The trend of international business expansion of enterprises

Sokfarm actively participates in international fairs to reach customers in the markets. Photo: T.L

Continuously expanding

According to the business results just announced by Thanh Cong Textile - Investment - Trading Joint Stock Company, in the first 6 months of 2024, Thanh Cong Garment achieved US$ 64.08 million in revenue and US$ 5.84 million in profit after tax, respectively growing by 12% and 29% over the same period last year.

In 2024, Thanh Cong Garment planned a revenue of VND 3,707 billion (US$ 157.7 million), an increase of 12% compared to the results achieved in 2023, and a profit plan of VND 161.2 billion (US$ 6.68 million). Up to now, the company has received orders corresponding to about 90% of the revenue plan for the third quarter of 2024 and about 86% of the revenue plan for the fourth quarter of 2024.

In the first half of 2024, Thanh Cong Garment exported products to more than 30 countries, spanning Asia, Europe, America…. In addition to exporting traditional products, this company has been promoting product diversification, especially environmentally friendly products, recycled products and high-value products to enhance the product value chain, expand customers in markets with much room as well as search and expand new customers, and markets to increase export revenue,….

Not only large enterprises, but also small and start-up enterprises are constantly striving to reach out to the world market. A typical example is Tra Vinh Farm Company Limited (Sokfarm), although it only started its business in 2019, but its coconut flower juice have been officially exported to many markets such as Japan, the Netherlands, Germany, the US and Australia.

Sokfarm's export markets have been gradually expanded in parallel with Sokfarm's journey of maturity. That process not only requires Sokfarm's constant efforts in researching and perfecting products but also has the persistence in approaching and understanding market trends through a series of international fairs and exhibitions in Europe, Asia…

Mr. Pham Dinh Ngai, CEO of Sokfarm, shared that the company expected to achieve VND 4 billion in export revenue this year, 4 times higher than the results achieved in 2023. In the long term, Sokfarm expected export to contribute 50% of the company's revenue by 2030, a sharp increase compared to the current 7-8% level. To realize this ambition, Sokfarm was making efforts to expand raw material areas and factories to increase capacity, creating a foundation for conquering more new markets in the future.

Supporting enterprises

In addition to the potential domestic market, the international market is always a promised land that any enterprises wants to reach. A recent survey conducted by United Overseas Bank (UOB) Vietnam shows that up to 90% of Vietnamese enterprises are interested in expanding their markets abroad and ASEAN is the top choice in this overseas expansion plan. Accordingly, the motivation for Vietnamese enterprises to go far is to increase revenue, improve profits as well as build reputation and their international brands.

Expanding the market abroad is also a solution chosen by enterprises to diversify the market, thereby minimizing business risks. In addition, many enterprises also expand to the world to take advantage of the Government's policies on supporting business expansion. Specifically, with 15 Free Trade Agreements (FTAs) in effect, Vietnamese goods have a special advantage in almost markets around the world.

However, on the way to the world, Vietnamese enterprises also face many difficulties. Mr. Lim Dyi Chang, Director of Corporate Banking, UOB Vietnam, said that UOB's survey showed that up to 41% of Vietnamese enterprises faced challenges due to lack of customers in new markets. In addition, lack of support in law, regulation, compliance, taxation and difficulties in finding suitable cooperation partners are also barriers for Vietnamese enterprises when doing business in foreign markets.

Through discussions with enterprises, Mr. Lim Dyi Chang said that Vietnamese enterprises were expecting financial support such as tax incentives or tax refunds, funding sources or subsidies for new markets. In addition to these financial supports, Vietnamese enterprises were also looking for non-financial support such as connecting with large enterprises being potential customers in foreign markets.

Faced with this reality, foreign banks with extensive networks are increasingly playing an active supporting role for enterprises on their journey to conquer international markets. Mr. Lim Dyi Chang said that UOB Vietnam was a subsidiary of UOB Bank in Singapore with a network of more than 500 offices in 19 countries and territories in Asia-Pacific, Europe and North America. With more than 30 years of operation in Vietnam, in-depth understanding of the market and solid expertise in each field, along with an extensive regional network and a large ecosystem of partners, UOB was able to connect Vietnamese enterprises with regional opportunities, help enterprises orient in the complex market context, and seize growth opportunities in the ASEAN and further.