Hanoi businesses have banked on stellar performance in the second quarter, anticipating a notable leap forward.

Local workers at the Thuong Dinh Footwear Company factory. Photo: Nam Le

Hanoi-based Traphaco, one of the leading herbal pharmaceutical companies, continues to grow and has set a 2024 target for consolidated sales of nearly VND2.5 trillion (US$98.3 million) and consolidated profit after tax of VND303 billion (US$12 million), representing year-on-year growth rates of 7% and 6%, respectively. 

According to Dao Thuy Ha, Deputy General Director of Traphaco, healthcare spending in Vietnam has been affected by the economic downturn but is still growing. Moreover, new trends create opportunities for local businesses that dare to change.

The company has also made several changes to its 2024 retail distribution policy, which is designed to win over large customers and create opportunities for smaller groups that have an advantage in one or two specific product lines, Ha said.

As a result, the number of new customers has increased significantly since the beginning of the year, with more than 1,500 new customers signed up, a 6% increase from last year, and revenue in the first quarter of 2024 was 1,043% ahead of plan.

In the ETC (ethical medicines) channel, the company is targeting 20% growth compared to 2023. 

"The entire ETC treatment system across the country has seen positive signals in terms of revenue in the first quarter of 2024," she said, expecting that a number of new policies in the sector will encourage health activities and people's use of health services, thereby driving strong growth in the ETC channel.

Ha's more optimistic view is based on a forecast by Mirae Asset Securities Company, which predicts that the pharmaceutical industry will maintain a compound annual growth rate (CAGR) of 6% from 2023 to 2028. In 2024 alone, the value of the pharmaceutical industry is expected to grow by 9.1%.

The Traphaco executive believed that in 2024, Vietnam's economy will continue to face difficulties and volatility, with major challenges for the healthcare industry in particular due to falling incomes, resulting in a decline in consumer demand.

A source from TopCare Vietnam, which operates in the technology sector, said that the reduction of interest rates by banks helps companies to have better access to capital for reinvestment as well as long-term purposes at low-interest rates.

Businesses are facing first-quarter results that account for only about 10% of total annual sales, as well as the gloomy global and Vietnamese economic situation, leading to a decline in customer purchases, according to the company representative.

With such an outlook, the company is preparing capital sources, human resources, skills training and new market knowledge for ongoing projects.

"In-house training and recruitment of suitable personnel is an important issue in order to achieve the plans for the coming quarters or the whole year 2024," he said.

As a well-known brand in the domestic consumer market, Hanoi's Thuong Dinh Footwear Company continues to explore additional channels and domestic sales methods to increase sales and seek potential business partnerships or existing advantages at the factory. 

In the first quarter, the company faced challenges due to reduced consumer demand and low domestic consumption, with almost no export orders and falling employment and income for workers, said Nguyen Van Khiem, the company's CEO. 

Hanoi-based CODY Pharma International Joint Stock Company, operating in the functional food sector, will allocate production resources wisely to ensure production and delivery schedules, focus on maintaining product quality control, actively seek export orders, and may concentrate on essential consumer goods categories, said the company's CEO Nguyen Van Hung.

As for CODY's Lotus Tea products, the company has recently planted nearly 20 hectares of Lotus Bach Diep (West Lake Lotus) varieties under organic standards to secure high quality raw materials and conduct in-depth research on various lotus-based products to diversify product offerings and increase export opportunities. 

It is also expanding its distribution network and showroom, such as in the area of Uncle Ho's Stilt House. In addition, the company has built up its retail outlets at airports and collaborated with South Korean retail chains and travel companies to promote West Lake Lotus Tea to international tourists from China, Taiwan, South Korea and Japan at Hanoi's tourist destinations. 

In its report on first-quarter economic performance, which also includes a forecast for 2024, the General Statistics Office said that Vietnamese economy growth will be satisfactory during this period, while external risks would remain manageable. 

A combination of traditional and emerging growth drivers is being skilfully harnessed, ensuring macroeconomic stability, maintaining crucial balances and boosting business and public confidence.

GDP growth in the second quarter is expected to remain optimistic, possibly reaching 5.9-6.3%, contributing to 5.8-6.2% growth in the first half of 2024. Annual growth is projected at 6-6.5% (baseline scenario), in line with government targets, or even more optimistically at around 6.5-7% (positive scenario).

Local companies should strengthen their management and financial capabilities to sustain business operations, achieve a more favourable growth rate compared to the previous quarter and strengthen competitiveness, the report emphasized.