Starting a business from a steel retail in 1994 with only two chi of gold (a chi is equivalent to a tenth of a tael); in 2001, after more than seven years of accumulating capital and experience, Mr Le Phuoc Vu built up the Hoa Sen Group Joint Stock Company with an initial charter capital of VND30 billion and 22 employees. To date, after nearly 12 years of construction and development, Mr Le Phuoc Vu with his staffs has managed to build Hoa Sen Group – a leading enterprise in the steel field with sales of over VND10 trillion a year. By strong and steady strides, Hoa Sen Group has gradually asserted its position as the leading enterprise in Vietnam and the region in the steel field. Vietnam Business Forum had a talk with Mr Le Phuoc Vu, Chairman of the Board of Directors of Hoa Sen Group. Tran Trang reports.
Could you share us some of the outstanding results that Hoa Sen Group has achieved in recent years?
In recent years, the global economy felt into recession and stagnation as a result of the global financial crisis. Domestic enterprises have faced numerous difficulties and corrugated steel industry is no exception when the effects of the economic downturn had a significant impact on domestic demand. Along with that is the real estate market has frozen for long time making the demand for corrugated steel and building materials declined.
Overcoming these difficulties, with the consistent policies and flexible operating solutions of the Board of Directors along with the best efforts of staff, in fiscal 2011 - 2012 Hoa Sen Group achieved good results: VND10,088 billion revenue, net profit reached VND368 billion, up 24 per cent and 130 per cent over the previous fiscal year, export revenue of US$180 million, bringing Hoa Sen Group to become one of the top manufacturers and exporters of steel business in Southeast Asia.
What are the factors that have helped the Hoa Sen Group gain strong growth?
This is a result of Hoa Sen Group has promoted good core competitive advantage chains have built throughout the development process, including: closed steel production and business process; distribution branch, system-wide retail ; powerful brands chain, friendly and community-oriented; particular management system and corporate culture; proactive investment in new technology.
In the market economy and the global extensive integration, in order to survive and develop, enterprises must develop their own ability to adapt to any changes as well as the ability to predict the complex evolution of economy. Be aware of this problem, since its establishment, the Hoa Sen Group has built itself a very special business strategy, which is to build a wide system of retail distribution. Retail branch network has helped Hoa Sen Group dominate the galvanized steel domestic market during that time, and also thanks to the branch distribution system, in the time of economic crisis in 2008 when the steel prices went down, Hoa Sen Group has sold inventory at high price very quickly, timely help businesses cut holes, stable operation of the business.
Moreover, the ownership of the closed business process chain from the factory to the hands of consumers, coupled with investment in modern equipment to produce high-quality products are always brand on reputation, revenue and profit of the Hoa Sen Group is high and steady growth. These factors have created a difference of Hoa Sen Group with other businesses and industries and one of the important elements for Hoa Sen Group achieved positive results during the time.
To make success target three number 1 (1 million tonnes / year - US$1 billion in revenue -profit 1.000 billion), how will Hoa Sen Group carry out the directions and solutions?
We have applied the SWOT analysis (strengths, weaknesses, opportunities and threats) to look so clear, so true about Hoa Sen Group to planning for 2013 as well as the other long-term strategies. Accordingly, the advantages of Hoa Sen Group are a development platform based on 5 solid core competitive advantages, strong brand reputation, along with a team of 3,000 consensus employees.
Hoa Sen Group now makes up more than 40 percent of the market share steel sheet and is the leading exporter of Southeast Asia. Opportunities will be more open than in upcoming period when development model "cranes flying" a reality in Southeast Asia. If you look beyond that and capture this growing trend, there will be an opportunity to break Hoa Sen Group, create distance with domestic peers. Hoa Sen Group is currently investing some production lines, and began to implement key projects in order to catch the upcoming development opportunities.
After dominating market share, confirming the brand and quality in the domestic market, Hoa Sen's goal is to reach out to the international market. Hoa Sen selects Southeast Asia as the first step in, then expands into more distant and more potential markets. Currently, in addition to ASEAN, Hoa Sen products has expanded to more distant markets such as the Middle East, Southeast Asia, Africa, and are surveying the U.S., Australia, Europe, America. However, one of the risks that the Hoa Sen Group may have to face in the near future to boost exports is the ability to face trade barriers in countries that export market of Hoa Sen. Anticipating this possibility, Hoa Sen Group is conducting a number of preparatory steps necessary to respond to these adverse events may occur. The next step of Hoa Sen Group is development cooperation string the Hoa Sen brand in overseas markets and review investment plans plants in these markets when conditions are suitable.
Implementation of good corporate social responsibility (CSR) toward sustainable development is a challenge for developing countries like Vietnam. Can you tell us the meaning of CSR for Vietnamese enterprises, particularly in the Hoa Sen Group?
For me, the grace to Buddha is the greatest grace in my life. Doing good things to me is not only a pleasure, an honor, but also a "good path" to find the most perfect enlightenment. Hoa Sen means: "Immaculate, loyal, patient, generous, pure, straight, honesty and real." Business point is honesty job, create jobs legitimate workers, and above all, the most basic happiness for human beings, throughout the development process, we always put the interests of business in parallel with social responsibility. So that a lot of the neck shareholders, partners and consumers have known Hoa Sen Group as not only a strong business in the field of steel sheet, but as now at the forefront of community activities.
Buddhist philosophy has great impact on the Hoa Sen Group's business lines because I have faith in the Buddha. So the word heart has always been high and reflected in the value of the Hoa Sen Group towards, that is "Honestly - Community - Development". Hoa Sen Group has been recognized as a national brand, the brand is also associated with public perception, the share of social responsibility. For Hoa Sen, trusting, supporting consumer and community is not only a effort to the Hoa Sen Group ongoing development efforts, but also an opportunity for us to implement better shared commitment social responsibility of the business community.
Some Titles/ Awards of Hoa Sen Group
• National Brands 2012
• Merit of the Prime Minister, 2011
• Continuously achieved Vietnam Gold Star Award 2005, 2007, 2008, 2009, 2010, 2011
• Top 10 CSR company in 2011
• Continuous presence in the list of 500 largest enterprises in Vietnam (2007, 2008, 2009, 2010, 2011); and numerous awards, trophies and abroad.
Vietnamese
