A probe at Swiss association ruling Vietnam MES industry in 2020

dksh việt nam

To conduct business in Vietnam since 1890

DKSH, as known as DiethelmKellerSiberHegner is a multinational corporation providing Asia’s top MES (Market Expansion Service) that helps a product/ brand to infiltrate into a new or existing market and reach the desired market share. DKSH Vietnam is a part of a widespread network with a complete value chain including logistics, sales, research, and after-sales service, etc. that DKSH has formed in 36 countries worldwide.

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Born in 1865 in Zürich, Switzerland, DKSH now has over 800 business establishments all over the world. The corporation has a deep-rooted business tradition in the Asia-Pacific region. Over the last decades, it has been widely recognized for having strongly influenced Asia’s MES service market for the better, and for continuing to support Asia’s economic individuals and communities until today.

DKSH has been a licensed business for sales, marketing, and logistics services in Vietnam since 1999. However, its presence in Vietnam as a market development provider kicked off much earlier – 130 years ago. DKSH has penetrated Vietnam since 1890 in both the South and North under its former name Diethelm Vietnam Co., Ltd.

In 2009, along with the corporation’s global shift, Diethelm Vietnam Co., Ltd. was officially renamed as DKSH Vietnam Co., Ltd. The company currently has over 5000 employees in 21 business establishments across the country, providing MES services for Vietnamese brands in numerous industries including pharmaceuticals, chemicals, consumer goods, and technology. Vingroup’s VinFa, MSD Vietnam, Nestlé Vietnam, Pham Nguyen Confectionery, PhinDeli, Tipco, etc. are major names in working partnerships with DKSH.

DKSH Vietnam’s financial performance

 

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In the 2016-2019 period, DKSH Vietnam maintained a steady development rate with impressive growth numbers. The company witnessed an upward flow in profits as the ROA and ROE ratios also kept up at high thresholds. After a slight decline in 2018, DKSH’s ROE and owner’s equity continued to soar in 2019.

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Source: VIRAC

In 2019, the company earned a net profit of 370 million USD, in which after-tax profit reached 21.7 million USD. In the consumer goods industry, DKSH successfully shields its lead among the MES companies, closely followed by Mesa Group and New Viet Dairy with profits between 230 and 250 million USD.

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Source: VIRAC

In the ICT industry, DKSH faces great competition from the Vietnamese enterprise Digiworld who also earned approximately 370 million USD. However, Digiworld’s after-tax revenue was only 7 million USD, falling far behind DKSH due to a low-profit margin of only 6.5%.

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Source: VIRAC, CafeF

DKSH’s gross profit in Asia in 2019 reached 13 billion USD, in which net profit accounts for 200 million USD. The largest contributors to this impressive performance include Thailand (⅓ of total result), Mainland China (¼ of total result), and Singapore/Malaysia (⅕ of total result). In terms of industry structure, 52% of DKSH’s revenue comes from the healthcare industry while 36% comes from consumer goods.

The domestic MES market and DKSH Vietnam’s sustainable development strategy

Vietnam plays a critical role in DKSH development strategy in multiple aspects. To begin with, the economic growth in Asia in general and Vietnam, in particular, is highly promising compared to aged markets like Europe. Other favorable conditions including a propitious middle class emerging in Vietnam, as well as many newly signed trade agreements that ensure to create strong economic momentum. As a result, DKSH has been proposing many sustainable development strategies, pouring a relatively large investment into Vietnam following its motto “to invest in human and infrastructure is to invest in service quality”.

DKSH Vietnam: To invest in modern facilities

In terms of infrastructure, DKSH Vietnam has instituted 21 business establishments in Vietnam including offices, distribution centers, transit stations, warehouses, etc. mainly in Hanoi, Ho Chi Minh City, Binh Duong, and Da Nang. In recent years, DKSH inaugurated lots of modern, fully equipped development centers that aim to improve its services as well as to provide training for its employees.

These centers are responsible for providing technical assistance and research for all DKSH business activities. In addition, the inner laboratories play a crucial role in DKSH’s R&D work to develop the most trendy, comprehensive, and innovative solutions for the customers. DKSH is reported to have generously invested in modern infrastructure for industries like paint coatings, F&B, and personal care.

DKSH’s two current key industries in Vietnam are consumer goods and healthcare. However, the company also distributes a variety of products from condoms to chemicals, pharmaceuticals, or heavy equipment, providing MES services to more than 100,000 domestic businesses. DKSH’s operating model which is easy to scale up and difficult to copy with clear advantages in import and export has removed many barriers for Vietnamese businesses.

DKSH Vietnam: To offer Made-in-Vietnam products into the global market

While lots of Vietnamese businesses still embrace the domestic market, DKSH has deployed a new, risky perspective that is to bring domestic products to the world market. DKSH has been successfully supporting PhinDeli – a coffee brand by the Vietnamese “million-dollar mayor” Pham Dinh Nguyen to follow this direction. DKSH and PhinDeli’s cooperation results in multiple creative and inspiring campaigns that positively influence countless Vietnamese brands.

With its existing foreign business partners and complete cooperating systems in countries all over the world, this geographically-wide approach is a perfect fit for DKSH. The company is unlocking the potential of sustainable development, opening up new prospects for “Made in Vietnam” products in overseas markets.

 


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