Phạm Gia Linh

The resources and capabilities of the Nafoods group

1. Resources of the Nafoods group
1.1. Tangible resources
1.1.1. Financial resource
Nafoods group has expanded cooperation relationship with a number of
financial and investment partners, such as IFC - a financial institution under the
World Bank. Nafoods is the second agricultural company in Vietnam, invested
by IFC in phase 1 with 8 million USD and committed to continue long-term
investment.
IFC's investment helps Nafoods expand the number of farmers involved in the
company's cold chain in line with them receiving the widely recognized ISO:
22000 Food Safety System in the world.
In addition, IFC's investment and technical advice has greatly supported
Nafoods in its efforts to increase the value of its products by applying the
principles of safe, sustainable agricultural practices and improve production
facilities. That helps Nafoods dominate over prominent competitors such as
AFIEX, Quang Ngai Agro-Food Joint Stock Company, and Nam Dinh Export
Agricultural Food Processing Joint Stock Company when they all have no
breakthrough in developing and supplying new products to the market.
1.1.2. Physical resources
- With the goal of expanding the material area including 30% exclusive material
areas, 50% from subsidiaries and branches and the rest from cooperative
farmers, the company has cooperated with local authorities. an important raw
material area in Vietnam, expanding Southeast Asian regions and investing
heavily in R&D for seedlings to develop raw materials.
- Purchasing agricultural products: Nafoods raw materials are collected from
monopolistic farms and contract manufacturers, with about 70% of raw
materials coming from smallholder farmers or ethnic minorities.
- Regarding the technological process: in order to reduce production costs,
including transporting, minimizing and handling post-harvest damage to fresh
produce, the Nafoods Group has developed its processing factories close to
supply of raw materials. Processing factories in Nghe An and Long An are
convenient from all directions of Vietnam, Laos and Cambodia.
Currently, Nafoods has a system of modern factories in many localities across
the country. Typical examples are Naprod Nghe An Factory, Que Phong
seedling factory, Nasoco Long An factory, and Northwest preliminary
processing factory.
1.1.3. Human resources
The company determines that human resources are one of the most
important assets, contributing to creating a competitive advantage for
businesses. Therefore, resource development is paid much attention by Nafoods
through organizing training courses on skills, knowledge and especially
attitudes to ensure quantity, quality suitable for work and inheritance.
Previously, Nafoods applied human resource management according to
traditional methods, the salary and bonus system did not clearly reflect the
capacity and results, so the group implemented a new way: innovative
application of BSC & KPI; Clear income policy 3P for the whole organization;
Talent management system and inheritance team to develop Nafoods value;
internal pricing system for efficient operation of the profit centers.
With effective human resources, including many domestic and international
experts, with a deep understanding of the agricultural activities of Vietnam and
the world, Nafoods has boldly integrated information technology (IoT - Internet
of Things) into the garden management and control system, building a
centralized database, developing agent and customer management applications;
step by step modernize agricultural activities, asymptotic to smart digital
agriculture.
1.1.4. Organizational resources
At factories, the Group strictly applies quality management standards,
effectively and rationally controls food hygiene and safety. In particular, Long
An factory complex quickly completed the quality management system shortly
after its inauguration, achieving international standards and passing rigorous
assessments of customers; Rearranging production planning and raw materials,
focusing on centralized control, ensuring communication and control across the
chain.
As of June 30, 2019, Nafoods Group had 4 subsidiaries: Nafoods Lime Joint
Stock Company, Southern Nafoods Joint Stock Company, International One
Member Limited Company, Tay Nguyen Nafoods Joint Stock Company and
linked with 3 companies: JSC Que Phong Pharmaceutical JSC, La Giang
Agriculture Joint Stock Company, Tay Bac Nafoods Joint Stock Company.
1.2 Intangible resources
1.2.1. Resources for skills
In 2013, Nafoods Group invested in additional IQF product production
lines, diversified products and expanded export markets.
In 2019, Nafoods is the first and only enterprise in Vietnam to create 3
varieties of passion fruit certified and protected by the Ministry of Agriculture
and Rural Development, including Nafoods 1, Que Phong 1 and Bach Huong.
first.
1.2.2. Resources for innovation
Nafoods Group focuses on training skills, knowledge, especially attitude.
The Group has trained 1,467 people with 5,205 hours of training. In particular,
the outstanding training programs such as: Responsible cultural training and not
blame internally; Training on ISO standards, PRP regulations, hazards affecting
product quality at factories, ... The program content is selectively suitable for
each object to help employees increasingly improve their skills. perfecting
themselves to meet the production and business requirements of the company in
the 4.0 era.
1.2.3. Reputation, position
Nafoods Group is one of the most innovative fruit and vegetable growing,
processing and exporting groups in Vietnam, specializing in fruit juices / NFC,
pureed, concentrated, IQF and fresh fruit, produced on line. advanced and
modern technology line with strict quality requirements, ensuring international
standards such as BRC, ISO 22000: 2500, HACCP, SGF ...
In Vietnam, Nafoods Group is a pioneer and leader in the production of
concentrated passion fruit juice. Currently, the Company accounts for more than
80% of the concentrated passion fruit juice produced in Vietnam with a raw
material area of nearly 50,000 ha spread across regions and neighboring
countries.
In the international arena, Nafoods Group's passion fruit products have
conquered the most demanding markets such as Europe, the US, Japan, Korea,
Australia ... The company provides about 8% of the output of coarse passion
fruit. concentrate in the world and is Asia's largest supplier of concentrated
passion fruit.
As the only unit in Vietnam successfully producing disease-free Dai Nong 1
passion fruit seedlings on a large scale, Nafoods Group owns a large-scale seed
institute with a capacity of 6 million seedlings / year, Nafoods Group is proud to
be The only unit in Vietnam successfully produced disease-resistant Dai Nong 1
passion fruit seedlings on a large scale, supplying large areas of passion fruit
material in Vietnam, Cambodia and Laos.
Nafoods Group is also honored to receive international certifications such as
GLOBAL GAP, Rainforest Alliance and Fair Trade, being one of the 50
businesses that received the title of "Enterprise for farmers" by the Ministry of
Agriculture and Rural Development. .
In 2016 and 2017, Nafoods Group is honored to be one of 100 businesses
selected as a sustainable development enterprise in Vietnam.
2. The capacity of the Nafoods Group
2.1 Management capacity:
Towards the goal of sustainable development, the managers of Nafoods Group
are constantly learning, exploring, developing and diversifying the product
industry. According to experience from developed countries, in order to develop
safe agricultural production in the value chain, the application of S&T is an
inevitable trend. With that in mind, Nafoods management actively developed hi-
tech agriculture, helping to create a breakthrough to improve productivity,
quality and product competitiveness. At the same time, actively promote the
media, come up with effective strategies that are strong enough to enhance
competitiveness.
Putting food safety as the top principle, Nafoods leaders are always strict in
management and quality control operating according to international standards.
The company identifies human resources as one of the most important products,
contributing to a competitive advantage. Therefore, development of employees
and employees is always focused through the organization of skills, knowledge
and regime training. Nafoods ever days of perfecting and building a corporate
culture with its own identity, creating a solid and civilized foundation,
committed to ensuring all the interests of employees in the company.
Employees are guaranteed all rights that the law stipulates, are respected,
developed, recognized and compensated satisfactorily.
For the problem-protecting environment, Nafoods Group is always aware that
any cultivation and production activities have impacts on the surrounding
environment. Therefore, all solutions aim at the main goal: efficient use of input
elements (materials, energy, water sources) and element head testing to
minimize the impact on the environment ...
In addition, Nafoods always makes every effort to participate and deeply
participate in community support programs and together strive to build Nghe
An homeland more and more beautiful and civilized. In all its activities,
Nafoods aims to connect the development company with the general
development of the local and national economy.
2.2 Production capacity:
 Raw material area:
The material area of Nafoods Group stretches from the Northwest, the Central
provinces, the Central Highlands provinces, and the Mekong River Delta
region. Nafoods Group system has been working with farmers, cooperatives and
partners in all three regions of North, Central, and South and some major
partners in Laos and Cambodia.
 Production facilities:
Fruit and vegetable processing factory for export in Quynh Chau, Quynh Luu,
Nghe An. Capacity: 5,000 tons of product / year of concentration line and 2,900
tons of IQF of product / year.
Export vegetable and fruit processing factory at Hoc Thom 1 hamlet, Hoa
Khanh Tay commune, Duc Hoa district, Long An province. Capacity:
Concentration Line 7,500 tons / year and IQF Line 5,000 tons / year.
Plant producing passion fruit juice in Pleiku City - Gia Lai. Capacity 150
tons of fluid / month. Nursery garden with a scale of 5 ha, capacity of 6 million
seedlings / year, in Tri Le commune, Que Phong, Nghe An. And a number of
production and processing facilities are outsourced by Nafoods Group.
2.3 Human capacity:
 For employees and employees: At Nafoods, well aware of the importance
of employee development in terms of building an effective and positive
working environment, Nafoods spends a large part of its budget on
Annual employee training activities through internal and external training
programs. The Group wants to create the best opportunities and
conditions for its employees to improve their knowledge, develop
themselves and contribute to the development of the company and the
community.
 For partners and experts: Nafoods cooperates with many domestic and
international experts with a deep understanding of Vietnam's agricultural
activities. Thereby, Nafoods receives investment and technical advice as
 well as other supports that play an important role for the development,
creating a competitive advantage for businesses.
3. The core competencies of Nafoods in the market ( apply VRINE rules )
3.1. Valuable
During its business operation, Nafoods Group relies on Vietnam's strengths
in tropical fruits and agricultural products to develop its product portfolio. The
diversified product portfolio is divided into four main groups: concentrated
juice, juice / NFC / Puree, fresh fruit and seedling (passion fruit).
While the majority of Vietnamese agricultural products are traded on both
domestic and export markets in fresh, unprocessed form and at low prices due to
poor quality compared to other countries. While the prominent competitors of
Nafoods such as AFIEX, Lafooco, ... have no breakthroughs in the development
and supply of new products in the market, IFC's investment and technical
consulting Nafoods gives great support to adding value to their products by
adopting principles of safe, sustainable agricultural practices and improving
production facilities. The Group's increased production capacity will enable
more opportunities for local farmers to increase income and meet the market
requirements of high value export markets.
In cooperation and support relationship: The Company expands the cooperation
relationship with a number of financial and investment partners such as IFC -
Financial Institution under the World Bank. In 2019, successfully calling for
USD 8 million of investment in preferred shares from IFC, IFC advised
Nafoods to implement a food safety management system for the company's cold
supply chain in accordance with the system certification. Food Safety System
ISO: 22000 is widely recognized in the world. IFC's investment and technical
advisory greatly support Nafoods in their efforts to add value to their products
by applying the principles of safe and sustainable agricultural practices and
improving mechanisms. production department, which helps the group to
improve production capacity, expand export markets and develop a new fruit
seed business.
In addition, the company cooperates with Chung Hsing University of
Taiwan. The Plant Research and Breeding Institute was established with a
capacity of 6 million plant varieties per year, meeting domestic demand and
exporting to Laos and China.
Nafoods Group has exploited Southeast Asia's competitive advantage in
growing specific fruits including passion fruit, banana, dragon fruit, coconut
and citrus fruit to develop material areas of Nafoods Group. in Vietnam, Laos,
and Cambodia.
Along with the convenient location of warehouses and factories near local
seaports, more than 5000 tons of the company's fruit products (~ 85% of export
losses) are shipped to all over the country each year.
3.2. Rare
Management's mindset: The different mindset made Mr. Nguyen Manh
Hung decide to choose Que Phong, a poor border district of Nghe An province,
to build the Nafoods Seed Institute, which surprised many people when he was
far away. lack of conditions. He has a right mindset and vision when he sees
that Nghe An has a suitable climate, clean soil, low virus infection for breeds,
and keeps technological know-how safe. And so far, passion fruit has become
the main crop of Que Phong district when 1,200ha is planned for this plant.
When Nafoods identified key products, the Company found that many fruit
and vegetable products suffered from great competition from China, Thailand
and the Philippines. There are only a few products such as passion fruit, gac, we
have a competitive advantage and other products such as pineapple, lychee,
banana ... we do not have a competitive advantage compared to regional
competitors. Furthermore, we are also at a more tax disadvantage. During the
development of passion fruit trees, the company found that this is the most
suitable variety in Vietnam, although passion fruit appeared first in Taiwan,
Thailand, Malaysia, China 30 years ago, but in terms of efficiency. then in
Vietnam is still the most effective.
In 2019, Nafoods is the first and only enterprise in Vietnam to create 3
varieties of passion fruit certified and protected by the Ministry of Agriculture
and Rural Development, including Nafoods 1, Que Phong 1 and Bach Huong 1.
- Passion fruit seedlings:
The seedling product of Dai Nong 1 passion fruit seedling is produced by
Nafoods Seed Institute in a modern greenhouse system with a closed process,
strictly controlling the virus and introduced to the market since 2014. The
launch of the product This product creates a closed circle of a vertical
agricultural value chain at Nafoods Group, not only gives Nafoods Group a
significant revenue structure but also acts as a bridge, a vehicle for Nafoods
Group to control. and well manage raw material areas, ensure stable sources of
raw materials for production. Therefore, Nafoods Group has determined that
passion fruit seedling will be an important product contributing to its
differentiation and sustainable development.
- IQF frozen fruits and vegetables:
Including fast frozen processed vegetables, tubers and fruits such as:
Banana IQF, Red Dragon fruit IQF, IQF Coconut, IQF Mango, IQF Pineapple,
IQF Passion Fruit, IQF Carrot, IQF Ginger ... After the production complex and
fruit processing for export in Long An came into operation in April 2018, the
processing output and sales of these products have increased strongly,
contributing more and more to the revenue structure of Nafoods Group,
especially IQF Dragon fruit, IQF Mango and IQF Coconut.
In addition, the company has expanded cooperation relationships with a
number of financial and investment partners, such as IFC - a financial
institution under the World Bank. Nafoods is the second agricultural company
in Vietnam, invested by IFC in phase 1 with 8 million USD and committed to
continue long-term investment.
3.3 Inimitability and non-substitutability
The management's leadership ability for the staff has a great influence on
Nafoods Group. Because in the production and processing of these fruits
products can be easily replicated, but people themselves are the only difference
that cannot be reproduced, and then from different people create products.
product difference. For that reason, since its inception, Nafoods has attached
great importance to building staff to create a core competency through
organizing training on skills, knowledge and especially attitudes to ensure that
the quantity and quality are suitable for the job and the inheritance. The Group
has organized the training of 1467 turns of people, with 5205 hours of training.
This is the hardest resource to imitate and the company has exploited it well to
create differentiated products, successfully developing in areas where there are
many big competitors to complete its value chain.
3.4 Exploitability
With resource owners, including many domestic and international experts,
with a deep understanding of Vietnam's agricultural activities and the world.
Nafoods has actively actively applied information technology (IoP - Internet of
Things) into the system management system and garden control, centralized
database building, application development for agent and customer
management. ; Gradually modernize agriculture, close up to smart agriculture.
The company also started construction of a factory processing passion fruit,
vegetables, tubers and fruits for export; received Global GAP certification for
Nafoods passion fruit farm in Moc Chau. The passion fruit, vegetable and fruit
processing factory was built in Bo Bun Industrial Park, Dong Sang Commune,
Moc Chau District, Son La Province on an area of 2 hectares, the total
investment for 2 phases is 200 billion VND. .
Nafoods has invested heavily in a chain of frozen fruits and vegetables and
is now a reputable frozen fruit and vegetable producer and exporter for
fastidious markets such as Europe, Australia, America, and Korea. National,
Japanese. Nafoods products have all achieved prestigious international
certificates such as: International Quality Assurance Inspection System (SGF
IRMA); Quality standards only demonstrate and quality of whole food for retail
products KOSHER, HALAL, BRC; Food safety management system ISO
22000: 2005 / HACCP.
Some typical products of Nafoods have a significant impact on the revenue
growth of the business such as:
- Cashew nuts - value added products
These are the newly tested products of Nafoods Group in Q4 2018,
including value-added products such as cashew kernel, dried mango ... exported
to Russia, Middle East ... However, these products have yielded remarkable and
promising sales results in a short time period.
-Fresh fruit
At the end of 2017, Nafoods 'fresh fruit passion fruit product was officially
exported to Europe, marking an important step in Nafoods' business strategy.
Following that success, in 2018, fresh fruit products such as dragon fruit, sour
lemon, banana, ... were exported to Asian and Middle East markets, especially
China - Market. the world's greatest potential for fresh fruit demand.
=> Nafoods core competency assessment
At Nafood group, people are the core values of the business, so the company
always focuses on building a team of human resources with enough talent and
virtue to participate and dedicate themselves in the construction career. business
development is more and more successful.
The company determines that human resources are one of the most important
assets, contributing to creating a competitive advantage for businesses.
Therefore, resource development is really focused on by Nafoods Group
through training of skills, knowledge and especially attitude to ensure quantity,
quality, suitability and inheritance. . The enterprise has organized training
courses for 1,467 people, with 5,205 hours of training. Including outstanding
training programs such as Responsible Cultural Training and do not blame
internally; training on ISO standards, PRP regulations, hazards affecting
product quality at factories ... Selective program content, suitable for each
object, helps employees increasingly raise their hands. career, self-improvement
to meet the production and business requirements of the Company in the 4.0
era.