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Economic Sector

Last updated: Thursday, November 16, 2017

 

Many Firms Opt for Bold Business Plans

Posted: Thursday, February 16, 2017

In 2017, many Vietnamese companies have daring business plans to catch new opportunities in the year and beyond.

Boosting exports and increasing added value
To grasp opportunities from new trade agreements in 2017, many companies are focusing on expanding production capacity, enhancing productivity and increasing added export values.

Mr Tran Van My, General Director of Scavi Phong Dien Co., Ltd affiliated to the Scavi Group Joint Stock Company, one of foreign-led garment and textile companies ranked among the Top 500 largest companies in Vietnam in 2016 (VNR 500), said, Scavi Phong Dien is pushing up construction of a specialised industrial zone for garment and textile industry, the first of its kind in Vietnam, in Phong Dien Industrial Park (Hue City). The zone was built on its fifth plant of the company.

He said the specialised industrial zone for garment and textile industry was kicked off after the company successfully piloted this model in 2015 and 2016 at Phong Dien Industrial Park. The company reported the pilot to the Government and worked with the Ministry of Industry and Trade on the project. If it is approved by the Government, the company will complete investment for this zone and start operation in the second quarter of 2017.

My said, once operational, the project will connect manufacturers, from inputs, accessories, fabrics for design, prototyping and export production. This closed value chain will help boost up exports, brands, positions and names of Vietnamese garments and textiles on the world.

“The export market is difficult though, it is still potential. Vietnam’s garments and textiles are popular in the world but local firms mainly do outsourcing. With this project, we plan to connect most of private garment and textile companies which will generate export value of over US$6 billion a year and provide jobs for over 36,000 workers,” said My. The project will help draw FDI capital into the garment and textile sector. At present, many foreign garment and textile companies want to invest in Vietnam and they are waiting for clear connection and coordination mechanisms like specialised industrial zone model.”

Not only big companies are interested in strategic investments but start-ups are also making efforts to realise high-tech export projects.

Mr Nguyen Dinh Nam, General Director of VP9 Vietnam Company - an internet TV camera manufacturer and exporter, said, VP9 Vietnam targets at revenue of over US$300 million from smart technology products in 2017, of which exports will account for 80-90 per cent.

"With core ultra-integrated video transmission and processing technologies, Vietnam is a place where the first Android-powered smart camera in the world was made with the aim of replacing conventional cameras and advancing the era of internet of things. This smart camera supports millions of Android applications. More proudly, this product was made by a Vietnamese company. This product has caught the fancy of many partners around the world. We plan to expand exports to major markets like the US, Europe and Japan," Nam said.

Expanding domestic market share
According to experts, global economic uncertainties coupled with potential policy changes under the US President Donald Trump administration or Brexit are signals of protectionism in major economies.

Dr Le Thanh Tung, author of the Annual Vietnam Economic Report 2017 released by Vietnam Report Joint Stock Company, said, those pressures will change global supply and demand and considerably hurt Vietnam’s exports in the coming time. Companies must focus on domestic markets to develop.

Authors of the research report said that many companies show their targets for bigger markets shares their business plans by expanding distribution channels and strengthening brand names.

The evident testament to this trend is the upgrading of distribution channels by State-owned enterprises like Viet Tien Garment and Saigon Co.op as well as with by private brands such as thegioididong, FPT, Vingroup and Vinamilk. These are the most persuasive examples to the success in distribution system expansion, market share increase and profit growth.

"This impressive success is based on an expansive product distribution system and arranged as a matrix all over urban and local areas in Vietnam. Thus, product trading and distribution is smoother and easier than ever,” said Dr Tung. He cited the report and surveys that most big companies will increase investment in 2017-2018, with 32 per cent with intention of boosting investment by over 50 per cent for business operations and distribution channel expansion.

PV








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