After nearly 20 years of development, Truong Thanh Furniture Corporation (TTF) has asserted its leadership in the Vietnamese wood industry by promoting technological applications to business, improving production techniques and constantly upgrading product quality, and taking initiative of material sources. Reporter Anh Dao has an interview with Mr Vo Truong Thanh, President and General Director of TTF.
Could you briefly introduce remarkable achievements TTF has made in recent years? How do these achievements mean to the development roadmap of TTF in particular and of the Vietnam wood processing industry in general?
TTF Group was developed from a small processing factory established in 1993 in the Central Highland province of Dak Lak. After nearly 20 years, TTF is a multi-business group with over 7,000 employees and eight factories in Ho Chi Minh City, Binh Duong, Dak Lak and Phu Yen provinces with a total area of 34 ha. Besides, TTF built European standard factories to ensure safety for workers, machines and equipment imported from Italy, Germany, Japan and Taiwan.
Starting with simple processing, TTF is now a leading supplier of wooden products in Vietnam. The group’s products are of diverse styles and designs, solid structure and high quality; thus they easily penetrate choosy markets like the United Kingdom, France, Germany, Spain, Finland and Japan. After the secondary equity offering in late 2007 and the official listing on the Ho Chi Minh City Stock Exchange (HOSE) on February 18, 2008, TTF expanded its capacity and financial resources to become one of three ASEAN-largest companies in terms of forestation and wood processing before 2012.
In 2010, riding out economic instabilities, TTF retained a stable growth with consolidated revenues of VND2,150 billion, up 13 percent from 2009. TTF outstandingly studied and successfully developed new techniques, especially high-tech flooring boards for the domestic market in July 2010. TTF’s high-tech flooring board is produced by Japan’s advanced technologies and satisfied with European quality standards. This natural, environment-friendly line is beautiful and luxurious. The price of this product is also affordable.
In addition to impressive business results, TTF is also a pioneer in forestation. We not only responded to the government-backed programme of growing 5 million hectares of forests but also invested in planting 100,000 hectares of forests in two provinces of Phu Yen and Dak Lak. The group started exploiting its forests in 2010 with the first 300 ha but the area to be exploited will reach 2,000 ha a year from 2015. In the past years, TTF has to import 80 percent of timbers but the group expects to take the initiative of material sources from 2015.
TTF also expressed its determinations to carry out the mission of “For Evergreen Earth” by cooperating with Jatro Company to plant 100,000 hectares of Jatropha trees in Vietnam from 2011. This facility will supply input materials for environment-friendly bio-fuel (bio-diesel oil). This project also created jobs for a lot of people.
TTF has also joined hands with GTZ Organization of Germany to establish a vocational training centre for wood processing in Dak Lak province, aiming to deliver knowledge and skills of all industries for all companies in Vietnam. Apart from training for the community, TTF workers also have a better opportunity to know better skills and techniques. We are proud of our professional designers (we now design 80 percent of models).
TTF’s today achievements clearly evidenced the new momentum to effectively exploit potentials advantages of the nation. In the deepening integration period, we will endeavour to make your own most solid platform to continue to turning out best products, helping the Vietnamese wood industry to heighten its position on the international arena.
Your company was very successful with export markets in 2010 but the sales in the domestic market also climbed by 30 - 40 percent. Would you mind telling your success story? What is the development orientation of TTF in the future?
We had domestic market development strategies when we made a debut but at that time the Vietnamese economy was underdeveloped. In recent years, the Vietnamese economy is large enough and strong enough and we think we should tap local potentials. Particularly when the global economic crisis wrecked on global economies, we had programmes for deep penetration into the domestic market. To suit domestic characteristics, TTF plans to build a new factory to turn out affordable products for Vietnamese consumers.
In the coming time, TTF will primarily focus on wood processing, reforestation and real estate. Specifically, we will always spare 70 percent of our resources for core business lines: reforestation and wood processing. We will strive to retain the leadership in export wood processing in Vietnam. We will boost domestic sales to account for more than 30 percent of our total revenues. We will strive to become a reliable supplier of standard, toxic-free wood, slicing planks, plywood and woodchips for customers. More importantly, we will use every effort to popularise our brand in the world market, starting with retail systems in the United States, France and the United Kingdom. We will continue expanding our forest-growing project in Vietnam. From 2015, we will exploit 200,000 - 1,000,000 cubic metres of timbers a year.
Anticipating difficulties in 2011 and following years, we will be precautious with investment decisions relating real estate. However, we will try to act in the right time. We will kick off our 56-ha residential zone in Nhon Trach district, Dong Nai province in April 2011. This project will add wings to TTF’s multi-business policy. Besides, TTF will build furniture stores, commercial centres and apartments, office buildings in Phu Yen and Binh Dinh provinces, etc.
As the Chairman of Binh Duong Wood Processing Association, could you talk about present advantages and challenges of wood companies?
At the present time, the Vietnamese wood processing industry is holding a competitive advantage because pays for Chinese workers are higher and Vietnam’s export markets are showing signs of recovery, especially the European markets.
But, challenges posing to wood companies are high interest rates in combination with rising prices of materials and antidumping policy from importing countries which raise barriers to protect domestic production. Markets may shrink.
What should Vietnamese companies do to create high-valued and products with high competitiveness on both domestic and international markets?
The Vietnamese wood industry requires stable input supply to attain sustainable development. In Vietnam, to accelerate reforestation to create a stable supply source of raw materials, we need capital for a long-term investment. However, access to capital sources is now very difficult. Thus, companies need supports from the Government to approach soft loans. To compete with foreign rivals, Vietnamese enterprises need to invest in modern technology to churn out new high-quality products. Besides, they also need strengthen corporate governance to optimise operations like economising materials and energy, etc.
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