Rely the Stock Investment newspaper in shareholder meeting this year, Chairman & CEO of Phu Nhuan Jewelry Joint Stock Company (PNJ), Ms.Cao Thi Ngoc Dung said: PNJ is driven by continued focus on the core competencies of production and jewelry trading to sustainable development.
At the same time, PNJ currently in the process of restructuring the system of governance and the executive apparatus to hold the number one position on the Vietnam market and aims to become the top retailer in Asia.
Reporter: The policy of the government bank and the difficulties of the market, which impacted and significantly affected to the operations of many companies in this industry. Why is PNJ still achieving the satisfactory profitability in the last year?
Ms.Cao Thi Ngoc Dung: The jewelry trading activities in the past few years were difficult due to the purchasing power reduced and consumers spending slipped. In particular, the changes in management policies of the Government for the gold market had a certain impact on the operation of lots businesses in this area, including PNJ. However, since the first year in operation to date, the policy and strategy of PNJ has selected core competence is to develop production, sales of jewelry to achieve revenue and profit. Therefore, a decrease in the trading of gold bars will not affect the profit of PNJ.
Moreover, in order to adapt to the market situation, PNJ has conducted the market research and design jewelry products to match with the customer tastes in the economic context has difficulty and consumers spending slipped. Specifically, unlike before, now PNJ’s jewelry is manufactured with lightweight, slender, thin, but the design still ensures the sophistication, luxury and special, which still meets the needs of the large, but very light weight, reasonable value product. This showing clearly in the 2012 business results: Profit from trading gold bars is only about 5% of total profit, while jewelry sales still growing stable, reaches 3,647 billion, up to 3% over the same period; Consolidated profit after tax reached over 254 billion, or 96% of the year plan; dividend rate ensure at 23%.
Reporter: So what is the business plan of PNJ in 2013?
Ms. Cao Thi Ngoc Dung: In 2013, the purchasing power has not improved much, but we have set a target of 20% revenue growth and profit unincorporated equivalent to 2012. PNJ have confidence in the policy lag even though the business situation in the first quarter did not achieve as expected, the company still expects to the last 3 quarter. If in 2011, PNJ has extraordinary profits from the trading of gold bars and in 2012 from the divestment then in 2013, PNJ will further step up towards the core business lines in many different solutions to ensure profitability. Accordingly, PNJ sets goals in 2013: gold-jewelry sales have increased by 18%; Consolidated profit after tax reaches 241 billion; dividend expected 20%. In particular, PNJ will continue to implement the restructuring project, which aimed at putting the management achieve the highest efficiency.
Reporter: How to PNJ promote further development on core competencies?
Ms.Cao Thi Ngoc Dung: PNJ jewelry factory being put into operation in late 2012 at Go Vap District, HCMC (with a capacity of 4 million pieces / year) is a huge advantage in strengthening production and trading jewelry. In recent years, due to limited production premises so PNJ can not promote wholesaler and exporter jewelry, but now, when the factory go into operation gradually stabilize, PNJ will maximize geographical balance of the domestic market as well as export market. Besides, administration system and information technology are also improve under the development demand together with qualified human resources, which were elevated with professional standards as restructuring required; it will help PNJ have more solid steps and maximize our core operations and inherent strengths.
Reporter: What are your evaluations of market potential and jewelry demand of consumers?
Ms.Cao Thi Ngoc Dung: The past 2012, the economic situation was still tough, leaded to the purchasing power of consumer goods industry is reduced sharply as: Fashion decreased to 40-50%, while jewelry industry dropped only 12%. This indicates that, for Vietnam market, the field of manufacturing and trading jewelry is still potential to exploit. By these reasons: first, the notion of Asians on stored gold is still the first priority, consumption culture and saving gold has always existed and developed. Second, as the economy growths, consumption culture also developed under, so customers will choose to buy products with prestigious brand. On the other hand, if based on the per capita then the weight of jewelry that owned by Vietnamese people today is still relatively low than others country in Asia. Therefore, the demand for jewelry is still large.
According to the World Gold Council, 2012, the jewelry market of Vietnam declined by 12%, but in context, PNJ gold jewelry sales growth was 3%. This proves that, gold-jewelry has always been the top priority choice and PNJ’s jewelry has always been consumer trust.
Reporter: Could you share the restructuring and efficiency brings to PNJ when doing this project?
Ms.Cao Thi Ngoc Dung: To do this, PNJ has hired foreign consultants to reassess what PNJ have like: infrastructure potential, human potential and include the revaluation of producing system management and business; so that can determine the size and position of PNJ with the No. 1 on the Vietnam market and top in Asia. Based on that, PNJ has changed the organizational structure as well as the executive apparatus in response to international governance standards. After sorted, put new governance system to apply, we had cut down the operating costs, while ensured increasing salary for employees. New administrative apparatus is streamlined and more efficiently, which contribute to ensure the objective of controlling operation costs to increase profits.
Reporter: Please indicate the PNJ’s development orientation in the next 10 years?
Ms. Cao Thi Ngoc Dung: To implement the mission and vision of PNJ that we have identified, the next 10 years, PNJ will focus on the following three main orientations: First, we will focus on building PNJ factory, which has modern production technology, high output, ensure the quality and efficiency, fully meet the market demand; Second, we invest more in the designing, up to now PNJ always focused on this stage. We have hired foreign designers to train for PNJ’s design team. Third, PNJ will exploit synchronously 3 markets include the wholesale market, the retail market and export market, in which, the retail market is still determined to bring significant revenue. In business activities, the past few years, PNJ only concentrated in the central districts of large cities. In the next time, PNJ continue to expand its network, increase sales. Besides, PNJ will push the wholesale gold-jewelry for stores across the country. PNJ still has strength in its supply wholesaler so far, particularly in provinces, especially in the provinces areas, especially since the introduction of Decree No. 24, the gold shop pay more attention to the quality of branded jewelry products, so the demand for PNJ jewelry will certainly more.
By Thuy Vinh, Securities Investment newspaper.
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