In 2021, the Covid-19 pandemic continues to develop complications, greatly affecting the economies of many partner countries of Vietnam. In Vietnam, the Covid-19 pandemic has been affecting many aspects of socio-economic life. Goods imports, exports, circulation, and transportation activities, and many production and service sectors and fields, including agriculture, were severely affected. However, in the first 6 months of 2021, Nafoods still recorded positive growth in net profit in Q2 and the first 6 months of 2021. This profit result is also the highest level achieved by Nafoods since its establishment.
What did Nafoods do in the first 6 months of 2021?
Never before has the business environment changed so quickly. In a world that is changed every day by technology, policy, social media, mergers and acquisitions, and cross-cultural influences, markets and consumers move so rapidly that we cannot imagine. At this stage, the world in general and Vietnam in particular still have to face more changes caused by the COVID-19 pandemic, and change is inevitable in order to survive.
As part of that general rule, Nafoods has been and continues to perfect the transformation of the whole system. The recent results show the initial success of the transition over the past 18 months. The transformation focuses on three main spearheads: business model, operating model, and risk management.
As for the business model, instead of focusing on the main business of self-produced products, Nafoods chose to shift to a service model for the agricultural ecosystem: providing sales and management services, quality management, logistics (inbound and outbound), and customer services for production partners in the same sector and small manufacturers; expanding the core agricultural product group, from focusing on five key fruits, gradually expanding to vegetables – tubers – fruits – seeds, increasing service value/sales per customer; and develop independent business units, who are responsible for their business results, thereby increasing the autonomy and ability to promote the business team’s creativity.
Also, during this time, Nafoods made specific changes in its operating model to promptly match the overall transition of the whole system. Specifically, in the prolonged pandemic situation, Nafoods chose flexible production management and business planning, operated under the governance-execution model based on 70% centralized and 30% decentralized, and implemented digital transformation & information transparency.
In parallel with a transforming business model and operating model, Nafoods focuses on improving the quality of risk management by proactively predicting and planning ahead of complex problems from customers, market, product, minimizing impacts from financial and liquidity risks, and flexibly investing in upgrading machinery and equipment, automating all production stages to ensure proactively stabilizing production and operating in all circumstances.
Be proactive with the scenario of production and business in the “new normal” condition, “Live with COVID” in the last 6 months of 2021
With the target that 100% of employees throughout the system are vaccinated against COVID-19 in 2021 and the production and business in the condition “the new normal” scenario is set up to operate in the spirit of “Live with COVID,” Nafoods expects the net revenue in the last 6 months of 2021 to reach over VND 850 billion, with net profit going over VND 40 billion, Nafoods aims to achieve a revenue target of over VND 1,600 billion, and make a profit of over VND 85 billion in 2021, 10-15% higher than the original plan set out in early 2021.
To achieve the target, Nafoods quickly built and planned to drastically deploy three main solution groups: Partner development, Quality management & core personnel development, and Stage 2 of Digital transformation.
Specifically, in the context of living with the pandemic with limited international movement, in order to achieve business efficiency, Nafoods chooses to build win-win relationships with business partners in the same sector. By banding together, we will overcome this difficult time with strength.
Besides, according to experience, quality management is also a decisive factor for success or failure in business activities. At this time, Nafoods chooses to invest in developing core personnel to implement quality management to meet the requirements of the market and demanding customers and improve quality management capacity through a cooperation program with IFC to implement the Food Safety program uniformly applied to 20 production facilities in the ecosystem.
Simultaneously deploying phase 2 of digital transformation, Nafoods will continue to improve its professional management systems and focus on building version 1 of the traceability system, allowing easy tracking from purchasing, processing, packaging, and exporting to customers.
“Each business will find a direction during the pandemic. Nafoods focuses on improving itself, setting specific goals and action plans to increase both quantity and quality each quarter. At the same time, Nafoods is also trying to form more partners in the industry to create a close connection, promote each other’s strengths, reduce competitive pressure & increase capacity to serve large orders.” – According to Mrs. Diep Thi My Hao – General Director of Nafoods Group.