To catch up with the robust integration and renovation tendency, the Vietnam Engine and Agricultural Machinery Corporation (VEAM) has quickly reformed its operating model and accelerated joint cooperation with foreign companies to create new breakthroughs in business. One of VEAM’s strategic partners is now Japanese companies.
Reporters of the Vietnam Business Forum Magazine has given an exclusive interview with Mr Lam Chi Quang, President of the Board of Directors of VEAM, to learn more VEAM’s projects with Japanese companies and his remarks on them.
Over the past more than 20 years of construction and development, VEAM has gradually asserted its position in the manufacturing sector. As a paramount leader, could you briefly introduce VEAM’s outstanding achievements?
VEAM is a top-notch manufacturer and exporter of engines and agricultural machinery in Vietnam. The corporation’s export revenues average at over US$10 million a year. Being fully aware that this field is highly competitive in price and quality, VEAM’s member units frequently renovate equipment, technologies, governance and production to compete with other exporters. Hence, VEAM’s brands like VYKINO and VINAPPRO have won the trust of domestic and international customers. The Japanese market is known for its fastidiousness. Japanese companies not only directly examine products but also require producers to report on production processes. However, VEAM’s pesticide sprayers have deeply penetrated into the Japanese market. We can affirm that after 20 years of construction and development, VEAM has become a leading manufacturing brand in Vietnam. Japan’s corporations like Toyota Motor Corporation and Honda Motor Company - two world-acclaimed manufacturing brands - have selected VEAM as an important partner for their automobile and motorcycle production projects in Vietnam.
VEAM holds a 20 % stake in Toyota Motor Vietnam and a 30 % in Honda Vietnam. What motivated VEAM to invest much in these projects?
Contributing capital in joint ventures with Japanese companies, VEAM not only gets returns from these joint ventures but also acquires more knowledge about modern corporate governance from the two Japanese partners. At the same time, the business philosophy and business environment of VEAM are also very similar to Toyota and Honda. Hence, the decision to join hands with Toyota and Honda is a right choice and suits the long-term strategy of VEAM. Although these two joint ventures encountered numerous difficulties when they were established in 1995 - 1996 because of incomplete infrastructure systems in Vietnam and changeable automobile and motorcycle industry development policies, they managed to overcome all challenges to become the most successful automobile and motorbike producers in Vietnam thanks to their own efforts, supports of the Vietnamese Government and the trust of customers.
How do you think about Japanese partners?
Prominent competency of Japanese companies in general and Toyota and Honda in particular are not only appreciated by Vietnamese companies but are also recognised all over the world. They not only design, manufacture and market products of excellent quality but also provide perfect after-sales services and bring maximum satisfaction to customers. Moreover, business philosophies of Japanese companies are built on strict management principles and they consider human resources the most precious asset and the most important source of motivation to create the added value and sustainable development.
Therefore, when Japanese companies plan business strategies, they always regard training human resources and using them as the centre stage. Arguably, that philosophy is a prototype which Vietnamese enterprises still lack. Japanese companies always act to win the recognition of the society as exemplary citizens through such activities as technology transfer, on-spot human resource training, job creation, environmental protection, and contributions to cultural and social activities, etc. Toyota Vietnam and Honda Vietnam are always appreciated by the government and people of Vietnam.
From the success with automobile production joint venture with Toyota of Japan, will VEAM continue cooperating with Japanese partners to produce traditional machines?
The agricultural machinery manufacturing sector in Vietnam is still encountering a lot of difficulties like weak purchasing power and price competition with Chinese rivals. Hence, in this area, VEAM only cooperates with Japanese companies to import and export certain agricultural machines to the Japanese market, such as pesticide sprayers and agricultural machine parts. VEAM expects to strengthen cooperation with Japan to manufacture products of high quality and reasonable prices to serve increasingly developed agriculture of Vietnam and mechanisation of agriculture in Southeast Asia and Africa.
Thank you very much!
Nguyet Tham
Vietnamese
