PAN Joint Stock : The story of a non-traditional production method for traditional fish sauce by the 584 Nha Trang owner

The man who spent 34 years at 584 Nha Trang is extremely excited about telling his story about the profession of making fish sauce.

Chairman of the Board of Directors and the CEO of 584 Nha Trang Seaproduct Joint Stock Company, Mr. Huynh Ngoc Diep

Our appointment with Mr. Huynh Ngoc Diep, Chairman of the Board of Directors and the CEO of 584 Nha Trang Seaproduct Joint Stock Company (hereinafter referred to as 584 Nha Trang) had to be rescheduled for nearly 30 minutes because he had to attend a short meeting to reach an agreement on the organization of the inauguration ceremony of Dien Phu finished product packaging factory (in Nha Trang) on April 1.

From the beginning to the end of the story, the bony man who has been with 584 Nha Trang for 34 years was extremely excited when talking about his fish sauce manufacturing business. The mind blowing facts of his business during 2 years of the Covid-19 were shared for the first time.

Mr. Huynh Ngoc Diep, Chairman of the Board of Directors and the CEO of 584 Nha Trang, was extremely excited when sharing about the fish sauce manufacturing business.

The vitality of traditional fish sauce

For such a long time, people could not distinguish between the traditional fish sauce and the industrial one. How about now?

Not everyone knows about the story of the traditional fish sauce and the industrial one.

In fact, only those who are interested in cuisine pay close attention to the difference between the traditional fish sauce and the industrial one. In particular, most housewives are fully aware of these two types on the market but their selection depends on complicating factors.

I think that there are two types of consumers. An active consumer knows about fish sauce and chooses which one they prefer. This person cares about health-related information such as what kind of fish sauce it is, whether it is safe and healthful or not. The other one is a passive consumer, when this one has a meal at a restaurant, the decision is out of his hands.

The inauguration ceremony of Dien Phu Factory.

Enterprises with large distribution systems and economic potential have made good use of the above factors and almost dominated this distribution channel. As for the traditional fish sauce producers, it is difficult for them to compete because their distribution system and financial potential are still modest.

"Thanks to increasingly promoting its quality, brand image, and credibility to consumers, 584 Nha Trang has sustainable growth rate" shared by Mr. Huynh Ngoc Diep.

Knowledge about traditional fish sauce and industrial fish sauce is still controversial, particularly those related to standards. So it is still difficult for the majority to distinguish them.

Although industrial fish sauce brands have been booming nowadays, traditional fish sauce can still survive and successfully compete with them as there are more and more traditional fish sauce brands on supermarket shelves. What is your opinion?

Products from major manufacturers with high financial capacity and strong brands can easily enter supermarket chains and large distribution channels. Most of them are large-scale companies, manufacturing not only fish sauce but also other products like soy sauce, cooking oil or instant noodles.

In fact, it's easy for these "giants" to enter supermarkets. So it is not a big surprise that their industrial fish sauce products are effortless to enter these channels. As for small companies with no financial capacity, no large scale production, no methodical procedure, it is very difficult to do the same.

Fish sauce production line at 584 Nha Trang's factory.

Based on what you said, one requirement for traditional fish sauce to enter such large distribution channels is large-scale production?

It's true. If traditional fish sauce producers want to enter a large distribution chain, they must meet the requirements of the market such as the quantity of products sold and the scale of the company.

But the 584 Nha Trang brand does appear in the supermarkets. What is your secret?

Established in 1977, 584 Nha Trang has been in the industry for a long time and so far we have built an overwhelming number of consumers and a pretty good distribution system. Our products have been present in supermarkets since 2008-2009. It was a long process to get there.

We have to find some distributors to associate with us based on our strengths like output and prestige. We are currently cooperating with some strategic partners who highly appreciate our potential and advantages of the raw material areas, factories, technical team and the 584 Nha Trang brand.

On their side, they have good distribution systems, which makes it easier for our customers to access the products. We used to mainly sell our products in the North and Central region, but now our strategic partner is very strong in the South.

We persist in going from traditional distribution channels to supermarkets and expect that with the development of modern distribution systems, more and more consumers will know about 584 Nha Trang's products.

Our partners highly appreciate our potential and advantages of the raw material areas, factories, technical team and the 584 Nha Trang brand.

Traditional does not mean old-fashioned.

It is usually said that traditional means old. Is that true for 584 Nha Trang fish sauce?

To us, "traditional" means that we retain the essence of the product.

Fish sauce is produced with two main ingredients - fish and salt - through the process of mixing them, brewing and stirring. However, some stages in the process need to be changed to benefit consumers without affecting the quality of the products. For example, in the past, the stage of mixing fish and salt had to be made manually but now we can use machines.

"Tradition does not mean old, but keeping the essence!" said by Mr. Huynh Ngoc Diep.

In the past, we manually extracted fish sauce from the barrel and bottled it. Now, we have automatic pumping machines and bottling lines. To apply such "non-traditional" stages, it is also necessary to have a certain market size and output. Without those two factors, it is impossible to apply them. For example, investing in a production line for a few thousand bottles will be very costly.

As a result, "traditional" does not mean doing everything manually. The factory nowadays must be clean and nice, even the fish sauce factory. The tradition can be referred to as the traditional raw materials and production process. The fish sauce must be made from fish and salt, with the right brewing process and stirring method. Tradition is not old, but keeping the essence.

As you mentioned before, the tradition is for the taste and ingredients, and the modernity is for standards and the application of science and technology to production. How do you apply science and technology to the production of traditional fish sauce?

584 Nha Trang has a long history of formation and development with a solid technical background. Our company is located in Nha Trang City where Nha Trang University of Fisheries is located.

Mr. Huynh Ngoc Diep told us that "traditional" did not mean doing everything manually. The factory nowadays must have been clean and nice, even the fish sauce factory.

Most of the staff at 584 Nha Trang are well-trained, knowledgeable about the industry, and adhere to standard processes. Technology is constantly being updated, supplemented and further developed for the production process. 584 Nha Trang factory has a technical room, a QA room, and a research room to perfect the products. We conduct thorough research about product quality, packaging design…

One of our advantages is that we have a professional team, well-trained and experienced staff who are ready to develop products to satisfy market demands in terms of quality and packaging.

Can you please introduce the newly opened factory of 584 Nha Trang in Dien Phu industrial Zone, Nha Trang City?

We inaugurated the Dien Phu factory on April 1st. It is what we have planned and longed for.

Participating in The PAN Group's ecosystem in 2016 as an associate company, 584 Nha Trang then officially became its subsidiary in 2018. We luckily have many opportunities to learn from the Group's member companies. We also receive a lot of support from the Group for value development and sustainability. Since joining The PAN Group, we have increased investment in our raw material area and have two more factories producing raw fish sauce in Ca Na and Phan Ri Cua, with the production capacity of the factories reaching over 15,000 tonnes of raw fish materials per year. The most recent investment is the new factory in Dien Phu, specialising in packing.

Thanks to meeting the standards of production scale and facilities, our company is able to collaborate with large partners. For example, when our factory was in construction, one company came to offer a partnership. Moreover, this factory can solve our problem of export interruption to the Canadian market. Recently, a partner from the US, after visiting the factory of 584 Nha Trang, expressed his desire to bring the products of 584 Nha Trang to this market.

Fish sauce products of 584 Nha Trang with a new brand identity.

The story in the last two years during the COVID-19 pandemic about taking a big step forward.

How long does it take to prepare for the launch of the new factory?

The Dien Phu factory project has been deployed for nearly 2 years. It took just one year for construction but such a long time for choosing the location of the factory.

It resulted from the initial hesitation of the industrial zone authorities and the localities due to the stereotype of the uncomfortable odor of fish sauce production. However, in reality, we produce the fish sauce in raw material areas such as Ca Na, Phan Ri Cua, the industrial zone is a place for packaging the finished products.

On the one hand, once the fish sauce is mature enough, the finished product does not affect anyone. On the other hand, we also strictly comply with environmental protection regulations. We had to prove them by organizing an on-site appraisal visit for local agencies to some packaging factories in other provinces. As a result, the construction time is delayed. Finally, we received the nod of trust from the authorities and local agencies to start production.

In the last two years during the COVID-19 pandemic, many businesses faced difficulties. On the contrary, you had a new large-scale factory opened, is it considered an upstream?

In fact, the COVID-19 pandemic was an opportunity for 584 Nha Trang to consolidate its facilities. Building a new factory required not only time but also financial potential. When The PAN Group knew our needs, they immediately invested and supported us. I think it's very convenient for a member company to share the same development orientation with the parent corporation.

"During the Covid-19 pandemic, the demand for fish sauce increased. This industry was not like tourism, tourism was stagnant but fish sauce was stored, which was an opportunity for us", shared by Mr. Huynh Ngoc Diep.

During the pandemic, the demand for fish sauce increased. This industry was not like tourism, tourism was shut down but fish sauce was the kind of product that people wanted to store to use later. That was an opportunity for us. But not everyone could seize the opportunity. A large-scale producer with large output could satisfy the increasing demand of the market. If you didn't have that potential, even though the need was considerable, you wouldn't be able to take advantage of it.

It could be said that 584 Nha Trang was very lucky. During the pandemic, we not only maintained jobs for staff, but also organized more work shifts under the "3 on-site" regulations to boost production and meet the increasing demand of the market.

Since 2001, the company has continuously received Vietnamese High-Quality Goods awards. On March 29, we continued to be honored at this award ceremony in HCM City. Besides, we have received the Vietnam Gold Star Award five times in a row.

In 2020, fish sauce of 584 Nha Trang along with other products in The PAN Group such as Vinaseed's seed varieties and agricultural products, Fimex VN's shrimp, Bibica's confectionery, cashew nuts and Lafooco's nuts were recognised as national brands. This recognition is for the serious and persistent efforts of 584 Nha Trang on the journey of constantly developing, improving product quality, and better serving consumers.

Fish sauce products of 584 Nha Trang with a new brand identity.

In addition to building a new factory, 584 Nha Trang has also changed its brand identity in more positive directions. Is this a combination for an upcoming "boom"?

Over the past 40 years, generations of employees and company leaders have witnessed the 584 Nha Trang brand grow from small to large. We follow the market demand. In the beginning, the company made and designed all labels without any strategic plan. This person did this, that person did that,.. now everything needs to change.

Since we became part of The PAN Group, we were consulted to redesign labels, packaging and the company's images towards professionalism and modernity. Of course, it was not an easy process as we grew up from a small company. When we started the redesigning, we were also worried that the brand identity change might have made consumers feel unfamiliar with us.

However, facing the urgent need for development, we were very determined to change. After piloting the new brand identity in a few products, we received positive feedback from customers, thereby we are boldly proceeding them on a larger scale.

Not only has the brand identity and packaging changed, but also other product details had to be improved. One significant example is the change in the button cover which is now more uniformed and advanced. New finished fish sauce bottles not only have beautiful packaging and designs, but also become very user-friendly. These are surprising successes and we will continue to develop further.

There are a lot of changes, do they affect your cost and the selling price?

The selling prices for consumers remain unchanged. On the contrary, when a new product is introduced, a variety of promotions are offered to consumers. In fact, the selling price is not a burning issue when the quantity of products sold is huge.

The improvement of design and packaging even saves costs thanks to large-quantity and synchronous production. For example, in the past, there were some models of button covers that we had to buy from Japan, but now they can be purchased in Vietnam thanks to domestic manufacturers, which ensures high quality with cheaper price.

What about your profit margin after such improvements?

Our core value is the fish sauce, which stayed the same. In terms of production, it is more cost-effective, packaging costs increase just slightly, so the overall cost remains stable. The company still maintains the same selling price, even offers promotions or discounts for consumers to raise brand awareness and support our products, which is the initial success to leverage new developments in the future of 584 Nha Trang.

Thank you so much for sharing!