EnterprisesLast updated: Thursday, February 21, 2019
Sao Mai Group: Constant Cultivation in Business EthicsPosted: Wednesday, February 07, 2018![]()
With its proper behaviours to the market and to partners and its tolerance to new employees, Sao Mai Group has successfully restructured a series of enterprises and created stronger and more sustainable development steps than ever. That is the way, according to Mr Le Thanh Thuan, President and CEO of Sao Mai Group, to “cultivate business ethics”. Thanh Xuan reports. As a newcomer of the real estate industry, IDI Company, a member of Sao Mai Group, has risen to become a leader in catfish processing and export in Vietnam in the face of sectoral difficulty. Could you please tell us what core values are behind this success? As known, IDI continued to achieve new successes in 2017, with profits amounting to more than VND400 billion. Actually, IDI has risen strongly to not only do effective business, but also to achieve sustainable development. Inputs are important and IDI has now controlled them. In addition to the 150-ha self-farming area, we have built a farm network with households in An Giang, Dong Thap, Can Tho and Kien Giang to ensure enough inputs for our two factories to operate around the clock. We all know that catfish fillet export price depends on global markets. The price is so sensitive that all changes in politics, economics, bank interest rates, US dollar exchange rates or tax policies of major economies or even news coverage also directly affect it. For years, export prices have gone up sharply, partly because of global supply-demand rules and partly because of unhealthy competition (in price quotation and unstable quality) from domestic companies. This ongoing story is still hurting honest companies. This has resulted in recurring and unpredictable undersupply or oversupply crises. When inputs fall short, the price is very, very high, or vice versa. In that vicious circle, IDI soon realised that if it could not control input supply sources, it would be at a disadvantage before unreasonable coordination of importers. If IDI does not have new customers and make light of risks in foreign markets, it will find it very hard to turn around in case of the unexpected happening. Fortunately, we know how to handle and estimate correctly, strictly control product quality, and provision export risks. For the time being, IDI has a strong contingent of skilled workers and completely controls input sources; thus, all fluctuations do not affect it. The company even finds good opportunities in risky situations. But, the essence we must grasp is absolute constancy. Life tells us that “Goodwill towards whatever will bring us a good outcome.” How about the performance of other members of the group? One year earlier, the takeovers of State-divested tourism companies in An Giang and Dong Thap clearly showed this. They were long-established State-owned enterprises (SOEs) before becoming our member companies. We created new added values to them from their personnel and infrastructure reshuffles, new business strategies and urban service styles to integrate into the market in the new context. What is the biggest obstacle to taking over and restructuring acquired businesses? It is said that Sao Mai Group’s restructuring process at four acquired companies is still slow. What do you think about this? Corporate restructuring is always challenging, and is much more difficult in the case of formerly State-owned enterprises. What are the difficulties with this kind of business that Sao Mai Group meets in reality? In essence, expenses had already formed for years but old companies did not allocate them because they wanted to make falsified profits to boast their performances to their superiors. This way of doing portrays a very nice-looking, convincing picture but the reality is much more painful. All must be handled by Sao Mai Group. First of all, Sao Mai Group will work out reasonable personnel rearrangements; go over every case, and take into account every capacity and assignment. In particular, we must train them again to integrate and adapt to new operating mechanisms of the company. At present, Sao Mai - An Giang Tourism Joint Stock Company and Sao Mai - Dong Thap Tourism Joint Stock Company have made remarkable progress, featured by a 15 per cent growth from a negative figure earlier, totally upgraded facilities and expanded business scopes. Specifically, Sao Mai Hotel (former Song Tra Hotel) got VND200 billion of funding to upgrade to an upmarket class. Do you think there will be a lot of conflicts in running a business with such problems? Other news
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