Lideco- Leading Light in Real Estate Industry

In early 2012, we dropped in on Lideco when a gloomy atmosphere pervaded all companies regardless of economic sectors. But, we sensed a cosy feeling and expeditious work environment here. Indeed, in the midst of economic crisis and galloping inflation that left thousands of businesses facing losses, a few still operated effectively. Mr Nguyen Van Kha, President of Lideco Board of Directors, said: Confronting numerous difficulties at present, it is great to see sustaining investors. Indeed, when the economy regained growth momentum, real estate will immediately become a potential business. This is more meaningful for Lideco, because it has been in this business for nearly 40 years and has become a second home for generations of employees. And, during this time, the company has constructed thousands of apartment buildings for customers.

 

Lideco is the pride of all employees because of its attachment to the national capital development. Tu Liem Construction Enterprise was set up in 1974 to meet the huge housing demand in Hanoi. From a small workforce and simple equipment, Lideco developed into a backbone construction firm in Tu Liem district. A series of houses were built by the hands and brains of its engineers and workers. After Vietnam initiated the doi moi (renovation) process in 1986, Lideco’s employees were more orientated towards market factors in addition to their professional interests. The enterprise was renamed Tu Liem Housing Construction and Trading Company in 1992 and was converted into a joint stock company in 2004.

 

Lideco was little known in the first three decades of operation. In the latest 10 years, the rapid urbanisation process resulted in the formation of hundreds of real estate and construction companies. Lideco started thinking of how to take advantage of its experience, open up opportunities and assert its brand name. Mr Nguyen Van Kha said: Previously, we only cared about how to do our work well and did not pay much attention to reputation or brand name. But competition and market rules forced the company to change its mindset. After going public, Lideco began undertaking large urban infrastructure investment projects. The first project that marked the transformation of Lideco was the Dich Vong new urban area, kicked off in 2004. It consisted of four apartment buildings with 18 - 47 floors and 154 villas, semidetached houses. This was the mainstream source of revenues for Lideco in 2007 - 2010. Following the Dich Vong new urban area were North Highway 32 new urban zone, Tay Do urban zone (both in Hanoi), Hoa Son urban area (Hoa Binh province) and many others. Big investment projects have powered Lideco. Currently, the firm has six member companies with assets valued in trillions of Vietnamese dong.

 

In recent years, businesses have faced daunting challenges as a result of economic recession, rising inflation, stagnating production and frozen real estate market. Anticipating those complex hardships, Lideco has regularly reviewed and adjusted production and business plans to have

Awards and titles - Third-grade Labour Order bestowed by the State President - Certificate of Appreciation for Excellent Party Tasks granted by Tu Liem District Party Committee - Certificate of Appreciation for Clean and Strong Party Organisation - Outperforming Business Certificate granted by Hanoi People’s Committee - Reputed Securities Trademark in 2008, 2009 and 2010 - Vietnam Golden Securities 2009 - Top 500 Vietnam Private Companies in 2008 and 2010 - Merciful Businessman Certificate 2009 - Community-oriented Business Award 2009 and 2011 - Vietnam Empathy 2009 - Vietnam Gold Star Award 2010 and 2011 (TOP200) - V1000-Top 1000 taxpayers 2010 (ranking 151), 2011 (ranking 77) - TOP100 Trade and Service Company Award 2011

more appropriate strategic directions and adopt proper action plans and measures to maintain stable operations and avoid risks.

 

On the basis of existing orientations and capacity, the Board of Directors added some contents to corporate governance regulations like improving accountability of managers, raising individual rewards and punishments, and accountability. Lideco also strengthens partnerships with its strategic partners, invests in modern technologies, equipment and machines to best prepare resources for project implementation. In addition, the holding company also instructs its subsidiaries to go their own ways, suspend new products, and reschedule new investment projects to focus on existing ones and wait for a better market. The firm also carefully screens outside projects to refuse unfeasible ones.

 

Besides, to minimise construction costs, particularly impacts from price-changing materials like steel and cement, Lideco maintains and fosters close relationships with traditional suppliers and anticipates rising construction material and equipment needs to have better project estimates and price controls. At the same time, Lideco signs construction contracts basing on actual workload to easily adjust values, thus mitigating price factor risks. For that reason, completed projects have reasonable values in relation to cost prices.

 

Mr Nguyen Van Kha asserted that Lideco, with its capacity, experience, innovation and financial resources, will soon overcome difficulties to assert its reputation to customers and partners.