Habeco displaying resilience in 2020

Habeco displaying resilience in 2020 (photo: Vietnamnet)

As one of the largest beverage enterprises in Vietnam, the group (Habeco) has proven its vital role in the industry by showcasing the quality goods of its Hanoi and Truc Bach beers – both of which met the strict criteria of the programme, which focus on overall quality, innovation capacity, and creativity.

For many years, the food and beverage industry has been one of the most important economic sectors with great potential for development in Vietnam. The industry is the largest in terms of production value and the second-largest in terms of total revenue among Vietnam’s economic sectors.

The industry is forecast to continue to maintain strong growth momentum, with an average growth of 10.9 per cent per year thanks to the population’s improved income and a tendency to consume higher-value products. Additionally, beer, non-alcoholic beverages, and food are the three fastest-growing groups in fast-moving consumer goods.

With such premises, Habeco sees great potential to further develop and diversify its portfolio. Habeco is thus researching and launching new high-quality products, suitable for consumers’ varying tastes and modern brand development strategies.

The beer and alcohol industry has been one of the most affected ones by the pandemic, with restricted gathering and social distancing having a great impact on the consumption of beer and alcohol. Moreover, Decree No.100/2019/ND-CP on road traffic violations taking effect on January 1 had its influence on the amount of sold beer and alcohol.

These two happenings made many businesses in the beer industry face immense difficulties, with some of the smaller ones suffering the most. As Habeco was as surprised by the pandemic as any other company and individual, the group lost around VND98.3 billion ($4.2 million) in the first quarter of the year, while the same period last year was still profitable after tax.

In the second quarter, the beermaker reported a profit of nearly VND246 billion ($10.7 million), representing even a slight increase compared to 2019’s second-quarter profit of VND241 billion ($10.4 million).

In the third quarter of the year, Habeco recorded a profit after tax of VND341 billion ($14.8 million), double the profit of the third quarter in 2019 and the largest quarterly profit in the past four years.

Meanwhile, revenues in the last quarter reached VND2.7 trillion ($117 million), a slight increase of 1.7 per cent over the same period last year. Habeco’s positive results in the third quarter mainly came from cost reduction, of which selling expenses decreased by 40 per cent, and advertising, promotion, and support costs by 54 per cent.

Despite the heavy impact of the pandemic, Habeco has promptly adapted and returned to grow its profits in the third quarter. Its total profit after tax in the first nine months of 2020 reached VND488 billion ($21.2 million), more than double the target for the year.

Habeco chairman Tran Dinh Thanh said that if things continue to go as well as now, without any major COVID-19 infections in the community, his company’s business results will be maintained at the end of the year.

This year, Habeco set a business plan, under which sales are supposed to hit VND4.2 trillion ($182.6 million), equal to a 56-per-cent increase over the same period last year. Also, according to the plan, profit after tax was expected to reach VND248 billion ($10.7 million), which has already been surpassed. A total of 6 per cent dividends are expected to be paid, taking into account the impact of the COVID-19 pandemic and people’s consumption.

According to Thanh, in recent years, the company has lost market share as demand has not increased in the northern market, while some other brewers have sharply increased their presence and capacity, including some foreign competitors. However, Habeco tries to stay true to its image, policies, product lines, and strategies.

Currently, Habeco is looking for partners to consolidate increase in its market share. In terms of marketing, the company will assign more central market areas to Hanoi-Thanh Hoa Beer JSC to consolidate market share. For the southern market, the beermaker aims to soon complete the construction of further facilities, recruit more staff, and find new distributors to exploit the market.

Habeco will continue researching and developing new product lines following consumer tastes, enhancing the capacity of the sales system, and increasing its brands’ competitiveness in the domestic and regional markets.

Following the motto “Vietnam’s Resilience”, Habeco endeavours to reaffirm its position as one of the leading domestic beer enterprises, proudly bearing the title of a national brand.