Bien Hoa Sugar: Worth pioneer role
Overcoming year 2013 with a lot of difficulties, Bien Hoa Sugar is gathering all resources to maintain and develop the role of Viet Nam leading sugar brand.
Low profit because of “fair play”
Being the pioneering enterprise in sugarcane industry in 45-year development process, Bien Hoa Sugar Joint Stock Company (HOSE: BHS) has built a strong brand in Viet Nam market. In present, Bien Hoa Sugar is leading on sugar business output in the country.
During consecutive 4 years, from 2009 to 2012, BHS’s profit has gained over 100 billion dong but surprisingly in 2013, it decreased by approximately 50 billion dong, 30% compared to 2012 although consumption output in the year still obtained 175,000 tons, the highest level against enterprises in the industry.
Mr Thai Van Chuyen – CEO of the company, who has many-year attachment to sugar industry in various roles, said that business result in 2013 of Bien Hoa Sugar was declined strongly originated from two reasons. Firstly, local and world sugar price was decreased sharply (redundant crisis cycle from 2011), therefore, although it has closed big contracts with customers including output and fixed price from the beginning of the year, several partners still cancelled their receipt of goods. For customer interest as well as long-term relationship, the company played fairly and accepted to extend the receiving time and modified a part of selling price to share difficulties with customers in economic period when it was not really prospered. This was appreciated by many partners. In addition to such “special” sales policy, the second reason is that from the beginning of the year – based on the signed contracts, BHS stored goods on its own to ensure sufficient output as committed while delivery goods and selling price were decreased against the schedule. As a result, BHS’s profit has adjusted significantly in 2013.
However, Mr Chuyen thought that business result in 2013 is general situation of all sugar enterprises, but for BHS, it has remained customers, market share and obtained proper profit. This is the most important advantage. BHS’s advantages are not only maintained but also acquired new development steps. Those advantages will help the company strive to keep Viet Nam leading brand role, provide good for health products and nutritional needs to consumers. Create the premise to develop into countries in the Southeast Region. Discussing with us, Mr Thai Van Chuyen passionately told the best things of Bien Hoa Sugar in current market, in details, BHS is the unique enterprise in the country with diverse product chain (sugar in kg, industrial sugar, bag sugar, sugar candy, bullet sugar, vitamin sugar, cake sugar, stick sugar, brown sugar…) meeting customers’ diverse needs and the enterprise that has the most complete distribution system compared to units in the same industry. Bien Hoa Sugar selling price is always higher than other firms but accepted by customers and consumers thanks to the best quality determined from many years.
Bien Hoa Sugar factory’s view
Being the unique unit that owns Japanese-technology fine sugar factory, possible to produce annually with stable and high quality but not dependent in material areas like other sugar firms. This is one of the advantages that helps BHS determine its brand quality in many years.
Furthermore, BHS also has the position adjacent to big consumption areas such as Binh Duong - HCMC – Dong Nai Industrial Parks, therefore, sales force can access and serve customers quickly together low and competitive transport cost especially in the situation that transport cost is now increasing concurrently.
Concentrate to reduce price
In the short term, in 2014, the company will focus on solutions of reducing product price, raising competitiveness, extending market share, whereby raise profit edge in the context that sugar price in the market is still low. The company’s goal this year is to sell 175,714 sugar tons, slightly increased against previous year; production output acquires 175,651 tons. Turnover result gains 2,634 billion dong, slightly increased 10% against 2013 but pre-tax profit will increase 63% up to 82,2 billion dong.
Mr Chuyen told that currently the company has 2 sugar factories with 6,500 tons/day capacity in Tay Ninh and Tri An (Dong Nai), 1 400 tons/day-fine sugar factory in Dong Nai and 11,000 ha material area in which there are 1,000 ha under the company’s ownership, the productivity acquires about 70 tons/ha. This is considered as the level equal to average harvest productivity in Thailand (75 tons/ha), the world leading sugar export country.
Bien Hoa Sugar products come out of oven
In the coming time, Bien Hoa Sugar’s strategy is to focus to improve material area investment management process through seed selection, earth-work, fertilizing, care technique, especially, invest irrigation system consistent with each area to raise productivity, simultaneously, reduce price. It will also invest automatic harvest machine with 800 tree tons/day capacity that will help decline labor effort, limit material loss and improve sugar quality after harvest
Moreover, product diversity strategy will be also maintained. In which, speed up new products such as bag sugar, vitamin sugar, cake sugar that the market loves and sells very well
Cooperate to take full advantage
The Chairman of Bien Hoa Sugar, also keeping many key roles in other companies under Thanh Thanh Cong Group (ThanhThanhCong) such as Tay Ninh Thanh Thanh Cong Sugarcane (SBT), GIa Lai Electricity (GEC), is quite confident about that Bien Hoa Sugar will participates in this Group’s chain of products production and distribution regarding sugar. Mr Chuyen thought that the cooperation and development is a general trend of modern economy. BHS’s participation in Thanh Thanh Cong is not out of such trend. The Group has many units operated in sugarcane field, thus, sharing experience on management, science and technique, cost reduction, taking mutual advantage …helps all members enhance operational efficiency.
He said that in 2013-2014, common programs about sugarcane harvest – fell have helped units under the Group acquire CCS level of over 9 in the first time, one of extremely feasible signals, showing that all units are in the right way. However, Mr Chuyen determined that no cooperation among members under the Group is to control the market necause current sugar market is subject to many factors at home and abroad so some enterprises under Thanh Thanh Cong Group have not enough force to do so.
Not only trying to maintain and develop present advantages, but also BHS is estimating ambitious plans to improve its competitiveness and get sustainable development in the future.
Dan Thanh - Cong Ly
