Dear all THACO staff,

The global economy in 2020 is forecast to witness a 2.5-percent growth with increasing tensions in commerce and geopolitics causing uncertainties. Vietnam is integrating deeper into ASEAN and the global economy, creating both challenges and opportunities for growth. The Vietnamese government continues to come up with programs and solutions to increase the national competitiveness, thus boosting the socio-economic development. Vietnam's 2020 GDP growth is estimated at 6.8 percent.

Year 2020 is the 3rd year in THACO's strategy to become a multi-industry group which takes Automotive and Mechanics as the core business, Agri and Construction-Investment as its main businesses, and Logistics and Commerce-Service as the supporting businesses.
          
For this reason, it is a must to fulfill the set targets, speed up the management restructuring plan for each business sector in the THACO Group as follows:

1. Automotive and Mechanics (including vehicles, vehicle parts, and mechanical parts)

The 2020 main objective of the Automotive and Mechanics is "Maintaining the leading position in Vietnam's auto market at the share of over 30 percent, increasing the export volumes of vehicles and vehicle parts, increasing the production volumes, developing the support industries, enabling mechanics to create THACO's advantages in industry, agri, and construction with the products in agri engineering, construction engineering, and industrial machinery engineering, and building a national-level mechanical center in Chu Lai, Quang Nam province".

The targeted domestic auto sales are over 100,000 units, including 70,000 Kia, Mazda, Peugeot passenger cars, over 30,000 trucks, buses, and minibuses. Accordingly, the target revenue mounts to VND70 trillion. Regarding auto export, THACO plans to export more than 1,200 vehicles of different types, or over USD50 million in revenue.

We also plan to improve our cooperation with foreign partners, enhance production management for better productivity and quality, enhance product R&D in order to develop the full range of vehicles, meeting the domestic customized demands. We will also further develop exported products to satisfy the standards and regulations of the importers, provide after-sales services to fulfill long-term export volume targets.
Furthermore, THACO engages in managing auto making as its spearhead business, securing the revenues and profits of THACO's Automotive and Mechanical business.
     
THACO set the 2020 export target of over VND4.4 trillion for auto parts, including VND780 billion from outside customers and nearly USD30 million from exports.

We keep investing in auto part factories with the investment capital of USD100 million, planning to achieve USD70 million from annual exports. These factories will start operations by the end of 2020. Other auto part export projects are also on the way.

Revenues from mechanics are estimated at VND3.5 trillion, including VND300 billion from outside customers, and over USD3 million from exports. We also strengthen our cooperation with other enterprises in order to implement high-quality and affordable customized production.

The support industries and mechanics will be managed as the 2 main businesses in Quang Nam province with annually increased revenues and profit targets.

Sixty two new auto showrooms will be built (including 19 Kia showrooms, 19 Mazda showrooms, 7 Peugeot showrooms, 5 BMW Full Dealerships, and 12 Truck & Bus Centers), totaling 325 showrooms nationwide by the end of the year.

Professional training programs will be deployed at the branches/dealerships to improve customer service qualities, embracing the philosophy "Dedicated and customer-centric services".
The management mechanism is consolidated in terms of distribution network. The branches and dealerships are governed by 3 brand groups (Kia & Mazda, Peugeot & BMW, Trucks & Buses), 2 regional branches (Northern and Southern regions), 2 main markets (Hanoi and Ho Chi Minh City), thus improving leadership skills for the unit leaders.

2. Agri:

THACO set the 2020 target for agri: "Improving the agricultural breeds,combining orchards and beef cattle farms to create a large-scale organic production ecosystem which is based on a mechanized value chain from farming, preservation, transport, processing, and consuming (this chain is implemented separately and collaboratively with Hoang Anh Gia Lai Agrico); implementing pig farming in collaboration with Hung Vuong Corp; supporting Hung Vuong Corp in its management restructuring and development in farming, animal nutrition production, fishery processing and export, making efforts in creating the foundations and stability in agri production, generating more revenues and profits."

THADI set its 2020 export target of 150,000 tons of fruits, VND2.5 trillion in revenues, underwriting 650,000 tons from HAGL Agrico worth VND6 trillion, breeding 90,000 beef cattle, 30,000 sows, and 800,000 pigs, and providing agricultural supplies for farms belonging to THADI and HAGL Agrico.

THADI's 2020 total revenues are forecast at VND17 trillion. 

Fruit trees will be planted on 6,000 hectares, increasing THADI's farming area to 14,000 hectares by the end of 2020. THADI also helps HAGL Agrico plant new trees on 10,000 hectares, totaling 30,000 hectares for the latter in 2020. New fruit processing plants and packaging plants will be developed in Chu Lai Agri-Forestry IP. In the meantime, in northern Thai Binh province, the Agri IP will operate in different phases.

Due to enlarged development scale, the managing mechanism includes THADI as the parent company and its subsidiaries which will be in charge of farming, processing, producing and supplying agricultural supplies, providing underwriting services and exports. The company plans to recruit around 2,000 employees in 2020.

3. Investment - Construction:

In 2020, the Investment-Construction aims to "vigorously implement the infrastructure projects (transport and logistics infrastructures in IPs and urban areas), urban areas, complexes (commercial, office, apartment buildings with auto showrooms), and housing projects to complete the operation model and to make good use of THACO's land assets."

In Ho Chi Minh City: we will speed up construction to complete Thu Thiem 2 Bridge in September so that it can open to traffic in December, 2020. The legal status will be finished for breaking ground for the Central Square and Riverside Park. Investment models for real estate development will be continued so that they can become the benchmarks for developing the brands for urban areas, real estate projects. We will complete legal procedures and project designs to start construction.

     In Myanmar: the company continues to finish apartments in Block B1 to meet the handover schedules, completes the legal licenses for phase-2 development and phase-1 adjustments.
In other Vietnamese provinces: we will submit the Real-estate project reports and the legal files to obtain the construction licenses for 6 complexes in Danang, Long An, Kien Giang, Bao Loc, Hung Yen, and Dak Lak each.
          The company also provides consulting service for the construction of 2 auto part factories and 59 auto showrooms, irrigation systems, transport systems, farms, fruit processing factories, and agricultural product packaging factories.
          Project Management Units are organized according to regions, product types, or development phases. A board includes the operations management departments at the Project Management Office and the Construction Managing Board at each construction site.

4. Logistics:

THACO's Logistics aims to "increase A-to-Z logistics service for external customers to establish two-way freight transport at Chu Lai Port, cut logistics costs, and gradually become a leading logistics service provider in central Vietnam, optimize the logistical processes to minimize transport costs for THACO's Automotive and Mechanical sectors, and to provide A-to-Z logistics service for the Agri and Forestry sectors."

Our logistics set the target of VND1.1 trillion in 2020, including VND380 billion from external revenues. The cargo volumes at Chu Lai Port are estimated at over 3 million tons. About 92,000 completed vehicles will be transported to showrooms and dealerships nationwide. 17,000 goods containers will be handled, including 10,800 containers of agricultural products which will be transported from farms in Laos, Cambodia, and Vietnam’s Central Highlands to ports and export destinations.

5. Commerce:

THACO Commerce set the aims to "support and act as the output for THACO's main businesses, establish the "One stop, multiple services" model including commercial centers, convention centers, offices, food courts, recreational centers to create an integrated and distinctive ecosystem for customers".

In 2020, SOCAR Sala Thu Thiem and SOCAR Chu Lai Commercial Centers will start operations, while other projects will be developed in Danang and other provinces.

6. THACO - Chu Lai:

Embracing the Group's multi-industry development orientation, THACO-Chu Lai will enter its new phase: building a multi-industry ecosystem and a complex which includes an Automotive Mechanical Center, an Industrialized Agri-Forestry Center, a Logistics Center, and an Urban area Development Center in Quang Nam Province particularly, and central Vietnam generally. This phase is of great significance by increasing THACO's sustainable development in Chu Lai and making quite an impact on the local people and the local economy through its agro-forestry development.

With support from leaders of Quang Nam province, Chu Lai Open Economic Zone, and Nui Thanh District, we will speed up the existing projects: Agri-Forestry IP, the expansion of the wharf for ships up to 50,000 DWT, waterway dredging, urban areas and accommodation for workers in Tam Hiep. Chu Lai’s consolidated management system will cherish the proactive spirit in business, and apply a large-scaled multi-industry model.

7. THACO Group restructuring:

Aiming to leverage the high growths and large scale in agri to gain positive advantages in other industries (mechanics, investment-construction, logistics, commerce-service), by its 2020 Annual General Meeting, THACO has to speed up its restructuring plan as THACO Holdings Group which includes 5 member corporations, each of which is in charge 1 of its 5 business sectors: Automotive & Mechanics; Agri; Investment - Construction; Logistics, Commerce - service. The company will also build the brand structure for the most optimal industries.

8. Corporate Management:

         Operation management departments at THACO Group Holdings and its member corporations have the function to advise the leaders on their managing the business and production activities by providing management feedback and support, monitoring, and training practices. 

Leaders from each business and production division have to understand that the operations management departments act as their managing foundations. They are required to work closely with the departments to receive management feedback and implement risk management.

On the other hand, leaders from the operations management departments need to make good use of their intensive knowledge to best solve practical demands from business and production divisions. They are required to develop policy frameworks in order to build compliance in the system. At the same time, they have to make plans to recruit new employees, impart training and development to meet the demand of the market.

         Dear all THACO staff,

    We are now facing a challenging year in 2020, as the auto industry is seeing fiercer and harsher competitions than ever. We are on our way to step into the big-scale multi-industry development phase. That's why I am asking each one of you, especially the leaders, to stay focused, to fulfill your responsibilities, and to help others to overcome obstacles and challenges with dedication, integrity, and creativity.

Accomplishing the 2020 target means we have built new foundations for THACO's sustainable development in years to come, making contributions to the national development.

                                                                                                                                         Sincerely yours,
                                                                                                                                             Chairman
chu ky chu Duong.png
                                                                                                                                         Tran Ba Duong