The "revolution" of self-renewal.

After the "test" of COVID-19, the economic recession seems to be an even more intense and unexpected test, catching many businesses off guard. How can businesses improve the quality of their products and services while keeping prices competitive? It sounds contradictory, but it's an essential requirement!

Businesses After the Pandemic Storm (Final Part): The Thanh Hoa Bird's Nest Production and Trading Company (Hau Loc) successfully connected its products to the Chinese market in early 2024, creating opportunities for the business to expand its production scale in the future. Photo: Minh Hang

Taking the initiative on the "life-or-death" line.

Despite a decrease in orders and revenue, Hong Duc Educational Equipment Joint Stock Company (Le Mon Industrial Zone) still provides stable employment for over 200 workers. Along with strengthening internal management to reduce production costs, the company focuses on diversifying and improving the quality of its products. The company continues to prioritize recruiting and training skilled workers, those with advanced skills, trend-setting designs, and strong marketing abilities.

Ms. Vu Thi Ngoc Anh, the company director, stated: “Educational products and equipment remain our company's strength. Along with updating and adapting to global trends, the company has hired experts to research, modify, and ‘localize’ the designs to suit the costs, body types, weather, and tastes of Vietnamese consumers. For example, in 2024, the I20 line of student desks and chairs is planned to be launched for retail distribution, giving consumers the opportunity to use ‘foreign’ designs at ‘domestic’ prices. Instead of imported European products costing tens of millions of dong, Vietnamese consumers can use these products for only 1-2 million dong. The advantage of the product is its flexibility in assembly and movement, suitable for various educational formats such as individual use, group study, discussions, or field trips…”

In the garment and footwear industries, while most businesses experienced order cuts, some maintained stable order volumes and even acquired new customers, helping them "hold on" and provide employment for their workers.

In the days leading up to the Lunar New Year of the Dragon 2024, 888 Co., Ltd. (Quang Xuong) is one of the few businesses where workers are still working overtime for an extra 1-1.5 hours per day to meet orders received for the first quarter of 2024. Although its main markets are the US and EU – partners most severely affected by the economic recession – in 2023, 888 Co., Ltd. still provided stable employment for over 1,100 workers. Its reputation for quality and timely delivery is what helps the company retain major distributors. Furthermore, to compensate for the reduced order volume in traditional markets, the company has diversified into several potential markets in Asia and successfully connected with eight new partners.

Mr. Duong Van Lam, Deputy General Director, said: “Currently, the company has confirmed orders until the end of Q2/2024. Since the end of 2023, we have been developing plans to gather samples, research additional machinery, and train workers to meet the requirements of newly received orders and effectively carry out new production plans.”

“Even in challenges, opportunities remain” – deep market understanding and optimism are the driving forces behind the continued efforts of businesses within the Thanh Hoa Seafood Import-Export Joint Stock Company ecosystem. “We analyze every negative impact and every opportunity for each key production area, analyzing developments week by week, month by month, and quarter by quarter, thereby developing appropriate strategies for each period,” shared Mr. Nguyen Cong Hung, Business Director of Thanh Hoa Seafood Import-Export Joint Stock Company, a subsidiary of the parent company.

“For the Italian, Spanish, and Portuguese markets, we have analyzed clams as an essential commodity because they are closely linked to the consumption habits and culinary culture of these countries. When the economy declines, these are also among the last items to be cut back. Therefore, we are confident that this is a sustainable consumer product, worthy of investment, maintenance, and development, and we expect to restore production after difficult times. The surimi fish cake industry, with traditional markets such as Japan, South Korea, China, Thailand, and Singapore, is also a popular and essential consumer product. Furthermore, it is a product with industrialized production, processing, and distribution, so the opportunities for consumption will be more favorable. These factors demonstrate the vitality of the industry, giving us the confidence to maintain it and to strive for even better results,” Mr. Nguyen Cong Hung further shared.

And, to "improve itself," the company has restructured its entire operation, from market, products, capital to adjusting labor accordingly. At the same time, it has extended the value chains in production and business. Instead of just purchasing raw materials, the company now has a clam farming area of over 500 hectares; and it has partnered with the Kim Son clam farming area (Ninh Binh) to build a raw material area certified with ASC for over 889 hectares of Meretrix Lyrata clams. This is the highest certification in the seafood industry, and the Kim Son clam farming area is currently the second largest clam farming area in Vietnam and also the second largest clam farming area in the world to have this international "Visa VIP" certification (after the Nghia Hung farming area - Nam Dinh in the supply chain of Lenger Vietnam Seafood Co., Ltd.). In the wood industry, the company has also extended the value chain to self-invest in raw material exploitation, while diversifying its wood pellet products...

By improving production processes such as using wood industry by-products as fuel, reducing energy consumption from coal, and lowering labor and repair costs, the company has reduced costs by 7-8% – equivalent to profits in previous years – enabling it to increase its price competitiveness compared to other businesses. Even during challenging times like 2022 and 2023, the company maintained a basic production volume of approximately 14,000 tons of clams, equivalent to revenue of 700 billion VND; 800 tons of fish paste and fish meal with revenue of 1,000 billion VND; and the wood industry achieved revenue of 500 billion VND, with projections of 700-800 billion VND in 2024-2025.

Adapt to thrive

Looking back, it's clear that in many industries and sectors, some businesses that were once well-known decades ago have now been "overtaken," or are even barely surviving if they haven't adapted to the recent major shocks. "To succeed, you must be ready to change with the times" – a saying I wholeheartedly agree with, shared by an experienced entrepreneur. Reflecting on reality, some young businesses, just starting out, have already achieved considerable success by adapting to the changing trends.

In the early days of 2024, Thanh Hoa Bird's Nest Production and Trading Company (Hau Loc), headed by Mr. Nguyen Van Tu, successfully exported its first order of bird's nests and steamed bird's nests to China - a market considered extremely large, especially for bird's nest products.

As a country boy, Tú's entrepreneurial journey was much more difficult due to a lack of knowledge, experience, and capital. Through continuous learning and personal effort, after 10 years, Tú has achieved considerable success. To date, his company owns 6 swiftlet farms and 300 affiliated farms in many provinces and cities, with 12 product lines under the Thanh Hoa Swiftlet Nest brand available nationwide, including: steamed bird's nest, dried bird's nest for export, bird's nest strands, refined bird's nest, etc., generating revenue of 18-20 billion VND per year.

Mr. Nguyen Van Tu shared: "Before and after the pandemic, many industries faced difficulties; but amidst those difficulties, many businesses also had opportunities to develop if they kept pace with trends, especially the food product industry related to health, where consumers prioritize affordability."

Thanh Hoa province aims to have the business sector contribute 65% - 70% of its GRDP by 2025. The business sector is expected to create jobs for approximately 500,000 workers. By 2025, the business sector's contribution to the provincial budget is projected to account for 65% of the total domestic revenue in the province.

According to Mr. Tú, in addition to always focusing on improving quality, branding, and price competitiveness, since the COVID-19 pandemic, the company has quickly embraced digital trends. Besides investing in building a website to promote products, the company established a dedicated media department specializing in online sales through e-commerce platforms such as TikTok, Shopee, and Sendo. With this approach, the company's revenue increased by 200% during the pandemic, creating a foundation for its current expansion of production and business. In 2023, Mr. Nguyễn Văn Tú was honored as one of 81 outstanding young entrepreneurs.

For Vietnam Agricultural and Medicinal Herbs Development Joint Stock Company (Thach Thanh), just as it was beginning to establish its brand in the market, the COVID-19 pandemic and many other difficulties struck. Confident in being the first to "pioneer" and now owning a 600-hectare raw material area in his hometown, along with analyzing consumer demand for essential oils made from medicinal herbs, especially lemongrass, young director Nguyen Huu Minh was determined to continue researching and seeking opportunities for survival and development.

“To create jobs, increase income for people, and create a positive impact on the communities living in and around the raw material area, the company has supported the establishment of production cooperatives, thereby reducing pressure on production and raw material care. Keeping pace with the trend of digital business and distribution, we have streamlined our office staff, focused on online sales personnel; and at the same time concentrated on in-depth research and development of new, specialized products to increase product value.”

Overcoming difficulties and starting from limited resources, the Vietnam Agricultural and Medicinal Herbs Development Joint Stock Company now has 10 production facilities, ensuring the consumption of lemongrass leaf raw materials from Thach Son, Thanh Minh, and Thanh Vinh communes, covering an area of approximately 600 hectares. The company currently has 10 essential oil product lines, including one product that has achieved OCOP 3-star certification, creating jobs for 30 workers. Workers in the essential oil production cooperatives earn up to 150-200 million VND/person/year from "waste" – lemongrass leaves, which had been discarded for many years.

Mr. Do Dinh Hieu, Director of the Vietnam Federation of Commerce and Industry - Thanh Hoa - Ninh Binh Branch, commented: "It's difficult to list all the challenges facing businesses in the current context. However, the COVID-19 pandemic, as well as the current fluctuations, is also an opportunity to test and filter, a high-stakes 'test' for businesses. This is also an opportunity for a 'major screening,' eliminating weak and ineffective businesses, to create a fairer and more transparent business environment; at the same time, the market will see closer and more sustainable joint ventures and linkages in production - management - distribution - reinvestment. A restructuring of businesses is like a 'self-examination,' allowing them to identify the diseases that need 'treatment' early. Through this screening, businesses that survive and stand firm will certainly seize new opportunities when the market recovers in the future."

Minh Hang

Source