Business results bad

Dang Quoc Hung, Chair of Kim Boi Fine Arts and Handicrafts Company, spent the whole morning visiting Vifa Home, a wooden furniture and interior decoration trade fair held in HCM City.

A trade fair was also held one year ago, where all the booths of the exhibition center was fully occupied. Meanwhile, a lot of booths remained idle at this year’s trade fair, which lessened the enthusiasm of consumers of distributors. Tens of enterprises, which always participated in previous years’ trade fairs, refused to attend this year’s event.

Hung also did not have a booth at Vifa Home, though he is the chair of three enterprises in Tra Vinh, Ben Tre and HCM City. The revenue of all the three companies decreased sharply by 50 percent in the first nine months of the year in comparison with the same period of 2010. Hung does not think that the situation would be better in the last months of the year

Nguyen Thi Phuong Loan, Head of the Design and Business Division of Danh Moc Company, which specializes in making kitchen cabinets and pre-engineered kitchens, said that the company’s turnover has dropped by 30 percent in comparison with the same period of the last year.

However, Loan hopes that the situation would be better in the fourth quarter. Those customers with average and above average income now tend to use the products with modern materials. Therefore, the company has been concentrating on making this line of products.

“Previously, the company focused on developing high grade products. However, after surveying the market, we have decided to focus on developing pre-engineered products which allow saving 40 percent,” Loan said.

While high grade products have the sale price of 10 million dong per square meter on average, pre-engineered products have the price of 5.2 million dong per square meter only.

Difficulties don’t make businesses shrink

In a market economy, someone’s difficulties could be the opportunities for others. Analysts say the producers of food and drink, children’s clothes, stationery and consumer plastics all expect a good year end sale season.

Le Thi Thanh Lam, Deputy General Director of Saigon Food, has noted that Vietnamese people now tend to shorten the Tet celebrity time and tend to use ready made food. Therefore, Lam said the company plans to launch 14 new products to satisfy the demand.

Lam said that though the demand is low, she still can see her opportunities. In general, enterprises only provide the Tet gift baskets which comprise of sweets, wine and tea, with no frozen food. Therefore, Lam plans to design the gift baskets with food in the Tet sale season.

The enterprises, which once competed fiercely with each other, now decide to sit together to share profits.

Huynh Van Cuong, Chair of Nam Vinh Company in Binh Thanh district of HCM City, said that in order to ease the difficulties, the company is joining hands with other local businesses to share the labor force and business relationships.

“In the past, we specialized in making pre-engineered steel. However, since the products have been selling slowly due to the interruption of a lot of construction projects, we have shifted to do the outsourcing for other enterprises,” he said.

“We only lend workers to other enterprises and we will take them back when necessary,” he added.

A director of a real estate firm said that the company is struggling to survive. It is trying to sell products to stop loss, withdraw capital from big projects. Especially, the company has accepted the civil engineering projects, or buying houses for reselling for profits.

Source: TBKTSG