Vietnamese enterprises must proceed to buy goods from this country and sell to other countries

2023 has only passed 5 and a half months, but the head of Phuc Sinh Group has spent 4 months abroad. From Europe to Africa, the Middle East and the US market alone, he had 4 trips, including one lasting more than 3 weeks. Trips to meet directly with customers, eat meals to talk together, "make up" for the nearly 3 years since the Covid-19 pandemic occurred. To meet the most clients in the United States, there were days when he had to get up at 3 a.m., travel to the airport to catch a flight on time, trade a little, and then return the same day in another state.

Thanks to that, he saw with his own eyes that many partners reduced their employees; The prices of goods and services in many places have increased by 40-50% compared to before the epidemic, the number of homeless people is also higher than before, even in countries with the leading economies in the world… Since then, he understands customers. What is needed, what is desired as well as what is the upcoming consumption trend of the world. Most importantly, the difficulties and challenges of partners are not unique to a single unit or country, but are happening globally. He will also understand what his company needs to do to be able to continue to overcome difficulties and go up.

“If the partner previously had orders for 20 businesses in other countries, but now the demand has decreased, the quantity of goods is only enough for 5 units, Phuc Sinh tries to maintain its name in those 5 units. So not only do I have to go constantly, but the employees in the company also share to go to fairs and meet partners everywhere. Currently, Phuc Sinh has exported and sold goods to 102 countries, so there are often people who have to go abroad,” said Mr. Phan Minh Thong.

The successive trips have brought many new contracts and customers from many distant lands. In the midst of difficulties surrounding the global economy, most businesses in many industries had their orders reduced, but in the first 5 months of this year, Phuc Sinh Group still grew revenue by 35% compared to the same period in 2022. In which, processed products accounted for about 60% of the company's total revenue and the target will increase to 80% within the next 1 year. K-Coffee-branded coffee packages are now sold in many US supermarkets; jars of K-Pepper pepper sauce and freeze-dried pepper appear more and more in stores and restaurants in European and Middle Eastern countries...

CEO Phuc Sinh Group shared: “Nearly 22 years of exporting pepper and coffee and have been making deeply processed products with my own brand for more than 15 years, but this time I boldly participated in the world coffee quality contest in Greece. Only 30 minutes for me to participate in the contest to give a cup of quality coffee, Vietnam's own specialty is to pay a fee of 550 euros. If you are not confident, you will not participate. Today's market is borderless, vast and has many different segments and needs. Especially the demand for coffee is increasing rapidly. In the Middle East countries alone, demand has increased fivefold. This is an opportunity not only for Phuc Sinh but also for the whole Vietnamese coffee industry to continue to develop.”

Starting from a small company specializing in exporting raw products, after just over 3 years of establishment, Phuc Sinh started to build a factory and process products with the company's name. Of course, in the beginning, the company's products were not different, so it was easy to mix up with countless other goods. In order to have money to buy processing machinery and build factories, Mr. Phan Minh Thong decided to spend about 5% of revenue each year for investment. Since then, every time he went to the fair or met with customers, he persuaded his partners to buy some of the company's processed products besides tons of pepper or raw coffee. And so, Phuc Sinh's processed products are gradually chosen by customers. Just like the company has been making freeze-dried pepper products for 5 years and pepper sauce for 7 years in small quantities, until about 2 years ago, selling more and starting to make a profit. But once accepted by the customer, the amount of money collected is a lot. Specifically, 1 ton of freeze-dried pepper costs $18.000, 6 times more than traditional black pepper ($3.000/ton).

Similarly, Phuc Sinh is the first Vietnamese company to produce large-scale premium tea from arabica (Cascara) coffee husks. This is a proud step of Phuc Sinh's R&D team, because this new product not only helps reduce environmental pollution but also creates more income for farmers. Only arabica coffee pods can make Cascara, so the annual production of Cascara tea is still quite modest. For comparison, Phuc Sinh's Blue Son La coffee is currently selling for 358.000 VND/half kg, while 300 gr Cascara costs up to 420.000 VND. That is, the price of tea from coffee pods is higher than coffee. Phuc Sinh's CEO analyzed: Currently, Phuc Sinh's Cascara tea is mainly exported to the Italian market. South American countries have been producing Cascara tea for a long time, but have only exported to Europe since February 2.2022. Starbucks also sells Cascara tea, but only in the US market. Just like pomelos in each region have different colors and flavors, so does Cascara tea, so it is not true that Son La's Cascara tea is a rival to Cascara tea from Brazil or Colombia. As planned, the company's Cascara tea factory will be completed this year, expanding export output to other places.

Although it has been successful in the international market, in recent years, when Phuc Sinh decided to participate in direct sales in the domestic market with the goal of supplying pepper, coffee, spices, etc., he also encountered many difficulties. So far, the domestic business segment has not been profitable, but the company continues to expand its business activities, from direct sales to online as well as opening a chain of coffee shops.

Mr. Phan Minh Thong often goes abroad to exchange and meet customers

Mr. Phan Minh Thong recalled the story that many people have wondered about, why is Vietnam also in the top 5 in exporting textiles, leather and footwear, but no brands are mentioned by consumers? Or is Vietnam the second exporter of coffee in the world, but 2% still only exports raw? Many businesses only focus on export activities and only when the market fluctuates and orders plummet, they return to make goods for the domestic market. How can it be done in such a short time? Gone are the days when consumers were sympathetic and bought something for someone. Just like if Phuc Sinh didn't do it many years ago, no one would know K-Coffee or K-Pepper.

“For the agricultural industry, the more processing plants there are, the more there will be no surplus in the crop. We ourselves ran out of crops and still had stock to sell a few months later. No one can save you but try to find your own way. Only deep processing is the "savior" for businesses in this field. It can be said that, thanks to enhanced deep processing throughout, Phuc Sinh has increased the value of its products as high as possible in the segment we participate in, directly attacking niche markets. Therefore, the price of Phuc Sinh's coffee is always 5 - 10% higher than the world average price. With revenue of hundreds of millions of dollars a year, this difference makes a significant difference. Moreover, Phuc Sinh will not be too dependent on the season, always has goods for production and distribution throughout the year. Regardless of industry, any company, no matter how small, can start doing it, building its own brand for products, for the company. Don't say we don't have money. As in the beginning, Phuc Sinh also had to take money from exporting raw agricultural products to slowly build a factory; as well as currently continue to raise the domestic consumption segment. I still remember when I was in school, I was told: If you don't give up, you haven't failed. If you don't start, there will be no continuation and no big thing," said Mr. Phan Minh Thong.

In 2022, the country's coffee export turnover will reach more than 4 billion USD. According to CEO Phuc Sinh Group, in addition to the increasing demand for this drink, the price of coffee from the beginning of the year to now has also nearly doubled last year, reaching about 68 million VND/ton. He estimated that the whole year of 2023, the coffee industry could bring in 5 - 6 billion USD of exports thanks to high prices despite a decrease in output. Thus, on average, each year, Vietnam can exploit from 4-5 billion USD in coffee products alone. At the same time, it also brings in many other billions of dollars for many agricultural and aquatic products.

This is the "gold mine" of the country. “If coal mines, iron mines… will run out for a while and affect the environment, then the annual farming will still produce a steady output and every sale will bring money back, contributing to economic development. Phuc Sinh currently accounts for only about 6-7% of the country's coffee production, and with increasing demand and diverse markets, the potential is still wide open," said Thong optimistically.

Not only efforts to build the company's own brand, create value for Vietnamese agricultural products, but with Phuc Sinh, the business is unlimited. The company has also become a major global trader in the tea, coffee and spice industries. Mr. Thong said 16 years ago a customer in France called him because "there is a lot of nutmeg to be liberated". After researching, he learned that this customer bought from a Belgian trader, and the Belgian trader bought from a Madagascar exporter. Later, the buyer of this nutmeg from Phuc Sinh sold it through Saudi Arabia and the nutmeg was shipped from Madagascar to Saudi Arabia.

“I think companies in the Netherlands or Singapore can buy and sell around the world. If people can do it, I can do it too! Like companies from India, Germany, the Netherlands... how to succeed when entering Vietnam? They need to be more creative to be able to stand firm and surpass domestic companies”, Mr. Thong asked and answered himself. So now Phuc Sinh is not too dependent on the supply in Vietnam, because there are also sources in Indonesia and Brazil. It doesn't matter what item and where it comes from, as long as it's profitable, the company will buy and sell it. The market has a lot of demand in different segments, deep processing companies that make differentiated products will sell at high prices; while exporting raw goods at low prices to meet the needs of many users of this product. As a result, if before, the company could only sell 400-500 containers of all products per month, now coffee alone has exported more than 500 containers.

The head of Phuc Sinh Group concluded: Vietnam has developed a lot, but we ourselves think that we are far behind foreign countries. When going abroad, Vietnamese people are too gentle and even a little self-deprecating. Therefore, it is necessary to have stronger aspirations, open-mindedness, creativity and confidence. Going out into the world, observing the market is a way to see that if customers lack processed products, we will do processed goods; or the market lacks the source of goods, I go to buy in Indonesia, Brazil to resell them...

“After the Covid-19 pandemic, everyone knows how important food is. Vietnam is peaceful because it can produce many agricultural products and food. We have hundreds of "gold mines" that are yet to be exploited. In any field, this business is difficult, but it does not mean that every business is closed, but there will be another unit to replace it. The younger generation needs to be brave, confident and go abroad more to do business. We not only bring Vietnamese goods to sell to the world but also buy from this country and sell to other countries. We accept the diversity of the market, so the vision and mindset are the most important," emphasized Mr. Phan Minh Thong.

Thanhnien.vn

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