Agri firm Nafoods rejigs business model, risk management for ‘complete transformation’: CEO

The Covid-19 pandemic has caused many difficulties for Vietnamese businesses. What has Nafoods Group done to cope?

The Covid-19 pandemic greatly affected not only the Vietnamese economy, but also many partner countries in many ways. Export and import activities, circulation and transportation of goods, production and service sectors, including agriculture, were severely affected. To adapt and survive in this difficult period, Nafoods had to act decisively.

Specifically, Nafoods is in the process of overhauling itself by transforming its business model, its operating model and its risk management strategy.

Instead of focusing on trading its own products, Nafoods has shifted to a service model for the agricultural ecosystem. Among other things, it provides sales and quality management services, logistics and customer care for manufacturing partners in the same industry.

It has also expanded the group of core agricultural products from five key fruits to all vegetables, tubers, fruits and nuts, and increased service value/sales per customer. Furthermore, it has developed a results-oriented business team, thereby increasing autonomy and creativity.

Nafoods has also made changes in its operating model to match the overall systemic shift. It has chosen flexible production management and business plans - a governance-management model based on concentration and specialization, digital transformation and information transparency.

As its third transformative plank, Nafoods has focused on improving the quality of risk management by proactively predicting and preparing response plans to complex problems arising from customers, markets and products.

Besides, it has worked to minimize impacts of financial and liquidity risks; invested in upgrading machinery and equipment and automated production stages to ensure stable production and continued operation in all circumstances.

Digital transformation is a key factor that we are looking to promote in production and business activities. At Nafoods, more than 30 subsystems have been completed and put into operation, serving professional activities in various departments. These subsystems have been based on practical needs and recommendations by specialized departments, as also requirements of the whole system.

Digitalization has shown clear, positive results, helping save time and costs. The integration, recording and management of objective data with specialized tools and software have helped departments easily access detailed assessments, enabling timely and rational decisions each time.

Finally, the firm has also focused on improving human resources as well as the culture and core values of the business.

Soon after the pandemic was controlled, conflicts broke out in some places, affecting the global economy. How has Nafoods been impacted?

After we stepped out of the raging Covid-19 pandemic, we thought the world would return to the old order, but the fire of another "war" was rekindled. Then came the battle against inflation and supply chain disruptions that affected supply, demand and prices. Nafoods was impacted, of course, with reduced consumption and sales, which, in turn, hindered it from promoting investment cooperation.

However, Nafoods will remain steadfast in its vision, mission and strategy of developing a closed agricultural value chain from seeding, growing, processing and exporting fruit juice products, frozen vegetables and dried fruits, nuts and fresh fruits. With nearly 30 years of experience, in the face of continuous fluctuations, Nafoods will continue to force itself to make changes as needed.

This year, our main focus will be on "knowledge improvement, effective operations and faster work processing."

Although the world situation remains unpredictable, the business environment in Vietnam has many bright spots. Nafoods sticks to its vision and mission regarding production, business activities and social responsibility, fulfilling its commitments to partners, customers, shareholders, employees and farmers. This is the key factor that helps Nafoods develop sustainably.

What are your short-term plans?

Recognizing both challenges and opportunities, Nafoods will pay heed to developing business strategies for the domestic market and expanding export markets in countries less affected by the current conflicts like Australia and Asian nations. These are also potential markets that we have been targeting.

Besides, we are also researching and developing new types of agricultural products and new product lines in the search for new markets and increased market shares, not to mention attracting greater investments.

Nafoods has officially restructured itself towards greater professionalism that lays the foundation for development until 2026. We have also appointed new personnel for important professional positions and remained focused on providing training to develop and nurture our human resources.

To proactively prepare supplies and enhance quality control of raw material inputs, Nafoods will pay special attention to developing raw material areas and applying specialized software including Cropin, Fast Business, CRM and SRM.

On the other hand, Nafoods will also focus on improving production capacity, inaugurating a 10-hectare high-tech agricultural complex in the Central Highlands region, including a high-tech plant breeding research center; and facilities to classify, separate, package and preserve fruits for export.

For the business segment, in addition to expanding export markets (Nafoods products are present in more than 70 countries now), the company has officially marked its return to the domestic market with dried fruits and nuts as main product lines.

2024 will also see preparations to celebrate the 30th anniversary of the company's formation and development.

What kind of support do businesses need at this difficult time?

As production and business activities still face difficulties, now more than ever, the government needs to synchronously implement supportive measures to help firms survive and sustain. The solutions include better capital access, reduced costs and preferential loans. Overall, the government needs to further improve the business environment to allow easier market access.