Cooperative Rach gam: Efficiently participating in the value chain

Over the past 45 years, amidst the ups and downs of Tien Giang province’s development and the nation as a whole, Rach Gam cooperative has steadfastly progressed.

Currently, Rach Gam Cooperative is known as a large-scale inland waterway transport cooperative with highly efficient production and business operations, ranking among the top in the country in the inland waterway transportation sector of Vietnam. It provides employment for hundreds of laborers. Whether referred to as an economic cooperative, a leading logistics enterprise, or an inland waterway and inland water transport unit under Tien Giang Department of Transport, all descriptions are accurate.

Initially, it was a unit under the Tien Giang Department of Transport, with about 100 members and assets consisting of a 16-square-meter house, 29 wooden boats, 32 passenger boats, and a dock on the Tien River. After the Law on Cooperatives was enacted in 1997, Rach Gam Cooperative shifted to a multi-sector operational model (cargo and passenger transportation, petroleum business, construction material supply, etc.) with unified management and accounting. The cooperative transferred specific assets and responsibilities to each member and strengthened individual responsibility in asset management.

Rach Gam Cooperative has dominated the river cargo transportation market with an estimated output of over 4 million tons per year. Its primary cargo includes the transportation of exported rice, sand, stone, construction materials, asphalt slag, and animal feed from the Mekong Delta to Ho Chi Minh City and Phu Quoc Island, as well as from the eastern and southeastern provinces to Phnom Penh and Koh Kong (Cambodia) and vice versa.

Up to now, Rach Gam Cooperative has nearly 70 large-sized boats and iron ships with a total tonnage of nearly 60,000 tons, employing nearly 400 laborers. It has business links with 29 individual and other entity ship owners, with a total tonnage of over 30,000 tons. Consequently, it has nearly 100,000 tons of river vessels, conducting diverse business activities. The cooperative transports nearly 3 million tons of goods per year. Recently, it has constructed 8 to 10 new ships, including ships with a container-carrying capacity of 2,800 tons.

In addition, the cooperative repairs more than 60 ships per year, constructs concrete bridges, asphalt roads, and supplies gasoline, oil, sand, and stone. Its annual total revenue is nearly 230 billion VND.

In addition, the Dong Tam Shipbuilding Plant under Rach Gam Cooperative constructs new ships and repairs 35 to 50 ships annually. Especially, since 2014 – 2015, the plant has constructed numerous ships, some with a carrying capacity of up to 3,400 tons for container transportation to Cambodia, generating annual revenue of 20 – 30 billion VND.

On July 17, 2023, the Dong Tam Shipbuilding Plant held a groundbreaking ceremony for the construction of a new 100-ton ferry to replace the A60 ferry that had reached the end of its service life. The total investment for this ferry is over 12 billion VND, marking a new development milestone for Rach Gam Cooperative.
To achieve this, he believes that first, the cooperative must operate professionally with a long-term development vision. Management should be transparent, open, and democratic. Everyone should work with a sense of responsibility, obligations, and clear rights.

A cooperative is not a unit where one or two people invest money; it involves multiple individuals contributing capital. A single boat has a value equivalent to tens or hundreds of taels of gold. “People invest in the cooperative, and the leaders of the cooperative must ensure that this money grows,” emphasized Mr. Liem. As an economic cooperative model, Rach Gam Cooperative has an open perspective: “Anyone who wants to join is welcome, and anyone who wants to leave can do so.” Therefore, the cooperative’s key to success lies in cohesion and value chain management.

According to Mr. Liem, at Rach Gam Cooperative, this perspective isn’t limited to the leadership alone but extends throughout the administrative machinery, office staff, etc. Their income comes from the capital contributed by cooperative members. If they want a salary, they must ensure that the members’ capital “thrives.”

Having devoted his entire life to Rach Gam Cooperative, Mr. Tran Do Liem, the Chairman of the Cooperative, shared the secret to its success: “Wealthy members make a prosperous cooperative. If Rach Gam Cooperative wants to prosper, its members must be wealthy.”

Reflecting on the achievements attained over time, Mr. Tran Do Liem, Chairman of the Board of Directors of Rach Gam Cooperative, said: “After decades of operation, the cooperative has consistently stood strong in the face of challenges and adapted to the market thanks to factors such as correct policy direction, effective management, the ability to meet the market’s changing needs, and the exploitation of the advantages of the inland water transportation industry in the region to create a breakthrough in business…”

Rach Gam Cooperative has been gradually gaining a foothold in the logistics market within the system of ports on the Tien River, Hau River, and more. Chairman Tran Do Liem revealed, “We proactively approach foreign enterprises looking to invest in Vietnam to demonstrate our capabilities. Building trust with them took 1 – 2 collaborative efforts. However, to cooperate with those who have higher qualifications, we must first be professional and establish our brand in the Vietnamese market.”

Since its inception, Rach Gam Cooperative has gone through five development stages. Stage 5 is when the cooperative integrates into the international economy. Rach Gam recognizes that with a “wooden boat” mentality, it would be challenging to go far, so it must connect and strengthen its power.

Over the past nearly 45 years of operation, Rach Gam Cooperative has received numerous prestigious awards from the Party and the State, including the title of Labor Hero during the renovation period, Independence Medals of Grade III, and Labor Medals of Grades I, II, III, etc. It has also won the “National Product Quality Cup” (2013, 2014), the “2017 Integration Product/Service,” and many other valuable awards.

The country is participating in significant Free Trade Agreement (FTA) negotiations, particularly CPTPP and EVFTA. As a result, Rach Gam Cooperative is making every effort to align with these international agreements. Accordingly, Rach Gam is constructing a logistics chain connected to ports, cargo handling, and cargo inspection.

“Rach Gam must establish a system to capture a significant market share in the logistics chain; only then can we remain robust. To survive and thrive, we must innovate; otherwise, we will lag behind,” emphasized Mr. Tran Do Liem, Chairman of Rach Gam Cooperative.