Double-digit growth thanks to the own way of enterprises from processing and exporting

Mr. Nguyen Dang Hien, General Director of Bidrico.

As one of the leading beverage manufacturers in Vietnam that has exported to 14 countries with the strictest standards in the world, what does Bidrico have direction to keep double-digit growth, Sir?

While most industries, including the food industry, face many difficulties in both domestic and international markets, due to rising input prices, Bidrico also suffers from these impacts. However, we choose another way to increase market share and keep growth momentum. Two main factors driving Bidrico's revenue growth are outsourcing and export. These two sectors have grown very well, contributing greatly to the company's revenue. In the first 6 months of 2023, Bidrico grew by more than 24% compared to the same period in 2022 and in July this growth also reached more than 26%.

In the difficult context, we must have our own way to survive, when input prices increase, the cost has been increased, but it is not easy for the food industry to increase prices. For only one bottle of water, if the price increases by about VND 200, the customer will leave us immediately. In a difficult situation, our company finds relationships with foreign enterprises to perform outsourcing, along with promoting exports to new markets.

How is the current export processing rate of Bidrico's, Sir?

Previously, Bidrico's export processing rate accounted for only about 15% of the company's overall sales. However, from the beginning of 2023 until now, we have shifted to increase the field of export processing, currently the processing rate of the company accounts for over 25%. Foreign companies that outsource pay close attention to our premises, machinery, equipment, people and standards meeting their standards; they visit our factory many times… it takes about 6 months to close the contract. Currently, Bidrico processes about 3,000 products a month. It is expected that by this September, the company will process about 9 million products.

In order to process for foreign partners, in addition to having machines, factories and premises, the company must create a reputation for product quality and modern production technology. Currently, Bidrico has invested in 12 automatic production lines; exporting finished products under the Bidrico brand name to a number of countries, including China as a new market. Recently, we have signed a contract with a Chinese enterprise and start to perform an export contract with 4 containers a month.

Besides exporting, Bidrico also succeeded in localizing raw materials instead of importing, can you share about this issue?

Previously, Bidrico mainly imported some high-grade raw materials for production. But when it was too difficult, we took into account localization, finding materials from the domestic market instead of importing. For example, some fruit juices, which we had to import from Israel, the United States... The current localization rate is about 40%, which helps us reduce prices, reduce import costs and tariffs..., gradually increase the localization rate in the coming years. In addition, in the near future, we are also considering buying another companies in the food and beverage industry to expand the field of beverage production and export.

In the context of a difficult market, in your opinion, what should Bidrico in particular and enterprises in general do to boost the export of goods?

Currently, the domestic market is going down, so in my opinion the way out for enterprises is to boost exports. Meanwhile, in the European market, they also cut spending and reduce export orders, so enterprises must look for more peaceful markets, markets less affected by the Russia-Ukraine war, for example China, India, Australia... to find the exit. Vietnam has an advantage in exporting rice. But enterprises consider the time to export to avoid selling unfair prices when export prices are rising. Many countries around the world often have recommendations for people and enterprises about agricultural products, to avoid rescuing, planting a lot and then cutting down. Vietnam should also have recommended the people.

In the context that the world food supply chain is experiencing many positive changes, along with the advantages of natural conditions associated with the development orientation of high-tech agriculture, agricultural products and processed foods of Vietnam are present in over 180 countries and territories. However, the world's leading import and consumption markets such as the US, EU, China... are increasingly demanding on the sustainability of products throughout the supply chain. Changes in consumer behavior also negatively affect Vietnamese exporters, especially the trend of increasing demand for products of organic origin. This is clearly a challenge but also an opportunity for enterprises to grasp, research and develop new products to meet current consumer trends.

Thank Sir!