Vietnamese and the “$1billion business ambition”

VietNamNet Bridge – Despite the current big difficulties, a lot of Vietnamese enterprises still have been nurturing the ambitious plan of obtaining the turnover of one billion dollar.

M&A, the shortcut to $1 billion turnover

M&A, the shortcut to $1 billion turnover

The Hung Vuong Seafood Company hopes that its export turnover by 2015 would account for 30 percent of the total seafood export turnover, which is estimated at $3 billion. If so, it would get $1 billion in turnover.

In order to do that, Hung Vuong has been gearing up with its plan to expand its business scale by taking over other enterprises in the fisheries industry.

In 2010, Hung Vuong bought 51.08 percent of AGF stakes, thus getting benefits from AGF’s processing factory system, the aquaculture and the export markets.

Analysts, having recalled the deal recently, commented that Hung Vuong then made a wise deal. Hung Vuong has been imposed the high anti-dumping tax rate of 7.7 US cents percent per kilo when exporting its products to the US, while AGF bears the much lower tax rate of 2 US cents per kilo.

Hung Vuong also bought the Viet Thang feed factory, which now serves as an important link in its production chain, helping Hung Vuong take initiative in arranging feed for fishes, save money and control the substances in the feed in order to be sure that its products can meet the standards set by the importers.

Hung Vuong has also jumped into the field of shrimp hatchery for export. The plan was kicked off by the purchase of the Ben Tre Forestry and Fisheries Company. With the deal, Hung Vuong has inherited the 500 hectares of shrimp faming area from the company and the close farming process.

Most recently, Hung Vuong has bought 5 million more shares of Sao Ta Food Company which had 170 hectares of shrimp farming and made the products for the US and Japanese markets.

Core business field would bring billions of dollars in turnover

Le Phuoc Vu, President of the Hoa Sen Group, has also made a strong statement that Hoa Sen will “reach to a pinnacle” in some years.

The sheet metal group plans to obtain the turnover of one billion dollar by 2016-2018. Vu said that in the steel industry, the development of enterprises would depend on three factors – the production scale, technology renovation and risk management. Meanwhile, Hoa Sen has been good at all the three.

Established in 2001, it took Hoa Sen eight years only to become the leader in the color galvanized iron market.

Meanwhile, Le Nguyen Vu, the owner of Trung Nguyen Coffee Company, has been dreaming the “Vietnamese coffee dream.”

The coffee giant considers South East Asia as the “domestic market” in 2013, while planning to set foot on the US land by buying some coffee roasters and opening cafes in Seattle, New York and Boston.

Trung Nguyen has its reasons to be confident about its expansion plan. In 2012, it got $200 million in turnover, up by 32 percent over 2011. It is expected that the turnover in 2013 would be double thanks to the rising demand for packed coffee from South East Asian and Chinese markets. If the current growth can be maintained, Trung Nguyen would get $1 billion in turnover by 2016.

Analysts have commented that in order to obtain $1 billion in turnover, Vietnamese enterprises would have to target the international market, while they cannot rely on the domestic consumption. Meanwhile, it’s not easy to penetrate the foreign markets.