Share from Prof. and Dr. Quach Manh Hao, FIT’S current strategic consultant

When I got a job as a strategic consultant for FIT, I told myself every month to try to update the information as honestly as possible to shareholders and interested parties. One rule I always follow is that in any situation, I absolutely do not mention the price of the stock. I can talk about the value, business model, but the price depends on the market.

For example, I recently received a question from a MTV news reader about how much the FIT price would be and he asked me if the expected the year-end price to be 25 is reasonable. Of course, with such questions, I cannot and should not answer. As a strategic consultant, what I do is to contribute to helping FIT become a strong private corporation in industries that meet market demand from increased population size and income in Vietnam. I would be flattered when you ask what FIT is doing, and which philosophy it is.

The first newsletters, I think it is better to start with the corporation’s general investment activities in 2017 up to now for people to know the common information. In the following newsletters, I will go into each new specific information, such as how to update regularly about the corporation to the market.

Pharmaceuticals

2017 saw the strategic change of the pharmaceutical segment. Starting with the acquisition of Euvipharm with a VND 153 billion investment not just to help expand new products such as injectables, eye drops, but also, importantly, to make use of the system of modern equipment available in Long An without spending time building new plants. Going fast but surely is the top criteria for success in this segment.

Along with the new purchase, the No. 3 capsule factory with a total investment of VND 257 billion has also been built at Cuu Long Pharmaceutical Company (DCL) and will be operational by the end of this year. Currently, although the existing two plants are operating at full capacity, they meet only one-third of the market demand, particularly the capsule product line. In addition, DCL also invests in automatic capsule picking, which improves productivity and eliminates defects in capsules.

Another breakthrough investment is the capital contribution with the State Capital Investment Corporation (SCIC) in Benovas Cancer Drugs Joint Stock Company with initial chartered capital of VND 100 billion and design scale of VND 1000 billion. DCL owns 55% and the rest is held by SCIC and other partners. This is the first cancer drug project in Vietnam with German technology reaching European standards. According to the plan, the time to build and operate the plant is about 4 years, when finished, DCL will be the first domestic pharmaceutical company to produce this product.

Food

In the food industry, preservation of the finished product is the most important step. With the investment in IQF (Individual Quick Frozen), Westfoods’ plants will extend shelf life, and more importantly, the quality of the products will be almost the same after the storage. This is an important step in meeting the strictest food safety standards currently coming from Japan, USA, Australia and New Zealand. The quick freezing system also increases the product’s productivity from 2.7 tons per hour to 6.2 tons per hour.

Another important investment activity in this area is the ingredient source. If the sources are not available, it is very difficult to ensure the capacity as well as the quality of inputs. For these reasons, Westfoods agricultural engineers have successfully tested the new MD2 pineapple and in 2017, the company began a large-scale plantation with a partnership between the company and the farmer with the company’s seed and technical support.

It can be said that although the Group’s main goal is to own 100% of its ingredient for the plant within the next three years, this model is also a typical feature of the implementation of CSR commitments towards sustainable development and support to farmers and households. If noticed, the model that FIT and Westfoods are implementing is similar to “Milk District Model”of Nestlé’, a world-renowned food company that cares about developing social responsibilities.

Beverages

The investment in the beverage sector is reflected in research into new products that meet the unique characteristics of Vietnamese consumers. Tea and coffee are two important drinks of the Vietnamese, but what style of drinking and what will fit into modern life is a question that makes the developing product research team concerned about always.

The launch of the new bottled carbonated energy coffee with the brand name Café Imen Ban Me is a difference. It is a combination product between the use of energy drinks and Ban Me coffee, suitable for many consumers in Vietnam. As with the Vitamin Lemon Tea, this drink is not just lemon tea, it also provides Vitamin C which meets 50% of the daily vitamin requirement of the body to increase its resistance, enhance concentration and reduce stress.

There may be different brands of tea and coffee in the market, but I believe that if you try the two products on FIT, it will feel really different.

Consumer goods

Consumer goods is a traditional segment of the corporation since listing. However, like other segments, the company’s engineers are constantly investing in market research and development (R&D) activitiesto make new products, more beneficial to health and the environment.

For example, in the toothpaste line, Dr. Kool, which is familiar with the market, has been researched to offer products that have their own user-specific features. Dr. Kool Bamboo Salt with ionic salt compounds and minerals from bamboo is heated 9 times in bamboo tube at 1000 degrees to improve the cleaning ability of bacteria 3 times more than regular salt. Dr. Kool Bamboo Charcoal contains activated carbon that removes plaque for shiny teeth. Dr Kool Herbal Aloe Vera contains aloe vera extract that was removed of water and fiber to help cool the mouth to prevent heat-to-mouth, clean bacteria that harm natural breath.

I am confident with the birth of the kid toothpaste, Dr. Kool Junior produced by Korean technology, it will become a trustworthy companion of Vietnamese children. This product contains 100% Xylitol which enhances antibacterial activity to prevent cavities effectively, fluoride-free composition is safe for young children to swallow. Besides, the special formula is not spicy with the natural aromas of orange and strawberry to suit the taste of the children. In addition, Dr Kool Junior is supplemented with vitamins, nutrients to help children teeth healthy, shiny, encouraging children to brush often.

Actually, I can not list all new products in this field in 2017 because it is a regular activity of product researchers at the Group. All are geared towards the product for health and personal needs. For example, the company’s other new products have also been introduced and appear on supermarket shelves including Nuwhite Yogurt Shower Cream in the personal care product category, the TERO laundry detergent kit, or the Dr.Clean hand lotion with features focused on protecting the health of the user and the variety of scent.

Strategy and Human Resources

Investment and production activities in these key segments have been the first steps in the restructuring process. Slow, steady steps are helping FIT transform itself into a viable corporation, for social and sustainability.

As for the stock market, it is not easy for the market to change its view overnight, but I believe in the end the smartest people will realize the value from FIT’s business model. When writing these lines, we went into the final stages of closing foreign partners to invest in DCL’s convertible bonds. This is an example of confidence in the changes that FIT is making to the pharmaceutical sector.

One personal information I can share right now is the participation in the Board of Directors of prestigious individuals in the market during the upcoming extraordinary shareholder meeting. Mr. Hua Xuan Sinh, who has operated Duc Viet Group since years, developed the company from VND 2 billion to VND 700 billion, which is reported by the press, will be the first to join the BOD. I have been working with him for a long time since CK Thang Long became a consultant for Duc Viet in 2010 and I strongly believe that Sinh’s participation will contribute to the strong development of the sales system in the FIT system.

Extraordinary shareholders meeting is expected to be convened on November 7. In the current development strategy, FIT will be fully focused on business and human resources. One thing is for sure, we do not plan to issue any capital increase and actually have not thought about it with existing businesses. Building a solid business foundation in this stage is the company’s biggest goal.