In 2022, the world economy continued to fall into a "multi-crisis" in the face of great challenges, rapid fluctuations, unpredictable and high instability from climate change and conflict. There is still no end to the military conflict between Russia and Ukraine... Since then, the global supply chain has been broken, it is difficult to circulate goods, the price of production materials has increased - decreased dramatically, and inflation has increased to the highest level in many decades…, affecting the Group's production and business activities when most of our production materials are imported from abroad, and the inflation caused that Consumers are gradually tightening their spending. The year of 2023 continues to be considered an extremely difficult year and how can KIDO overcome this difficult period.
Looking back on the past 5 years, with the orientation "Design for Success", we have been on the right track, affirming the internal strength and leading capacity of the Board of Directors, capacity of leaders of the Group continuously achieving new successes. In the first stage of the implementation process, KIDO designed and upgraded the management system by applying information technology in operation, contributing to the company's value chain from a very early age with the following platforms: management such as SAP, DMS, KIDO Shop..., helping to improve business efficiency, managing distributor system and market team... so that each member quickly adapts to the digital transformation model, volume and reduced time getting the job done. At the same time, the strength of the channel system is maximized and KIDO has successfully designed and expanded the sales channel system nationwide. In the period 2017 - present, the Group has increased the number of points of sale of frozen products from 70,000 points of sale to 120,000 points of sale nationwide. In addition, the system of 450,000 points of sale in the dry products, with proper investment efforts to maintain and, has grown steadily with a wide coverage, making KIDO become one of the companies with the best sales and the most effective system in the country. Along with that is the outstanding success in designing and operating the products under the Group.
Entering in 2023, KIDO marks the 30-year journey of establishment and affirms its leading position in the essential food market by leading the ice cream industry in Vietnam (44.5% market share), 1st position in the margarine segment in Vietnam (74.9% market share), 2nd position in the whole country's edible oil business unit. KIDO Group has now fully converged factors to move to a new development phase - "Centralized Management".
The Centralized Management model has both strategic and operational significance, helping to ensure consistency in development strategy, synchronization in operating policies and in business activities of this Group with the announced first steps from the first half of 2022. Accordingly, the management operation will be located at KIDO to perform functions such as: Supporting subsidiaries in business strategy orientation and development model; Guiding of investment activities, and business strategies for companies in the group; Supporting subsidiaries, BUs (Business Units) in legal, financial, IT infrastructure and other issues related to daily operations… This is one of the important strategies, in line with the Group's current operating structure. For KIDO, the Centralized Management strategy will be reflected on all fronts of group operation, in which 05 main aspects are focused, including: Operational Strategy - Brand Development & Management - Development of Distribution Channel System - Human Resource Management - Finance & Investment Activities. Specifically:
The Board of Directors and the Board of Management will keep the task of directing and controlling all activities of the company. The Executive Management Committee (EMC) will lead and supervise the implementation of the Group's strategic goals, drive the overall business results. This matches the role and mission of Team 1, Team 2, Team 3 at the present time. Leading to decisions, strategies are agreed to be deployed from top to bottom.
BRAND DEVELOPMENT AND MANAGEMENT
KIDO Group currently owns many famous brands, which are among the top market leaders in Vietnam such as Merino, Celano, Tuong An (margarine and edible oil products), KIDO's Bakery... All current brands existing or new brands are centrally managed by the Group. At the same time, strategies for promotion, brand development, Marketing and Communication must all be approved by the Group and implemented by the Board of Directors.
THE DEVELOPMENT OF DISTRIBUTION CHANNEL SYSTEM
The group currently holds a wide distribution channel system in Vietnam with 450,000 points of sale of essential food products, 120,000 points of sale of frozen products. Based on the compatibility of each product line with the distribution channel, the Group will consider and allocate products/categories into each distribution channel or orient to develop appropriate new distribution channels. Typically, the bakery business unit (Fresh Cakes and Mooncakes) is developing synergistically on the Group's distribution channel system of dry and frozen products. As part of the development strategy throughout Vietnam, the Group will continue to expand and develop the distribution channel system for the bakery business unit in addition to use the current channel strengths. On the other hand, the spice business unit will develop along with Tuong An's existing distribution channel system. This helps to increase the operational efficiency of the new BU, and at the same time, saves time, cost and personnel to operate the channel.
HUMAN RESOURCE MANAGEMENT
All nearly 4,000 employees from member companies and factories are managed by the Human Resources Department of the Group. Based on the different resource development needs, and the strengths and weaknesses of each employee, the Human Resources Department of the Group will conduct planning, arrangement, exploitation, and placement of personnel in appropriate positions/sectors in order to promote the working capacity of employees to the maximum, achieve high efficiency in work. Each employee, when assigned and appointed to the right position, will create a lot of value for the development of the company and its industry. In the case of limited resources, how to optimize. On the other hand, the Group also seeks, trains and fosters high-quality labor resources, allocates them to key positions of the Group, creates added value under the motto of win-win between the Group and workers.
FINANCE & INVESTMENT ACTIVITIES
Cash flows, investment strategies, capital mobilization, etc. will be directly managed and controlled by the Group, ensuring effective cash flow, thereby generating profits for the Group in addition to main business production activities. Accordingly, based on the source of money and development needs at each time, the Group will continue to study the development of the market, look for opportunities for cooperation, M&A, select and be willing to acquire potential companies and product categories to expand the Group's essential food portfolio, continuing to build a strong new category like the way we have successfully done for KIDO Foods (Ice cream business unit); Tuong An, KIDO Nha Be, Vocarimex (edible oil business unit) simultaneously have M&A strategies for other sectors in the essential food sector in each period.
At the same time, we continue to focus on monitoring and supervising to allocate appropriate investment capital for potential industries with good room for development, especially when combined with the existing system of the company. The Group will bring outstanding financial performance.
In the coming time, the economy is expected to continue to have many fluctuations when the war situation between Russia - Ukraine has not come to an end, the supply chain has not recovered, and inflation is still one of the impacts directly influencing consumer behavior. Therefore, KIDO sets a growth target in 2023, specifically, the planned net revenue is VND 15,000 billion, an increase of 19.7% compared to 2022 and the target profit before tax is VND 900 billion, an increase of 76.3% compared to 2022.
With a foundation of sustainable development, combined with the strengthening of centralized management, we will make efforts, resonating internal and external strengths to fulfill the set targets, as well as ensure the best long-term value for shareholders in all current and future business activities of the KIDO Group.
Together with a team of enthusiastic and dedicated staff, I hope that KIDO Group will continue to receive the support and companionship of shareholders, investors, and customers to join KIDO to conquer the new target in the near future.
I wish you all
HEALTH - HAPPINESS - SUCCESS!
TRAN KIM THANH
Chairman of The Board of Director