For many Vietnamese companies, especially small- and medium-sized enterprises (SMEs), restructuring is a way to improve their competitiveness at a time when the country is integrating rapidly, experts have said.

Ma Thanh Danh, deputy general director of KIDO Group, was quoted by Sai Gon Giai Phong (The Liberated Sai Gon) as saying that they have two options – restructure or lag behind – since many trade agreements that Viet Nam has signed with other countries would soon take effect.

Many companies based in HCM City, like Sai Gon Food Joint Stock Company, have become stronger by restructuring.

Le Thi Thanh Lam, the company’s deputy director, said in fact it restructured twice, in 2011 and 2015, and achieved fruitful results.

As a result, from being a company with 16 workers and two manufacturers, the company has since grown into one with over 1,000 workers and 16 manufacturers, she said.

Its revenue has jumped from a few hundred million dong per year to over VND1 trillion (US$43.8 million) after the restructuring, she said.

Rita Phil, a fashion company, is another successful example.

Thai Van Linh, head of strategy and operations at Vina Capital, an investor in Rita Phil, said it had faced many difficulties in the early days.

One year after establishment it decided to restructure its business, diversifying into other related products after initially only making wedding dresses, a decision that found support from its customers.

A representative of an association of business people in HCM City’s District 3 said many companies are able to achieve significant improvement after restructuring.

Experts said there are many restructuring models that companies can draw from, but which one they should adopt depends on their financial capacity, human resources, market value, and products.

Larger companies would do it differently from smaller ones, they said.

Linh said the most important aspect is what the company’s management wants to focus on: revenue, market or customers?

Lam said during its restructuring, her company faced many difficulties, one of which was the differences in opinions between various executives.

If the management fails to reconcile these differences, the restructuring would turn out to be a risky exercise, she said.

The experts said restructuring does face many obstacles like conflicting interests and adoption of wrong models, and many companies are wary of trying it as a result.