Making products that epitomize excellence does make one competitive, but if the same products also mirror ethics and sustainability, then it makes you stand out among the crowd. And there is no one better than Phong Phu Corporation to justify the said notion.
In last 50 years, Phong Phu Corporation, one of the leading garment textile manufacturers and exporters in Vietnam, has succeeded to live its concept of making life better for operators by producing high-quality and ethically manufactured products at a good value to its customers. The firm has been trying to reduce its water footprint, and to measure the environmental and social labour impact the company has also joined the Higg Index program.
As a group company with interest in many other sectors, the annual revenue is around 3,300 billion VND. Exporting 70 per cent of its production in the textile segment, the company generates around US $ 80 million revenue from exports. “Our annual production is 2.5 million pieces in garmenting and 33 million metres of denim fabric with equal contribution from woven and knitted variety,” averred Phan Kim Hang, Vice General Director, Phong Phu Corporation, speaking to the Apparel Resources team recently.
Started 50 years ago in Ho Chi Minh City, Vietnam, Phong Phu Corporation manufactures denim and knitted fabrics. It also converts the fabric into high quality apparels-jeans wear, bottomwear, casualwear and so on. Being an integrated setup, the company has a production line from yarn to weaving to fabric and finally garment. About 70 per cent of the company’s product category constitutes menswear, whereas 30 per cent constitutes womenswear.
In fabrics, the major core market for the company is USA followed by South Korea with focus on mass and mid-range markets; while in garments the principal markets are both USA and Europe with focus on mid-range segment. Phan Kim Hang shares that they achieve pricing through a combination of high quality and good quantity. Some of its major clients spread across USA and Europe are Esprit, Tom Tailor, Mango, Asmara GAS, Express, Pink, Rock Reviral, and so on – good enough to be a cause of envy for all its competitors. Additionally, the company is also serving reputable domestic retailers such as Co-opmart, Metro and BigC.
‘Price’ has been a constraint for every exporter – big and small – not only in Vietnam, but the world over. However, Phong Phu Corporation seems to have understood and handled the concern through a clear strategy that begins with a vertically integrated set-up which enables them to better control the use of materials, thereby helping in reducing the cost. Secondly, there is no denying that nothing is more vital than meeting lead time… This is what every customer wants. In this regard, the Vice General Director is quick to add, “We try to provide the best response to the requirement of the customer, both in fabrics and garments, so that they do not get anything late. That’s where we have an edge over our competitors and we guarantee that we can do it with good success.” China is their biggest competitor both in garment and fabric, followed by Bangladesh.
What makes the company stand out among all their competitors is that the core management at Phong Phu Corporation is focused on product development (PD), which includes the Vice General Director and Pham Xuan Trinh, General Director of the firm – a step that yet again substantiates the company’s commitment to achieving excellence.
It is no secret that PD is today an essential pre-requisite for the progress of any enterprise and Phong Phu Corporation too has put all efforts to ensure that it has a very creative PD team that is central to weaving, spinning and garmenting. The design team works in close synergy with clients to develop exclusive exquisite collections. The team also provides the customers with facilities like customized design, sample execution, in-house printing, embroidery and embellishment techniques. “PD is indeed the most important thing that we are focusing on now and understanding fashion trend is the most important aspect of PD. We predict the trend by gaining information from designers all around the world. Then we figure out the most popular trends and make the fabric in advance. Whenever a garment company comes to us, we are there with the fabric a year ahead. We give what they want,” reasoned Phan Kim Hang.
One major challenge that the company faces is that since they have to source yarn from countries like USA, Africa and India, there is fluctuation in prices of yarn almost every day and managing this continues to be a big challenge. Going forward, Phong Phu Corporation has invested in a big denim facility. There are also plans of development in production lines. “There are big plans for developing production lines; old machines have been replaced by high quality modern machines, which is a significant step. Our new factory opened last month and it’s going to hugely increase the amount of capacity for woven and knitted denims for us. We need to now fill the newly opened factory with orders and aggressively get into US and other markets. I will say we are ready to move forward,” remarked Phan Kim Hang.
The company is also optimistic about the Free Trade Agreements (FTAs) with EU that will be effective starting from next year. The optimism is reflected when Phan Kim Hang says, “Apart from Korea, one major market we are going to penetrate is Europe because FTA promotes no tax. It will benefit us in a big way.” The country is today over-dependent on China, Korea and USA for raw materials, but India still has a long way to go to become a preferred raw material sourcing nation. “Quality, price and ethical production are the 3 important parameters that are necessary for becoming a reliable raw material sourcing nation. If India fulfils all these criteria, we shall consider,” reasoned Phan Kim Hang.
Their endeavour to achieve perfection in everything they are associated with has today made Phong Phu Corporation a name synonymous with quality, price and commitment to delivery. As the great Aristotle had once said: ‘Quality is not an act, it is a habit’. It’s indeed become a habit for Phong Phu Corporation!
