 22,000 tons of rice milling, and 1 million tons of rice storage, LTA is able to meet large volume orders year-round, particularly in difficult markets such as Europe, the United States, Japan, and Australia, among others, through a stringent quality management system that complies with international standards such as BRC, HALAL, HACCP, and SMETA.

Loc Troi Seed Joint Stock Company (LTS) presently produces over 80,000 tons of rice seeds in a wide range of varieties in carefully regulated growing areas and works directly with the top farmers, distributing directly through a network of 300 agents spanning the Mekong Delta and the entire country.

LTS is a business entity that capitalizes on rice varieties owned by the Loc Troi Group and licensed for production and commerce, notably the Loc Troi 28 variety (World Fragrant Rice Champion in 2018 and First Prize of the Vietnamese Brand Delicious Rice Contest in January 2022).

Rice varieties OM18 (Vietnam's most widely farmed high-quality fragrant rice) and OM5451 (Vietnam's most exported white rice) would be given freely via LTS to cooperatives associated with Loc Troi.

Under the framework of the launch of LTA and LTS, the Loc Troi Group held a contract signing ceremony for a trading-financing agreement for the production of 2 million tons of rice in 2022, in collaboration with partners such as companies, agricultural distributors, and banks that have developed a long-term relationship with Loc Troi.

At the ceremony, representatives of numerous famous local and foreign banks and organizations, including TPBank, HDBank, BIDV, VPBank, Mizuho, HSBC, and May Bank, committed to co-finance VND 12 trillion for the Loc Troi Group's complete chain of cashless rice production - supply. This promotes transparency throughout the manufacturing process, resulting in a considerable decrease in financial expenses when compared to previous limited, discrete production operations.

As a result, cooperatives and households connected to Loc Troi will be assured of sufficient varieties, agricultural equipment, and vital services, without having to worry about production capital or risk from agricultural tool price fluctuations. Prior to each harvest, LTA agrees to consume all rice produced in order to provide a consistent income for farmers and to promote Vietnamese rice's competitiveness in the global market.

Mr. Huynh Van Thon, Chairman of the Loc Troi Group's Board of Directors, stated: "With the resources we've collected over almost three decades, we're working to perfect Loc Troi's agricultural ecosystem. Today's order for 2 million tons of rice and sponsorship contract worth VND 12 trillion demonstrates the local and foreign partners' confidence in the business model of Loc Troi Group's "large-scale production organization by order". 

Along with this belief, we are more motivated and determined to connect with farmers through cooperatives, as this is the foundation for implementing scientific production processes, reducing seed usage, reducing fertilizer production, and improving water resource management, thereby lowering costs, increasing quality, and increasing profits, lowering greenhouse gas emissions, assisting in the establishment of carbon credits for Vietnam, and contributing to reforestation as well as contributing to realizing the promise of reducing greenhouse gas emissions from Vietnam's rice cultivation to the world".