Hoang Anh Gia Lai Group (HAGL) has announced big investments in the agricultural sector in recent years. This move of HAGL is consistent with Vietnam’s overall development objectives in particular and of our times in general. Its investment projects have proven that the HAGL brand has developed into a world class entity, capable of cooperating in high-tech agriculture and other high value-added sectors with big partners on the international arena. To get an overview of HAGL’s achievements, Vietnam Business Forum interviewed Mr Vo Truong Son, CEO of HAGL. Van Luong reports.
Despite domestic and global economic difficulties in recent years, HAGL still has steady investment and business growth. How did the group achieve that impressive result?
HAGL has performed corporate restructuring by reducing its interests from real estate and focusing on agriculture with a suitable diversity, including sugarcane, maize, palm oil, rubber and dairy farming. This business restructuring and diversity help HAGL limit adverse effects when the market is volatile in the short term. Also, the correlation of crop cultivation and livestock husbandry helps reduce costs. Cultivation by-products like molasses, bagasse, corn stover and oil palm bagasse are good feed sources for dairy farming. For its part, cow farming provides a large amount of organic fertilisers for crops, thus helping HAGL reduce expenses for inorganic fertilisers. Sugar, maize and dairy farming have generated revenue and profit for the group. Oil palm industry is also going to be harvested. HAGL is waiting for rubber prices to go up to collect latex. These assets will boost HAGL’s continuous growth thanks to operational area expansion and increased productivity.
Could you talk about the new objectives HAGL has set from those remarkable successes?
HAGL's strategy is investing in the large-scaled high-tech agriculture. Large-scale production and advanced technology, plus favourable climatic conditions, are important factors for the group to secure successful competition when Vietnam engages more deeply into the global economy. Regarding real estate, HAGL only focuses its investment in property complexes in Yangon, Myanmar because they have good location and very favourable market conditions.
HAGL’s recent strong investment for agriculture proves that agriculture is a fertile ground for investment. What do you think about this view?
I think that agriculture is not an easy success for all. To succeed in agriculture, investors must study market supply and demand relations and determine their competitive advantages before making investment decisions. In Vietnam, agricultural production is now based on traditional methods. It is characteristically crowd-driven, lacking planning, lacking supply and demand information, and suffers from disparate distribution systems. For HAGL, we are never affected by crowd movements but we work out long-term investment plans and strategies based on our competitive advantages. HAGL’s advantage is its land bank, which enables the group to apply mechanisation and high tech to enhance productivity and lower input costs. Among agricultural sectors HAGL is engaged in, dairy farming and palm oil cultivation have stable demand and growth potential. For sugar and rubber industries, HAGL relies on low cost factors to compete when supply and demand relations are unstable and prices are volatile.
Do you and HAGL have any message to US investors and partners? What are potential fields for effective cooperation between the two sides?
HAGL is completing its investment projects and will invest in new projects in the coming time. With its burning desires to climb onto the summit on the right direction built on a solid foundation of business experience, strong financial resources and enthusiastic and dynamic staff, HAGL will make a greater effort to overcome all challenges for sustainable and effective development and contribute more to the cause of national development. Hence, HAGL very much expects US investors with strong financial capacity, advanced science and technology, and successful technological applications to high-tech agricultural production. At present, HAGL has a huge land and property fund for large-scale agricultural production with a lot of advantages. If HAGL’s resources are combined with those of other partners, HAGL will have more conditions to utilise its resources to a maximum while other partners will also get benefits in return. Hence, HAGL is open to welcome all investors from the US.
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