Faced with the impact of the Covid-19 pandemic, many enterprises have actively adapted, seizing new opportunities for development; many initiatives have been implemented by enterprises; many adaptation and development strategies have been formed.

Production activities at Saigon Food Joint Stock Company.
Photo provided by the company

Adapting flexibility

The Covid-19 pandemic has pushed people and enterprises to tighten their belts. In order to stand strongly in the new context and realize the dual goals of fighting the pandemic and developing the economy, many enterprises have flexible management strategies to adapt to the new situation.

Le Tri Thong, Vice Chairman of the Board of Directors and General Director of Phu Nhuan Jewelry Joint Stock Company (PNJ), said that in the context that the general market dropped and many enterprises in the industry had to reduce their operations, even stop business, PNJ's sales still increased. This meant that the company gained more market share. In particular, in the retail sector, PNJ won praise thanks to the application of technology in the transition from the traditional retail model to the new one, which is combined with multimedia channels.

PNJ applied Big Data to analyze consumer trends, improved the camera system, applied AI to the production process, brought the camera system with AI application into the store to collect and provide data for analyzing customer behavior.

With that "breakthrough", in 2020, PNJ's net revenue reached more than VND17,500 billion, 21% higher than the plan. Consolidated profit before tax in 2020 was VND1,345.9 billion, 28% higher than the plan; brand value reached US$93.1 million, up 18% compared to the evaluation period of 2019.

In 2021, PNJ set a target of net revenue of VND21,006 billion up 20% compared to the result of 2020. Profit after tax is expected to reach VND1,230 billion, 15% higher than the same period last year. Dividend rate remained at 20%. Compared to the annual plan, PNJ completed 34% of revenue target and more than 40% of profit target after only a quarter of the time.

In the field of tourism, Mr. Pham Ha, Chairman of the Board of Directors of Lux Group, said that before the Covid-19 pandemic, 99% of the company's customers were international, with revenue always growing by 30% per year, workers always had work. But the pandemic prevented international visitors, forcing enterprises to change to focus on domestic tourism. Faced with that situation, Lux Group turned to building a separate segment for the domestic market, focusing on the mid- and high-end lines that are domestic tourists.

In 2020, despite difficulties due to the pandemic, Heritage Binh Chuan, one of 3 Lux Group yachts, still operated tours to serve regular guests in the Gulf of Tonkin, with 25 trips per month.

Lux Group also converted to a Holdings model to pick up foreign capital flows to expand its business and realize its ambition to develop a fleet of 30 yachts. It is expected that in 2021, three new yachts will be put into operation at Lan Ha, Nha Trang and Phu Quoc. At the same time, it encroaches on tourism, commercial and service real estate. Heritage Cruises' biggest goal is to run along the coast of Vietnam, creating new products for Vietnam's tourism by 2025.

More challenges

The Covid-19 pandemic continues to be complicated in the world and in the country, disrupting the global supply chain, affecting most economic sectors. Besides the advantages from positive growth results in 2020, Vietnam still faces many difficulties and challenges.

In particular, due to the impact of the Covid-19 pandemic, the price of imported raw materials from abroad increased because of the increase in sea and air freight.

Some places have signs of stockpiling to create scarcity, which also contributed to the price spike. In addition to price increases, at some times, production materials were also cut off due to the impact of Covid-19 and could not be transported by air or sea.

Speaking about this situation, Mr. Do Van Khuoi, Supply Director of Saigon Food Company, said that up to now, all production materials, from domestic to imported, have increased in price.

Of which, imported spices and additives increased by 5-10%, plastic materials for production increased by 15-70%, rubber gloves increased by 300%. Meanwhile, domestic materials such as rice and aquatic products also increased by 5 - 20% due to crop failure and reduced production. It is forecasted that prices would increase by 5-15% depending on each type of product in the first and second quarters, and may increase by 10-25% from the third and fourth quarters of 2021.

In order to cope with the situation of rising raw material prices, many enterprises, in addition to adjusting their sales and profit plans, must also consider solutions to find ways to cut costs.

At Saigon Food, according to Mr. Do Van Khuoi, the company was trying to find solutions to minimize costs, replace raw materials, find new suppliers with competitive prices. The aim is to prolong the time of price increase and increase the level appropriate to the market situation.

Sharing the same opinion, Mr. Truong Chi Thien, General Director of Vinh Thanh Dat Food Company, said that the increased input costs forced them to recalculate their business plans. This is a problem for enterprises because they have to calculate plans to balance the costs incurred, so that they would not make a loss and lose customers.