During the past 15 years of construction and development in the light of the business philosophy “Integrity - community - development”, Hoa Sen Group has emerged strongly to become a leading brand name in the steel industry in Vietnam. The following interview excerpts reveal Hoa Sen Group’s strategy for competitiveness improvement and capturing opportunity, as well as President Le Phuoc Vu’s remarks on the Vietnamese investment environment and governance capacity, and level of Vietnamese companies at present. Thanh Tam reports.
Hoa Sen Group embarked on building corrugated steel plants when the market economy of Vietnam was fledging and the steel industry was tough. How do you look back on this decision?
In 2001, the IX National Congress of the Communist Party of Vietnam adopted orientations and tasks of the five-year socioeconomic development plan from 2001 to 2005. Many important objectives, including the strengthening of socioeconomic infrastructure, were defined to lay an important step for building the socialist-oriented market economy.
This provided a new airflow, faster and stronger, to the business environment. The considerable rise in investment capital for economic infrastructure development opened business opportunities for people like us. Therefore, at that point, I decided to establish Hoa Sen Joint Stock Company with an initial registered capital of VND30 billion and only 22 employees to produce galvanised steel sheet. After 15 years, from that small company, Hoa Sen Group grew to affirm its role as a leading private economic group in Vietnam. The group is now a top exporter of steel sheet in Southeast Asia. And, all of these decisions were topical; thus, I immediately grasped it when this opportunity appeared.
As Hoa Sen Group has carried out many projects across the country, how do you assess Vietnam’s investment environment?
Since its establishment on August 8, 2001, Hoa Sen Group defined a strategic vision to become a leading industrial conglomerate in Vietnam and the ASEAN region with sustainable construction material development strategy. Currently, the group is determined to realise its medium and long-term objectives: Producing 2 million tonnes, US$1.5 billion and 300 branches in 2018; and targeting to become a leading supplier and distributor in Southeast Asia.
Therefore, the Board of Directors of Hoa Sen Group has defined a production expansion strategy, including building production plants across the country, to enhance production capacity and optimise steel and plastic supply capacity nationwide.
In addition to its own capacity, the success of Hoa Sen Group also comes from open governmental policies on investment attraction. In localities like Binh Duong, Ba Ria - Vung Tau, Nghe An, Binh Dinh and Ha Nam provinces where Hoa Sen Group has production plants, local governments are applying effective policies to improve the investment environment, attract investment, and reform administrative procedures to support and facilitate investors.
However, the Vietnamese business community is competing at a disadvantage compared to FDI companies. Therefore, the Vietnamese business community has never needed the backing of the Government as we do now. We need open, liberal mechanisms and policies.
Therefore, I hope that the Government moves to further institutional reform, build a fair and transparent business environment, determine development focuses to guide investors, and have suitable support measures and business models for the current context.
As an entrepreneur, what do you think of the corporate governance capacity and level of Vietnamese companies? Would you share the experience of Hoa Sen Group?
Currently, Vietnam is still more underdeveloped than other countries in the region. Vietnamese entrepreneurs always integrate into the world at a disadvantage and corporate governance still contains a lot of shortcomings. Most of the businesses have small scales, use outdated technologies, and have relatively low administration level. And, among those weaknesses, personnel management is the most complicated factor and the weakest point of Vietnamese businesses today.
Because of understanding these difficulties and seeking rapid and sustainable development, in the past 15 years, the human factor and corporate governance have always been considered Hoa Sen Group’s top priorities and determinants of success. The group has built the corporate culture based on the principles “Integrity - loyalty - devotion - intelligence - amity”. At Hoa Sen Group, the human factor is at all times the nucleus of development. We believe: “For a business wanting to have good competitiveness, personnel and governance are of primary importance. We administer based on a system, standard and compliance. Leadership views and willpowers are very important. That is the responsibility to the society and the contribution to the society. If any business understands and acts well, I am then confident that it will grow.” With this idea, we have built a young well-trained, dedicated workforce. At the same time, we also build a human-centred corporate culture and use it as a motivation for development.
The Prime Minister’s Meeting with Business will discuss “National Business Development Programme” in the next five years, with the focus on business start-ups. What do you think about this issue and do you have any recommendations?
I think that, in the current context, this is a very significant programme to our business community in particular and our society in general. This is a tremendous effort.
And, this practice is learned from developing economies in the world such as the United States, South Korea and Singapore. They all started by building up business start-up ecosystems and knew to grasp creative opportunities to develop their countries.
Looking back on the past way, we have spent so much time approaching the market economy and creating mechanisms for accelerated economic development. Therefore, this decision of the Government is a suitable goal for realising the target of becoming a "basically modern industrial country.” Although natural resources are being depleted, we still have potential and rich resources: Grey matter and wisdom of Vietnamese people. Therefore, the decision is an extremely right and sound decision in the present time.
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