Mr Vo Truong Thanh, CEO of Truong Thanh furniture Corporation(TTFC) talk to Vietnam Economic Times's Ha My abount the corporation's production and bussiness results over the last years.
TTFC was recorded among the wooden furniture manufacturers and exporter in Vietnam with the highest turnovers in 2006. Can you tell us reasons behind this success?
One of the three local-owned companies with the leading turnovers from wooden product export in 2006, we are very proud of this success and determined to obtain further development, competing with other very large-scale foreign-owned companies in Vietnam. TTFC has gained this achievement thanks to a number of factors as prestige, quality, techniques, design and personnel.Infact, with 5 factories, we have more orders year after year, not only from traditional clients but also from various new sources of customers generated by our relentless marketing efforts. That was due to our reputation in business with both established and potential customers. For the quality factor alone, this has been our focus for a long time, which helped us not only build trust among customers and increase annual turnovers but win a lot of domestic and international awards as well. It was this advantage that made our customers accept premium prices as compared to other companies in the industry. What is more, we have invested a great deal of finance and effort in researching and applying international technical and safety standards to our products.
Besides, our team of 23 designers is very active in researching and developing new products, creating greater added values in products and substantially increasing turnovers and profits. Last year, our sales consisted of 80% products of our own designs. Last but not least, we employ more than 5,000 workers and office staff, most of whom are young, dynamic and professional. They have continuously trained in professional knowledge and management skills to help process their tasks faster and better. Our sales team consists of more than 30 people, 5 of whom hold international MBA degrees and the rest university degrees in business, economics, foreign trade and foreign languages. They not only can communicate fluently in English, French, Japanese, but also know the wood processing techniques thoroughly. This helps provide feedback for customers within 24 hours.
What are the concerns ot Vietnam’s wooden furniture manufacturers and exporter at the moment?
The second concern is the local sources of materials. The wood supply from around the world is very abundant thanks to plantation programs pioneered by numerous countries, including well managed forests with FSC certificates. However, imported wood prices are increasing, which makes manufacturers less proactive in planning production schedules since the time to transport wood takes long, from 20 to 45 days for different countries. That’s why the plantation for wood is necessary. TTFC has been carrying out a 50,000-hectare forestation project. However, we have difficulties in getting suitable land and processing paperwork regarding land-use rights. In the Forestry Workshop last 8 – 9 May 2007 in Hanoi, we put forward many ideas regarding the assistance of the government to the private sector in the forestation projects, which were highly supported by related ministries and industries. Hopefully, this issue will be resolved in the near future.The third concern should the competition with foreign-owned companies in Vietnam. They came here with huge capitals and inherent modern wood processing technologies, mostly from Denmark, Malaysia, Taiwan, China, etc.
What are Truong Thanh’s advantages compared to other enterprises in the industry?
I would say they are:
- TTFC business prestige and brand to big buyers in the world.
- Ability to design wooden furniture.
- Ability to access various imported wood supplies, which are of legal origins and stable, since TTFC is a member of VFTN, a unit belonging to WWF.
- Being well-informed about international technical and safety standards, so our product quality is very high, ready to conquer any hard-to-please markets.
- Modern machinery imported from Italy, Germany, Taiwan, etc. with high efficiency and accuracy.
- The smooth-running quality management system ISO 9001:2000 (certified since 2003)
- The strict Chain of Custody for tracing product origins (certified since 2002)
- Two DBA degree holders graduating in the U.S. and Thailand, and eleven MBA degree holders graduating in Europe, Australia, etc. forming the frame of the corporation.
- The majority of production managers and leaders in the Board of General Directors is many years experienced in the wood processing industry.
- The comprehensive and versatile IT system, not only ensuring the confidentiality of business information but also assisting leaders in remote management and control of the corporation’s activities
- From 2007 on, TTFC is financially reinforced thanks to the issue of shares for strategic partners and the public through IPO auction on HoChiMinh City Stock Exchange. This would help us prepare wood stock better and earlier for the whole season, expand factories to increase capacity, and carry out forestation projects for several years to come.
How do you evaluate the operations of Vietnam wooden furniture industry in general and Truong Thanh Furniture Corporation in particular?
The wooden furniture industry of Vietnam is doing very well exporting to the world market. According to the Ministry of Trade statistics, the total export turnover reached approximately USD200 million in 2000, and amounted to nearly USD2 billion in 2006. In six years, the total export turnover is 10 times bigger. In foreign experts’ eyes, Vietnam has many competitive advantages in exporting wooden furniture and this industry is maintaining the world’s second highest growth rate. That is not to mention the fact that the China’s Government will impose export tax on wooden products, creating new favorable conditions for Vietnam’s wood-processing and exporting industry. So, the prospect of the world’s highest growth rate is firmly based. It was estimated that the export turnover of the Vietnam’s wooden furniture industry in 2007 would reach USD2.5 billion. TTFC’s share with the above-mentioned advantages would amount to USD45 million.