The COVID-19 pandemic and unprecedented measures to curb it are hugely challenging businesses, and Da Nang Rubber Joint Stock Company (DRC) is no exception. However, businesses can completely "turn risks into opportunities" if they have good decisions, said Mr. Le Hoang Khanh Nhut, General Director of DRC. Quang Trung reports.
2021 was a rough year for businesses but DRC reportedly still made very impressive results. Could you please tell about this success?
In the past time, despite numerous difficulties caused by the COVID-19 pandemic, DRC's business operations stayed safe and effective. 2020 and 2021 witnessed a miraculous performance of DRC. This was a miracle because its business performance did not decrease but increased in output, revenue, profitability and employee income in very difficult circumstances.
Particularly in 2021, its exports expanded by over 40% and its revenue reached VND4,700 billion. The increase in profitability and average income of employees in 2021 was unprecedented. DRC aimed to fetch VND4,500 billion of revenue in 2021 but its results exceeded the threshold.
What motivations and decisions helped DRC reverse the path?
The success in 2021 came from the consensus and enormous effort of all the staff and proved unprecedented right decisions of the Company's leadership, from mobilizing employees to stand with the leadership to maintain production amid complicated epidemic development to business decisions.
The COVID-19 pandemic not only posed risks to business operations but also challenged companies to confront many other adverse factors such as continuously rising input prices. As a manufacturer whose inputs account for 70% of cost, the company's business was hard hit by growing input prices such as petroleum. But, fortunately, the company managed to adopt right decisions from the very beginning: Negotiating with partners to stabilize prices on the one hand and purchasing inputs to avoid sudden price volatility on the other.
At the same time, in 2021, the company's leadership made right decisions when it shifted itself to export and successfully reaped export growth of over 40%.
DRC has reportedly also made strides in product development. Would you mind telling us more about this?
In 2022, DRC has successfully developed a new DSTAR-branded Radial tire line to penetrate the long-haul truck and passenger vehicle segment. Radial tires meet domestic and international quality standards such as National technical standards for automotive pneumatic tires (QCVN 34/BGTVT); US Department of Transportation (DOT) safety standards; European quality standards (EMARK); Indonesian National Standards (SNI); Japanese Industrial Standard (JIS); Brazilian Industrial Standards (INMETRO); Indian National Standards (BIS); Arab National Standards (GSO); and EU Registration, Evaluation, Authorization and Restriction of Chemicals (REACH).
DRC has also replaced HT steel blinds with ST to improve product quality and keep pace with advanced tire manufacturing technology of the world. Simultaneously, the company has developed cheaper SD agricultural tires to meet market demand and boost sales. The firm has also improved the quality of OTR Bias tires and developed the OTR 14.00R25 tire line to consolidate and increase the market share of tires for special vehicles.
In addition, DRC has developed new product lines such as ATV, Motocross, TBR and TBB tires with reduced specific weight for the US market. At the same time, it has perfected designing, testing and commercial production of new products such as tires for mining vehicles, giant forklift tires, giant agricultural tires, LTR tires and light weight Radial tires.
Living through the pandemic, what is the development direction of DRC in the coming time?
DRC has kept developing in both quality and output in a bid to raise the DRC brand to the world class. DRC has gradually asserted its position by securing business presence in more than 40 countries and territories, and this will certainly not stop.
In the past years, DRC has always focused on developing strategic tire products such as Bias tires, Radial tires, OTR tires or bicycle and motorbike tires for both domestic and export markets. Therefore, we will continue to promote DRC's strengths in the truck tire segment with strategic product lines available in all markets, maintain and expand domestic sales and continuously develop products for export. the company will diversify existing types and radialize DRC's own strong tire lines such as heavy-duty tires and OTR tires to realize its goal that "what the world has, DRC will have it".
Currently, DRC is conducting research for higher quality of Radial tires. DRC approved the plan to increase production capacity of Radial tires from 600,000 tires a year to 1,000,000 units.
What are DRC's business goals in 2022?
Given our proposed solutions, we are confident that we will successfully achieve our business strategic goals in 2022: Industrial output value of VND4,511 billion, total sales of VND4,608 billion, net revenue of VND4,428 billion and pre-tax profit of VND320 billion.
Thank you very much!
By Vietnam Business Forum