Last updated: Friday, March 22, 2019


Hapro: Other Perspectives on CSR Before and After Equitisation

Posted: Tuesday, March 27, 2018

Though busy with the company's initial public offering (IPO) plans at the end of March 2018, Mr Vu Thanh Son, General Director of Hanoi Trade Corporation (Hapro), spared time for a close conversation with Vietnam Business Forum on Hapro’s corporate social responsibility (CSR), the next step after equitisation. Le Hien reports.

CSR is not only defined as charity work!

CSR is specially treasured by world-class companies and it is a reference measure for global business deals. This is still novel in Vietnam. How have you exercised CSR at Hapro?
CSR is understood as commitments of a company to doing business ethically, contributing to sustainable economic development, improving quality of life for employees, local community and society.

In fact, CSR is not only understood as a charitable work done by a company. It is an integral part of a sustainable business development strategy. Without a full recognition, knowledge and deployment of CSR, the company cannot develop sustainably in localities where it has business presence, let alone in the world as a global business firm.

With rich international trade experience, Hapro pays special attention to this issue. For example, many cashew nut export shipment receivers checked our labour conditions to find out whether we are employing overaged and underaged people. Foreign companies care very much about this.

Since its inception, Hapro has always upheld business ethics by offering good products and services to customers and consumers. On export, we ship our products to over 70 countries and territories in the world. Many of our exports are also Vietnam’s key exports such as rice, coffee, pepper, cashew nuts and handicrafts. Export turnover accounts for about 70 per cent of Hapro’s total revenue.

In the domestic market, Hapro is running a HaproMart-branded wholesaling and retailing system and making some products for export and domestic consumption. We also have a service system comprised of Thuy Ta and Bon Mua restaurants. Hapro hosted market days in rural areas in Hanoi before the Lunar New Year. Sensing the spirit and warm atmosphere there, we become more aware of protecting and developing the Hapro brand sustainably.

Do you think that culturally imbued brands will last forever?
In my opinion, a sustainable brand value requires a lot of factors. First of all is the scale, performance and coverage of that brand. Of course, good service factor is key. Such names as Thuy Ta, Bon Mua and Hanoi Food have become familiar to Hanoi and become the pride of Hapro employees. Brand value lies in the familiarity felt in mentioning it and the trust and keenness felt in using it. When a company blows cultural values into its products, its brand will last forever. Chu Dau pottery or Thang Long wine are clear evidence.

Hapro takes pride in winning the National Brand Award for its export-import and domestic trade, its two key businesses, in many years. In the international market, Hapro’s pepper, cashew nuts, handicrafts and rice are always trusted by partners. In the domestic market, having advantageous locations of supermarket chains and convenience stores called HaproMart in both small and big streets in Hanoi and understanding consumer tastes, HaproMart is capable of competing with strong rivals on the retail market.

CSR during and after equitisation

How is business ethic, which is an aspect of CSR, applied in Hapro equitisation process?
In our point of view, transparency and publicity of information are key elements, which served as guiding principles for all works related to equitisation administration at Hapro. Information about business valuation, equitisation plan, business locations after equitisation, and criteria and procedures of selecting strategic investors are made very clear. Investors will not be able to buy Hapro shares when they lack clear knowledge of corporate information, equitisation process and procedures. I think that, with its existing advantages, clear strategies and potential in addition to the current strong rally of the stock market, the initial public offering (IPO) of Hapro, scheduled to take place on March 30, will be a success. According to the plan, Hapro will sell approximately 76 million shares or 34.51 per cent of stake, via the IPO with the initial price of VND12,800 apiece.

What do you recommend to those seeking to buy Hapro shares?
In 2018, the market will witness a series of large IPOs and divestments. Investors will have various choices. We also take this into account. It is easy to see that other companies on the IPO list cover a wide range of business activities but only Hapro is involved in both domestic and international trade. For that reason, we have a unique advantage.

Commercial business is unique. Although its profitability is not high relative to many other industries, it is an essential activity that produces profits every day. Cash flows are stable and earnings are stable.

Therefore, when the economy slowed down, profitability of some sectors decreased and cash flows squeezed but commercial activity was still steady. Our IPO will attract investors interested in stable long-term investment rather than quick and high profit prospects.

What are Hapro’s expectations after equitisation?
After equitisation, we believe that, given its existing resources and driven by new active corporate governance methods applied to a joint stock company, Hapro will fly high.

Importantly, Hapro considers restructuring subsidiaries and affiliates. It will increase investment for good-performing companies to play leading roles. Bad-performing and loss-making companies will be restructured and even entirely divested. Hapro is determined to get rid of weak stages that drag on the overall performance of the corporation. Brining a better income to employees and contributing more to economic development of Hanoi in particular and of Vietnam in general is Hapro’s corporate social responsibility.

Thank you very much!

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