“Sao Mai Group needs more effort to go far,” said Le Thanh Thuan, Chairman and CEO of Sao Mai Group, as his company again earned a spot on the VNR500 - the list of 500 biggest companies in Vietnam in 2014 compiled by Vietnam Report Joint Stock Company and e-newspaper VietNamNet. With its long strides in recent years and impressive plans for the upcoming time, Sao Mai Group promises to be a “phenomenon" in the Vietnamese business community. Hoang Xuan reports.
How did you feel when Sao Mai Group appeared on the VNR500 - the list of 500 biggest companies in Vietnam in 2014?
Sao Mai Group is proud and honoured to be on the list because Vietnam Report’s evaluation criteria are objective, fair and rigorous. In addition to the VNR500, Sao Mai Group is present in the FAST500 - the list of 500 fastest growing businesses in Vietnam, the V1000 - the list of 1,000 biggest corporate income tax payers in Vietnam, and the Vietnam Top 50 - the list of 50 best performing companies.
When it was founded in 1997, Sao Mai Group had only 10 employees and less than VND1 billion of registered capital. After 17 years of development, we now have 10 member companies with more than 5,000 employees and over VND2,800 billion in owner’s equity. But, we do not feel complacent and will not stop with those achievements. That is the nature of mobility and competition of an enterprise in the time of integration.
During his visit to Sao Mai Group, Deputy Minister of Agriculture and Rural Development Vu Van Tam said that the economy is now still in difficulty and many companies have scaled down or suspended operations. So, what secrets have helped Sao Mai Group achieve such impressive results?
In 1997 when Sao Mai Group started operations, the regional economy slipped into crisis. In 2007 - 2008 when Sao Mai entered the accelerating phase, the world economy slid into crisis. Unity and adaptability are our secrets to live through crisis. Moreover, we must recognize and seek opportunities, accepting risk, to continue growth. I still remember a saying by a German scholar that "Economic crisis does not make any loss, perhaps we lose bad employers and have new more capable and better ones.” Crises gave many valuable lessons of corporate governance to Sao Mai Group. Powered by good leadership and a dynamic, enthusiastic staff, Sao Mai Group not only survives but also expands production, create jobs and increase investment in companies where the State sells stake.
Could you please tell us more about Sao Mai Group’s strategies when it acquires stake in companies where the State has divested?
Sao Mai has extensive experience in corporate governance after 17 years of operation. As this is decisive to the success or failure of the company, Sao Mai Group will be restructured to promote the role of effective units and individuals. Worse-performing managers must step back for better ones. Poor-performing divisions will be dealt with. In companies where the State has divested, Sao Mai Group will pay more attention to corporate governance.
Reportedly, Sao Mai Group is deploying hundreds of projects throughout the country with a total investment of many trillions, but it has only VND2,800 billion of owner’s equity. How can you pool capital?
I make it clear that though Sao Mai Group has engaged in many big projects, it does not disburse investment capital all at once, but it is made very scientific. All projects have proper funding plans. In the coming time, we will increase our equity from VND2,800 billion to VND5,000 billion. While many companies accept to borrow well above their capabilities, Sao Mai Group takes cautious, safe steps. With owner’s equity of VND5,000 billion, we will borrow at most VND5,000 billion from credit institutions. This source of strictly controlled funding will ensure the schedule and progress of projects.
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This is the eighth straight year Vietnam Report Joint Stock Company and e-newspaper VietNamNet announced the VNR500 ranking, and Sao Mai Group has consistently appeared in this list. The announcement of VNR500 2014 is scheduled to take place at the National Convention Centre in Hanoi on January 27, 2015.
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Apart from real estate, Sao Mai Group has also successfully expanded into other fields. Remarkably, the launch of premier fish oil, Ranee, is seen as a great breakthrough by scientists and dieticians. However, cooking oil companies fear that this healthy fish oil will bite into their market share. What do you think about this?
Fish oil is extracted from tra fish (pangasius). Tra fish is always strictly controlled by Sao Mai Group under international standards to ensure a healthy and safe product for consumers. Ranee fish oil is recommended for consumers by the National Institute of Nutrition, since it is refined by modern equipment to retain valuable natural nutrients in fish fat such as omega-3, omega-6, omega-9, EPA, DHA, vitamins and minerals essential for human body. Seeing the high demand for fish oil, Sao Mai Group is installing a second production facility using European technologies in Vam Cong Industrial Complex, Lap Vo district, Dong Thap province, to double its current daily processing capacity of 200 tonnes. However, due to input supplies in the Mekong Delta, the company can only reach 6-7 percent of the cooking oil market share now, a very modest rate. So, I think other oil companies do not need to worry about losing their market share.
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