AB Mauri's business development strategy amid rising inflation

CEO Tran Huu Dat, General Director of AB Mauri Vietnam. Photo courtesy of AB Mauri Vietnam

What are your thoughts on the domestic and foreign economies during this period of inflation?

In terms of the global economy, everyone expects 2023 to be a boom year following the strong rebound of 2022. However, this year has proven to be more difficult than expected.

Vietnam has been a part of the international market for many years; therefore, it is difficult to avoid being affected by these issues, even though domestic inflation is a little slower than in other countries.

One of Vietnam's advantages is that it has well-controlled inflation compared to the high rates in the United States and Europe. This has resulted in a significant drop in the domestic consumer price level in the first seven-month period of 2023. This is a positive indicator, demonstrating the government's efforts through the recent implementation of domestic inflation control strategies.

Furthermore, this is a factor that has a direct impact on enterprises operating in the Vietnamese market. We have spent time assessing fluctuations in the market in order to quickly discuss and develop relevant plans and strategies to assist businesses in surviving in the current environment while minimizing the impact of inflation.

What opportunities and challenges do these effects bring to AB Mauri?

Inflation has begun to have a greater impact on the FMCG industry this year than it did last. The extent of the impact will differ according to the product and price group.

For example, the mid- to high-priced confectionary market will be impacted more negatively than inexpensive goods or every day cakes and snacks. This year, the consumption levels of these two sectors also showed a notable difference.

Additionally, FMCG export indexes, such as those for yeast, flour, and bread products, dropped. These were the most visible consequences for FMCG businesses in general, and AB Mauri in particular, in the first half of this year.

How has AB Mauri planned to deal with the current situation?

AB Mauri detected the inflationary issue in Vietnam quite early on. Although domestic inflation delayed, because many of our basic materials are imported from Europe, we had to face price increases for these products when the international market was hit. That is a point of which we must be aware and create scenarios to deal with this problem as soon as possible.

We are currently concentrating on three activities.

First, we have worked closely with both domestic and foreign partners to analyze structures and changes in order to reduce the impact of inflation and seek opportunities. From there, we visualize potential future impacts and risks and make quick decisions about input material sources.

Second, we evaluated all operating costs in order to reduce unnecessary expenses.

Third, AB Mauri did the survey and discussed in depth with partners problems such as input material pricing and customer demand variations. From there, the parties can collaborate to figure out the most efficient approach to minimize the damage on both sides while also surviving in the present situation.

Why has AB Mauri decided to restructure its personnel structure at the moment?

There are two key reasons behind the decision to restructure AB Mauri's human resources apparatus: it comes from within the company and it comes at the right time.

The previously decided company plan is the turning point of change on the business side. AB Mauri has stopped producing yeast at its Vietnam establishment since February. Yeast is one of two products produced by the company; the other is baking ingredients.

The domestic factory's technology is outdated, making it difficult to compete with other domestic competitors. The factory's shutdown is a significant event that requires personnel restructuring because it is essential to arrange for a group of employees to work in this region.

The second factor is that all alternative import routes for domestic factories have been completed and are ready to be implemented. As an international company, AB Mauri has factories in countries such as Malaysia, Indonesia, India, Pakistan, and China, which can replace production for units in Vietnam. The logistics route is also suitable for us. We put everything together appropriately in order to save costs while still maintaining shipping and product delivery deadlines.

A country's production shutdown has no effect on the supply of goods to the domestic market. This is also a long-term strategy, and initial preparations have been made so that it can be officially deployed and applied at this time.

With this major change, we are committed to continuing to provide high-quality yeast products to the market, along with balanced business solutions for AB Mauri's current industry and craft customers. This is also the expectation we have for the future in order to maintain our position as one of the industry's leading companies while keeping a safe distance from other competitors.

What is your objective and plan as the new General Director of AB Mauri?

With many years of experience working in international organizations and companies, I am confident in my ability to perform well as General Director of AB Mauri. At the same time, the company shares the same client file with a number of units I have worked with before. The advantages that pushed me to take up the position are knowledge and understanding of the target market, which are also abilities I can use to strengthen the company.

Additionally, AB Mauri is in the process of transitioning into a 100% foreign-owned company. Taking on a new position strengthens its position while also helping the company make timely decisions in the local market, in addition to having the support of a corporation with 150 years of worldwide operating experience.

My personal goal over the next five years is to strengthen our position in the Vietnamese yeast and baking ingredients markets. At the same time, my greatest goal is that the company is going to be able to make significant contributions to transforming the domestic cake market in a beneficial direction, enabling us to provide excellent cake products that meet the demands of customers' needs.

What difficulties did you encounter upon taking over as General Director of the company?

One of the most difficult challenges for me is maintaining a sense of direction while fostering business development with partners and investors. At the same time, my challenge with the current workforce is to convey and understand the company's common objectives, goals, and tasks, as well as those of each target group. The most important thing is to ensure that they understand that they are a part of the future business development strategy that I am creating.