Time-honoured porcelain company a true comeback story

The company’s brand is deep rooted in the mindset of generations of Vietnamese people, particularly those in northern areas.

The company, however, has since taken a steep fall due to its obsolete management style and operating structure when the economy began to function under the market mechanism.

In 2008 the company was buried in losses and debts totalling 140 per cent of its charter capital. At the same time employee wages fell to an average VND1 million ($47) per capita per month and the brand nearly faded into nothingness.

“At that time there was an overwhelming supply of unsold porcelain products in the factory’s workshops, causing tremendous waste of materials and workforce,” recalled the company’s chairman and general director Nguyen Do Ha.

At the same time, more than 41,000 square metres of workshop space was in disrepair and resultantly ineffective production lines.

“How could a brand that had such a long history and strong track record find itself on the verge of bankruptcy?” was the question all of the company’s management were asking.

After carefully considering the situation, the management decided to cut back on production, focusing only on 44 product lines, rather than the 1,300 at the firm’s peak. They also went to work restructuring their output market.

The company focused on serving and deepening its roots in 15 northern provinces and municipalities within a radius not exceeding 200 kilometres from the factory site.

“Not many people know that in 2008 we were still selling products directly from our production facility. We then revolutionised our sales strategy and brought products to the customers, rather than waiting for them to come,” said the company’s research department head Thu Hang.

The company also took the bold step of cutting down production lines from three to only one to bolster efficiency.

Staff training was also a top priority, alongside applying a cross-check scheme to assess the work quality of each labourer on a monthly and quarterly basis.

These improvements breathed new life into the company’s development.

In the first year after embracing renovation, Hai Duong porcelain was back in the black and later gradually offset its cumulative losses, paid off its bank loans and raised its workers’ salaries, which are now four times what they were in 2008.

In March 2014, one of its main shareholders – the State Capital Investment Corporation (SCIC) – successfully sold its 36 per cent stake in Hai Duong Porcelain at a public auction and got a return on investment more than triple what it had paid.

At present, the company markets about 1.5 million items per month and can only satisfy one-third of order volume.

Therefore the management is reportedly mulling ways to make further headway. “Hai Duong porcelain still has a ways to go in reconfirming its position in the market and further bolstering its traditional Vietnamese brand,” Ha explained.