Vietnam's top wine producer hoping for sweet windfall
Swelling disposable incomes, a discernible shift in taste and a company shake-up has left Vietnam's leading wine
producer licking its lips in anticipation of an expected sales boom.
Since it first began specialising in making wine in 1993, the Hanoi-based Thang Long company has seen its
profits rise from less than 200,000 dollars to a respectable 1.3 million in 2001 from revenue of 4.25 million
dollars.
Pham Bang Ngan, the company's general director, expects
profit margins to rise exponentially after its equitization or
semi-privatization which began in 2000 but was only
completed mid-way through last year.
It is just one of 861 companies from the more than 5,600
state-owned enterprises that have sold off stock in
themselves in a bid to raise capital and improve efficiency
since the equitization process kicked off in 1995.
In Thang Long's case, the government has retained a 40
percent stake, domestic investors have snapped up 20
percent, while its 300 staff and management hold the balance.
"This has had a big effect on the company now that everyone
owes some capital because staff are more proactive," Ngan said.
"Even I have to work harder and continually strive to improve the company's performance or else someone will
replace me. I have to ensure that shareholder value grows."
Surprisingly, he says sales growth for the most bourgeois of tipples lies with Vietnam's lower-middle classes,
despite GDP per capita in the communist-ruled country hovering at a paltry 430 dollars.
"The upper-middle classes aspire to drink imported wine, but more and more people in the countryside and
among the urban lower-middle classes are changing from drinking rice wine at weddings and other celebrations
to fruit-based wine."
Ngan attributes the phenomenon to the ripple effects of Vietnam's gradual transition to a socialist-leaning market
economy, which has boosted personal wealth levels in the major cities.
The wine's sweet, but highly palatable taste, and the fact that at less than one dollar a bottle, it costs almost the
same as the best quality rice wine, are encouraging people to make the switch, he added.
However, unlike its French, Australian, Chilean or even Japanese elder cousins, the majority of Vietnamese wine
is not made from grapes, though it is not for lack of trying.
Strawberries, pineapples, apricots and a local speciality, tao meo or wild apples grown in isolated, mountainous
northern areas, are the usual ingredients.
"The truth is, we really want to produce grape wine but Vietnam does not have the expertise nor grapes of
sufficient quality to make it," Ngan said.
Agence France Presse - August 04, 2002.
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