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|Human resources training, localisation, restructuring customer portfolios, and technological advancements are all part of TBS Group’s long-term development plan|
Last year was a tough one for Vietnamese businesses with supply chain disruptions and frozen consumption markets due to prevention measures to contain the pandemic. Several manufacturers struggled to maintain business continuity amidst movement curbs. This, coupled with a growing number of infected and isolated workers, resulted in a significant drop in output.
In this context, Thai Binh Investment JSC (TBS Group) made efforts to deal with the challenges and fulfil its business targets. In 2021, the output of TBS’ footwear segment reached over 90 percent of production in 2020. TBS’ handbag segment also achieved a similar output percentage of 90 percent. Meanwhile, the output of shoe soles rose by about 26 percent against 2020.
To achieve the results, a leader of TBS said that the company has accelerated its vaccination campaign and promoted pandemic prevention measures in line with the guidelines of the Ministry of Health. It has deployed safe manufacturing systems like the “one route, two destinations” model and the “stay-at-work” model to maintain its business continuity.
Besides setting up a green zone in manufacturing, the company also adopted a “work-from-home” model for its office workers, making efforts to realise the goals of maintaining manufacturing and preventing the pandemic.
Restructuring for success
Besides the achievements, he noted that the company also completed its solar energy system, reducing 92 per cent of carbon emissions. The company has launched another footwear research and development centre. Also, it has merged My Phong factory in the Mekong Delta province of Tra Vinh into its manufacturing system to improve productivity as a whole.
However, the company faces another challenge after resuming manufacturing. The Russia-Ukraine conflict has once again disrupted the import and export activities of Vietnamese firms, including TBS, to these markets. The situation has disrupted the transport of goods to the EU as well as sparked inflation and rising fuel, transport, and material prices.
TBS has suspended all of its exports to both Russia and Ukraine, causing a major disruption to its manufacturing and export plans, such as lower output and rising expenses.
“To remove the challenges, the company has negotiated with customers to transfer the affected orders to other markets due to the impact of the war. The company also arranges its manufacturing plan to compensate for the affected orders,” the group representative added.
TBS Group has proposed five solutions to achieve development in the long term. First is re-organisation, which includes restructuring and training potential management teams based on real-life situations. The second solution is based on automation, innovation, and modelisation to improve business and production efficiency. This includes technology infrastructure research, the use of Industry 4.0 in digital management, automation to enhance output and lower costs, and more.
The third solution is human resource management. The company will actively recruit and train, making maximum use of its existing infrastructure. The fourth solution is to increase the localisation rate to replace imports, while the fifth solution is restructuring its customers and product portfolio.
The TBS representative said, “TBS Group has just restructured its business model into two main groups – manufacturing for the fashion industry as well as investing in real estate and industrial infrastructure.”
He said that in the coming time, the group will continue to allocate investment in the industrial production segment including shoes, bags, soles, and supporting industries. Another key focus area is the hospitality segment with the Mai House brand and residential real estate, including high-rise apartment buildings in combination with commercial centres.
With its strength in the real estate market, especially in the southern province of Binh Duong, TBS Group expects to transform TBS Land into a prestigious developer with a strong presence in the market.
“TBS boasts strategic land reserves in Binh Duong. The leadership team also recognised the rapid urbanisation rate in Vietnam, which can be clearly observed in major areas in the east of Ho Chi Minh City like Di An, Thuan An, and Thu Duc,” the representative said.
In addition, investment has constantly been poured into key national transport projects such as ring road 3 and 4, Suoi Tien-Ben Thanh Metro Line, expansion of the National Highway No.13, and so on. “Improved infrastructure leads to the comprehensive development of services, entertainment, and residential projects in Binh Duong, turning the locality into a magnet to foreign investment, experts, and workers,” he added.
The leader is also upbeat about the outlook of industrial real estate in Vietnam in the next 10 years, which boasts ample potential for investors. The bright outlook is underpinned by the strong local and foreign capital.
Reports by the Ministry of Planning and Investment showed that Vietnam attracted $4.42 billion in the first quarter of 2022, up 8 per cent from the same period last year and the highest first-quarter result over the past five years. Among them, Binh Duong is the third-largest recipient of foreign direct investment in Vietnam.
In addition, industrial zones are reviving after the pandemic with a positive industrial production index. Meanwhile, key export markets such as the United States, South Korea, Japan, Taiwan, and Hong Kong are also reopening. At the same time, localities continue to accelerate administrative reforms to attract more investors.