Interview Mr. Le Huu Hung, Chairman of the Board of Directors of Hung Duy Import – Export – Trading – Industry – Service Co., Ltd (Tay Ninh)
In the current difficult period, many enterprises face many risks, including financial risks, due to their dependence on loans from banks. After all, there are also enterprises who, by knowing “Depends on your ability to work”, have overcome the challenge and still retain their position as a leading enterprise in their locality.
Hung Duy Trading – Technology – Service Co., Ltd in Tay Ninh province is one of such cases. Mr. Le Huu Hung Chairman of the Board of Directors shared with TBK – TVN his experiences and some concerns.
Sir, as a multi-industry enterprise enterprise with wide “coverage” throughout Tay Ninh province, Hung Duy must have been under a lot of pressure during the recent difficult period?
– To say Hung Duy we are not affected by the crisis or difficulties during this time is not really.
In fact, each locality has different characteristics. In Tay Ninh, enterprises invest in real estate very little, and medium and high-income agricultural enterprises are more, so the impact of the economic crisis is not great.
Each enterprise has a different way of dealing with difficulties. It is important to know “Depends on your ability to work”. Hung Duy Company has borrowed capital, but the structure of loans on equity is low and only borrows working capital, so it can be financially proactive and less affected.
Unlike many multi-industry corporations in Vietnam that have had many difficulties and even “collapsed” even which I think is the main internal reason, Hung Duy’s multi-industry business has the advantage of getting one to compensate for the other, but it is only one factor, the basic is the process of building a brand and financial reputation.
One of the arduous problems of most manufacturing enterprises is inventory. Hung Duy is no exception?
– Hung Duy has very little inventory, currently the company has 2 tapioca starch processing factories (capacity of 200 tons of tapioca starch/day/factory), exporting over 50,000 tons of food flour every year, achieving high sales and high budget payment in the “Top of the province”. We are proud to do that because Hung Duy’s product brand has a strong foothold in the market.
In the field of building materials business, Hung Duy is the exclusive distributor of all construction steel products of Vinakyoei Steel. Hung Duy is also a distributor of consumer goods for well-known brands: Unilever, Vinamilk, Kinh Do, Bourbon, Abbott, Castrol, Kimberly – Clark, .. nearly 100 trucks, including about 60 trucks with a tonnage of 1-40 tons (including containers), and nearly 40 trucks for delivery, stable sales, and delivery throughout the province. In addition, Hung Duy also trades in petroleum, first of all, to provide fuel for the first number of vehicles of the company, in order to avoid losses due to the peculiarities of the petroleum business. In general, we are very interested in building a sustainable brand, so how to minimize the risk is especially important.
The problem of building up the area of tapioca starch materials to supply factories?
– Unlike many enterprises producing and processing agricultural products, Hung Duy does not have a raw material area and does not grow tapioca (cassava).
We buy all from farmers, Tay Ninh is the locality with the second largest tapioca area in the Southeast region (about 40,000 hectares with an output of more than 1 ton of fresh tubers). The supply of tapioca tubers from farmers in Tay Ninh to our processing plants has never lacked, the problem is that we always purchase and sale agreement, when buying is “Cash on delivery” immediately, no debt, no premature purchase, insufficient purchase, this makes people more excited, income is also more stable because there is no fear of “loaning off debt”, but on the enterprise side, there is always a working capital source available should be paid immediately, not to owe any customer. Hung Duy has overcome the challenge, the difficulty is partly because of this way of doing it.
Tapioca is one of the two main crops (along with rubber) of Tay Ninh. So, does the local government have any policies or programs to support enterprises? And do enterprises in the industry have the same link to support each other in production and compete in the market, sir?
Our traditional market is China, Indonesia, Taiwan, Bangladesh… But 70% is in China. We are promoting new search and expansion to Europe to diversify export markets. Currently, we are having small orders to go to some European countries where they are quite easy-going because they are less bound by some standard requirements, food safety and hygiene issues… although we already have ISO 9001:2008 and some other standards. With large companies in Europe, they require large quantities with stricter standards corresponding to that we need to have large factories with large capacity, synchronously invested. However, this is the “stumbling block” point.
Because, so far, the Provincial People’s Committee has always controlled the expansion or construction of a large capacity factory (only 200 tons back). The cause of the problem is that in the past, the province had a general raw material resource, the capacity of the factories was calculated to match the planned material area. Now, if approved to increase capacity, the province is worried about where to get raw materials.
However, as mentioned, in Tay Ninh, there is a “second raw material area”, which is the area bordering Cambodia, which is known to account for about 50% of the province’s current raw materials. This issue, not only us but many enterprises in Tay Ninh have had suggestions but so far have not seen any positive signals. However, a group of leading enterprises in the province, including Hung Duy, are continuing to “advise” the leaders to find the fastest and most effective way to support the enterprise community in this regard, this is also a way to develop and expand the export market of tapioca starch (and rubber) to this potential European market. Our group is also promoting the establishment of “Tay Ninh Tapioca Industry Association”, creating a common playground, having a common voice and protecting each other in the international market.
Source: http://vneconomy.vn/