Simexco DAKLAK :Turning Difficulties and Challenges into Motivation for Development

2:25:13 PM | 14/2/2023

Epidemic outbreaks and political and military conflicts in the world have directly hit enterprises, especially exporters. Overcoming difficulties and challenges in the way, many companies seized the opportunity to upstream impressive growth and Dak Lak 2-9 Import-Export Company Limited (Simexco Daklak) is a typical example. Entrepreneur Le Duc Huy, General Director of Simexco Daklak, gives an exclusive interview to Vietnam Business Forum on this journey to go against the wind.

Could you please introduce operations of Simexco Daklak?

Established in 1993 and starting to export coffee in 1994, Simexco Daklak has 30 years of experience in coffee export, also a core product of the company today. Simexco DakLak chose the right approach to local potential and strengths.

On average, Simexco Daklak exports 105,000 tons of coffee and supplies 20,000 tons of coffee to domestic roasters a year. In 2021 and 2022, despite facing many difficulties caused by the COVID-19 epidemic and economic and political fluctuations in the world, Simexco Daklak still achieved high growth compared to the previous two years (output increased by 20-30% on average and revenue jumped to over VND6,500 billion).

What helped Simexco Daklak achieve these impressive results in the context of economic difficulties, especially the complicated COVID-19 epidemic development?

The COVID-19 epidemic, especially during lockdown and social distancing periods in 2021, became a major challenge for businesses. However, it was also a motivation for them to rethink, awaken themselves, restructure business models, and apply digital transformation. For its part, Simexco Daklak effectively applied digital transformation and information technology to operating production and business activities, thus not only maintaining continuous operation but also bringing high efficiency.

Even in the peak of the epidemic when many factories had to stop production, Simexco DakLak still made high growth, sometimes up to 70%. Simexco Daklak's orders were executed very smoothly and on time, helping enhance its prestige and increase customers and orders. This became a driving force for its growth in 2021. In 2022, its output continued to expand 20% and sales rose by 30%.

Although they have not yet managed to address difficulties caused by the COVID-19 pandemic, many companies are now facing an economic and political crisis in the world. Would you be kind enough to detail the successful pandemic recovery of Simexco Daklak?

Our mentality and internal strength will be strengthened if we manage to overcome difficulties. I often tell my employees that the COVID-19 pandemic may not be the most severe and greater difficulties are ahead of us. So, if that happens, what will we do? It is certain that we still have to face and find solutions. The spirit of solidarity, attachment, creativity and innovation must always be fostered. We make progress today but we may become obsolete tomorrow. So, we have to encourage each other and try harder together.

As one of leading coffee exporters, with a production capacity reaching hundreds of tons a day and export shipments to more than 100 countries, Simexco Daklak still has to work hard to highlight the quality and value of Vietnamese coffee beside the output. Therefore, even though we export hundreds of thousands of tons of coffee every year, when we export a container of specialty coffee, we are still touched and proud.

While many companies fail in production cooperation with farmers, why has Simexco Daklak been quite successful at this?

Every business seeks profit. But for Simexco Daklak, we always put the interests of our partners first and foremost. I think that we will be stronger if our stakeholders in the supply chain are strong. We would rather make a big cake together and share interests together than fight for a small cake.

Simexco Daklak is one of a few successful coffee businesses. Is the coffee business too harsh?

Agricultural business, including coffee, is very risky because it requires a huge capital but market prices are volatile. Huge outstanding debts and large stockpiles are common while prices are very unpredictable. Therefore, in the coffee business, it is very important to be agile and control risks, which is more important than making money. You must not be too greedy when you are profitable and you should not lose temper when you are making a loss!

I had the opportunity to participate in a few startup programs, noticed that many young people are often confused when starting a business because they want to do everything right away and do not know what to do first and what to do later. I often recommend that whatever you do, you should determine how much you can do and have risk management plans. I hope you will go long and go far rather than go fast.

From its successes achieved, will Simexco Daklak jump forward?

The world is likely to face recession risks in 2023. Although we also want to make huge advance from the foundation we have built, the current context tells us to be cautious. Therefore, in 2023 Simexco Daklak set a growth target equal to its 5-year growth average, not based on the performance in 2022.

Simexco DakLak, established in 1993, is one of the leading coffee exporters in Vietnam - the world's largest Robusta coffee exporter. Simexco Daklak has built a farm-based purchase network, controlled quality in key coffee growing areas, invested in modern coffee processing factories and training systems for highly qualified employees. The company is currently cooperating with 3,200 farmer households to form a closed supply chain from farm to fork. Its modern factories can process 500 tons a day, with the output exported to more than 125 countries.

By opting for a moderate growth target, Simexco Daklak will focus on what will bring higher added value. In addition to effectively exploiting the export market, Simexco Daklak will continue to foster cooperation with farmers to help them reduce production costs and increase incomes and will then help itself obtain a stable and quality source of inputs.

Moreover, Simexco Daklak will strengthen domestic sales channels. Currently, the company has become an effective supplier for domestic factories. In my opinion, it's time to change the mindset, to see Vietnam as a food producer of the world, not just an exporter of raw materials, and Vietnam will be the kitchen of the world. This mindset helps us move from exporting raw materials to investing in downstream processing.

Thank you very much!

By Quoc Hung, Vietnam Business Forum