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Is Hoa Phat the largest furniture company in Vietnam?

Is Hoa Phat the largest furniture company in Vietnam?

Wednesday 14, 07 2021
Hoa Phat Furniture Joint Stock Company has been one of the largest furniture company in Vietnam. However, this may change in the near future when Hoa Phat Group - the parent company of Hoa Phat Furniture - divests from the furniture segment.

Hoa Phat Furniture – Impressive figures

Hoa Phat Furniture Joint Stock Company was established in 1995, belongs to Hoa Phat Group. Currently, Hoa Phat Furniture Joint Stock Company employs more than 2,000 employees, and has 4 branches as well as a vast distribution system across the country. In addition, the company's products are also exported to markets in Asia, the Middle East and Eastern Europe.

The main products of Hoa Phat Furniture are office furniture, safes, family dining tables and chairs made from steel - stainless steel pipes, educational furniture and public works. In general, these products are of high quality which was partly made from iron and steel materials - the strengths of the Group.

In the 2019 annual report, Hoa Phat said that it continuously dominated the office furniture market share with a lot of large projects. While its home furniture segment grew by 46% in 2018.

Hoa Phat

Hoa Phat furniture revenue has been stable around 1,800 billion VND for many years. With a net profit of 250-300 billion VND per year, Hoa Phat Furniture is among the most profitable companies in this industry in Vietnam.

In 2019, Hoa Phat Furniture’s profit was second only to AA Corporation, which specializes in high-end furniture. In fact, AA Corporation's has also witnessed very strong growth in recent years. In 2019, the company earned nearly 2,800 billion VND in revenue and 329 billion VND in profit after tax, up 38% and 19% respectively.

However, when compared to other businesses such as Xuan Hoa Furniture and 190 Furniture, which provide the same products, Hoa Phat Furniture is way far ahead. In 2019, 190 Furniture earned a revenue of 866 billion VND, profit after tax of 60 billion VND while the figures for Xuan Hoa were 557 billion VND and 79 billion VND, respectively.

This is partly due to the better gross margin of Hoa Phat Furniture, about 24% compared to 20% of Xuan Hoa and 11% of 190 Furniture.

Hoa Phat Group divested from the furniture segment

Despite the stability and high profit margin, compared to the revenue of nearly 65,000 billion VND of the parent company, Hoa Phat’s furniture segment accounts for less than 3%.

Therefore, Hoa Phat has planned to divest from the furniture segment in 2021. The reason given by Hoa Phat is that this segment is really labor-intensive, which is not suitable for large-scale production model, using advanced modern machinery lines of Hoa Phat Group.

Hoa Phat Group

Specifically, the number of manual workers in Hoa Phat Furniture Joint Stock Company accounts for a large proportion (1,528 out of 2,039 employees).

The latest information about this divestment is in the first quarter of 2021, Hoa Phat Group divested 500 billion VND from of the furniture segment.

Which furniture companies will dominate Vietnam’s market?

There is still a lot of room for development in Vietnam's furniture industry. Therefore, Hoa Phat Group's divestment from this segment will be an opportunity for other furniture businesses as well as new “players” to participate in and gain market shares, especially in the office furniture segment.

So which businesses will benefit from this? The answer is their competitors such as AA Corporation, 190 Furniture, Xuan Hoa, and Hoan My Furniture Company. Below is detailed information about these businesses, compiled by VietnamCredit.

  • AA Corporation

Established in 1990, AA Architecture Construction Joint Stock Company (AA Corporation) is the leading company in Vietnam in the production of high-end interior furniture.

After 30 years of operation, from a start-up company in Ho Chi Minh City, AA Corporation has grown into a global corporation with 13 subsidiaries operating in 7 countries (Myanmar, Cambodia, Bhutan, Japan, USA, Singapore and Thailand). The company also exports furniture products to 40 countries around the world.

AA's factory covers an area of 80,000m2 and is equipped with the most modern facilities.

  • 190 Furniture

190 Furniture Joint Stock Company was established in 2006. Its main business activity is manufacturing office and home furniture, manufacturing and cutting steel, processing steel pipes and trading metals.

The company has 2 large factories: Furniture factory and steel pipe factory located on an area of ​​over 40,000 m2 in My Tranh village, Nam Son commune, An Duong district, Hai Phong city with a total investment capital of over 388 billion VND.

furniture companies

  • Xuan Hoa Furniture

Xuan Hoa Furniture Joint Stock Company - formerly known as Xuan Hoa Bicycle Factory, was established in 1980. Currently, Xuan Hoa's product distribution network is spread across the country with more than 90 Level I Agents and thousands of Level II Agents. Besides, Xuan Hoa is also a partner of leading furniture corporations in the world such as IKEA of Sweden, Habitat of France, Sankin of Japan, etc.

After more than 40 years of development, the company is now one of the leading enterprises in the field of consulting, designing, and manufacturing interior equipment.

Xuan Hoa's furniture products have become familiar with a lot of Vietnamese people.

  • Hoan My Furniture

Hoan My Furniture Group Joint Stock Company Established in 1998. In 2014, Hoan My Furniture inaugurated a factory with a scale of to 15,000m2. The entire production line is completely imported from Italy and Japan.

Currently, Hoan My Furniture is the owner of 2 brands: Hoan My Décor Furniture which specialises in consulting, designing, manufacturing and constructing furniture on demands, and Hoan My Gallery , which exhibits the world's leading furniture brands.

VietnamCredit

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