With WTO accession, Vietnamese businesses have to compete with foreign counterparts on the home court. How does the retail distribution network prepare for the challenge? VIB Forum reporter interviewed Mr Nguyen Thanh Nhan, Marketing Manager of Kinh Do – North.
Please tell us the achievements of Kinh Do – North in the past five years?
Kinh Do – North was established in September 2001. After five years of development, it has recorded major progress, expanding markets not only in Northern provinces but also in foreign countries, with products and brands increasingly marketable and well-known. In 2001-2006, the turnover was VND1,329 billion, with an after-tax profit of VND128 billion and an average growth rate of 30 per cent. In 2006 alone, the turnover was VND420 billion, 25 per cent more than 2005 and with an after-tax profit of VND50 billion, up by 50 per cent. Kinh Do – North isregarded as the most successful company in confectionery. The company has developed a distribution network with bakeries, supermarkets, agents and retail shops in 65,000 locations nation-wide including 13,000 of the best locations. Evidently, Kinh Do has the comparative edge to compete with foreign partners as Vietnam joins WTO.
Do you have any fear that Vietnamese products will be subjugated by imported products?
Competition is inevitable and we are not afraid of it. Kinh Do and other Vietnamese confectionery companies already have stable distribution networks. Another advantage is that Vietnamese companies understand the demand, culture and taste of Vietnamese people. Furthermore, Vietnamese potentials and technology in confectionery and food processing are second to no country in the region and can maintain the market share. No foreign companies can conquer the market overnight.
Besides the domestic market, Kinh Do products can be exported to the US, Japan, China, Singapore, Thailand, etc. Several foreign importers have confirmed their long-term cooperation with Kinh Do since Vietnam officially joined WTO and PNTR was endorsed. It will be a great opportunity for Kinh Do as the economic integration is fully in line with the business expansion of the company. We have many modern production lines, meeting the criteria of food safety (HACCP) and ensuring the credibility of local and foreign distributors.
I believe that Kinh Do – North is also successful in stock market, can you elaborate further?
On August 12, 2004, Kinh Do – North officially started its listing on the stock market. It was a breakthrough to strengthen the management system with transparency and participation of the society in business activities, encouraging all stratas of the people to participate in investment and business management. As a result, the company has recorded remarkable progress. After the listing, Kinh Do – North stocks (NKD) are considered as most attractive with ever higher prices in transaction. In the past two years, the stock price increased four times. The payment for dividends is 18 per cent a year, among the highest in the Vietnamese stock market. It is a clear manifestation of the potentials and profit-making of Kinh Do – North and Kinh Do in general.
What is the development strategy of the company in the coming years ?
In 2007 and following years, the company will continue the lead in confectionery with a growth rate of over 20 per cent, applying modern technology, expanding production, building Tribeco factory for the Northern market, and diversifying products with main products of high-nutrition. Human resources development will be upgraded to increase the quality and competitiveness in management and professionalism, strengthening the distribution network and expanding export markets.
Luu Hiep
Vietnamese
