Challenge - explained

Taekwang Industrial is an integrated manufacturer of Synthetic Fiber, textile, Petrochemical and Advanced Material based in Korea and with office in Shanghai (China). Taekwang Industrial is in strategic consideration to expand the business in Vietnam particularly NPK Fertiliser business. There was an absence of information on demand and supply chain, Taekwang wondered whether it would be oversupplied when they penetrated in this market. They would like to get in-depth analysis on financial profitability of the business in this market but were limited to accessing financial data of players. Also, they needed to understand the distribution system if they penetrated Vietnam market.

Solution:

Taekwang chose FiinResearch to help them conduct the market study on NPK Fertiliser Market in Vietnam. The main objectives of the assignment were: To assess and evaluate Supply – Demand for NPK Fertilisers for Vietnam market whether it will be oversupplied and in what timeline based on various driving factors such as consumption forecast growth and increased capability of local and foreign coming plants. To understand the distribution systems and top 10 key players in distributing and retailing the fertilisers to end-user customers such as farmers To evaluate the financial profitability and operational efficiency of the sector by analyzing two major selected players namely Japan Vietnam Fertilizers (“JVF”) and General Materials & Biochemistry Fertilizers JSC (“HSI”)

Results:

With the comprehensive information and deep dive analysis in the report conducted by FiinResearch, Taekwang sucessfully had its business expansion plan implemented by establishing KVF in Vietnam in May 2016 for its fertilizer business, holding 51% stakes of the company and 49% stakes belongs to Huchems. Taekwang Co. announced that they held a ground-breaking ceremony to build a composite fertilizer plant in the Hiep Phuoc Industrial Complex in Ho Chi Minh City, Vietnam for the first time as a Korean company on 20th July 2016. They built a nitrogen, phosphorus and potassium (NPK) composite fertilizer plant with an annual production capacity of 360,000 tons with an investment of US$ 60 million on land of 90,000 square meters.