Desks are empty, the office silence broken only by a handful of staff chit-chatting or playing on cellphones. It's another slow day at the headquarters of Vinacafe, a state-owned firm once the vanguard of Vietnam's coffee export boom.
"There's no one here for you to talk to," a receptionist said when asked who was in charge at the Vietnam National Coffee Corporation in Ho Chi Minh City, the hub of an industry that produces 17 percent of the world coffee output.
The bosses and managers of Vinacafe have either quit or were not at work that day, like most of the 80-plus staff the company says are employed there, according to the company website.
Vietnam is the world's biggest producer of the strong-flavoured robusta beans, used for instant coffee, and has experienced a decade of solid growth which has seen coffee exports reach $3 billion a year.
But its coffee industry is now in crisis, plagued by tax evasion, mismanagement, insolvency, high interest rates and a credit squeeze. Many coffee operators are trapped with crippling debt and banks are reluctant to lend them more money.
Vietnam's credit crunch is blamed largely on state-owned enterprises that borrowed big during the economic boom of the past decade and squandered cash on failed investments, which has left banks crippled by one of Asia's highest bad-debt ratios.
Of the 127 local coffee export firms that operated in Vietnam a year ago, 56 have ceased trading or shifted to other businesses after taking out loans they can't repay, according to industry reports.
Few coffee exporters are willing to talk about their financial problems. But Nguyen Xuan Binh is one major coffee exporter who admits he's in deep trouble.
His firm, Truong Ngan, is wilting from $28 million of debt owed to seven banks from which it borrowed at interest rates of 20 percent. With barely any cash flow, its only collateral is its stock of coffee beans - enough to fill 200 small trucks.
"Now the banks want to come and repossess all that we have, our 4,000 tons of coffee," Binh told Reuters.
Vietnam's 2013/2014 coffee crop is forecast to be a bumper harvest, around 17 million to 29.5 million 60-kg bags, based on a Reuters poll, adding to a global oversupply and pressuring coffee prices which have lost about 10 percent since October.
But only a few firms, like Vietnam's top coffee exporter Intimex Group, which accounts for a quarter of exports and made $1.2 billion in revenue in 2012, will benefit from this year's crop. The rest will be lucky to survive, with a government assessment of the coffee industry painting a bleak picture.
The value of non-performing loans or debts in the sector likely to go unpaid stands at 8 trillion dong ($379 million), or 60 percent of all coffee industry loans, said a July circular signed by the Deputy Agriculture Minister Vu Van Tam.
BANKRUPTCIES AND METAL BOLTS
"No one wants to admit they're going bankrupt," said one coffee trader in Ho Chi Minh City, who like many of his competitors, asked that his name be withheld.
"Once they go bankrupt, they can never borrow from banks again and their businesses are finished."
Even in the coffee-rich central highlands of Daklak, export firms are fast going bankrupt. "Only half have survived this past year," a local government trade official said.
Struggling coffee exporters blame local banks for their predicament, citing high interest rates issued to lure depositors due to high inflation in 2010-2011, which has in turn curbed the economy to its slowest pace in 14 years.
Many overseas coffee dealers say Vietnamese exporters dug themselves into a hole by overzealous borrowing for expansion and bungled attempts to play the global robusta futures market, which rallied to a three-year peak around $2,600 a ton in early 2011 but then plunged to the current level below $2,000.
Unscrupulous middlemen have also played a part in the crisis, cheating exporters by selling them weighted coffee bags and inferior beans which are difficult to sell or fetch lower prices.
"What I found out is the market there is quite dirty. Middlemen often sell poor beans to exporters. They even put metal bolts in the bags to outweigh them," said Joyce Liu, an investment analyst at Phillip Futures in Singapore.
In an attempt to support its biggest currency earner among agriculture exports, the government last month extended the loan repayment period for coffee firms from 12 to 36 months.
But traders said the move was more aimed at helping troubled banks, by preventing coffee exporter debts being classified as non performing loans.
Banks say they have no ban on further lending to coffee exporters, with rates still high at 10 to 16.5 percent, but admit they are reluctant to do so.
"We don't have any barrier with lending to coffee companies, but we have to be very careful with bad debt. The coffee business is now very unstable so it's not on our preference list," said a deputy manager at a major commercial lender in Ho Chi Minh City, who asked not to be named.
BANKS KEY TO VIETNAM'S CRISIS
The Vietnam Coffee and Cocoa Association (Vicofa) has sought government approval to stockpile 300,000 tons - a fifth of the country's output - to try to boost prices, and offer exporters soft loans to finance purchases of beans from farmers.
But the last such stockpiling effort in 2010 flopped, with only 60,000 of the 200,000-ton target stored because of logistical glitches and slow disbursement of funds.
For cash-strapped exporters, selling beans to repay debts is more important than stockpiling for potential price gains.
But domestic prices are trading near a 16-month trough below 40,000 dong a kg ($1.90) after benchmark London futures sank to a 32-month low on concerns over rising global output. Prices below 40,000 dong usually deter farmers from selling.
"Even top exporters are now having problems," said a dealer in Singapore who trades Vietnamese beans. "I don't think they are going to buy 300,000 tons. How do you expect companies which are suffering from heavy losses to find cash?"
While a prolonged crisis in Vietnam could curb exports, second-largest robusta producer Indonesia may seize the opportunity to sell more beans as the country's production is forecast to hit an all time high this crop year.
Without a dramatic increase in global consumption, top producer Brazil and some other producing countries could lift world inventory to a five-year high in the 2013/2014 crop year, keeping further downward pressure on prices.
"There may be a revamp of the entire coffee industry, and I think those who immediately benefit from the situation in Vietnam are Brazil and Indonesia," said Liu.
Domestic traders believe the only solution to Vietnam's coffee crisis rests with the government and banks that are able to lend, but say the banks are shunning coffee exporters or offering them interest rates they can't handle.
"I'm sure those struggling companies can recover if they get support from banks. But it's unlikely they'll get it," said the director of a leading firm, who asked not to be identified by name.