Vinadaesung: Lessons of Success

3:26:28 PM | 7/8/2005

A smooth start

Vinadaesung was founded in 1997 and is the first joint venture between Vietnam Post and Telecommunications (VNPT) and Korea's Taesung Group. The Taesung group has since merged into France's Nexans-Korea. Ever since its establishment, its quality of products were similar to the imported cables in the market while their price was much lower, therefore, the products of Vinadaesung rapidly gained control of the local market and entered foreign markets.

The joint venture now makes up between 25-40 per cent of the local market share. Proudly, Vinadaesung is the only Local Area Networks (LAN) cable production company in the region. This product has been sold to Southeast Asian nations and some other Asian countries. It is also helpful for Vietnam's E-government programmes namely management systems for the State, enterprises, finance, banking and so on, which helps to affirm the position and social contributions of Vinadaeshung.

After seven years of establishment and development, Vinadaesung has attained many achievements. Its legal capital has increased from US$3.6 million to US$9.5 million and its investment capital has climbed to US$17.5 million. The joint venture's production capacity has gone up to 1.2 million km of double cable, from the initial figure of 250,000 km. In 2003, Vinadaeshung earned total revenues of US$16.5 million, a figure which is forecast to be more than US$20 million this year. It is now home to 130 staff, each with the monthly income of VND2.5 million per capita or roughly US$160.

Lessons of its success

After the success by Vinadaesung, a flock of local and foreign investors learned from its experience and decided to invest in the cable production sector. Vietnam-made products now occupy over 90 per cent of domestic market. One can learn a lot from the success and experience of Vinadaesung in the Vietnamese market.

First of all, the Vietnamese side mastered technique, management and production skills. Right from the commencement of the joint venture, the Vietnamese party selected the most outstanding staff for the joint venture. Its Vietnamese staff act as a technological and market master, and production manager. The foreign partner definitely believes in their counterpart's capacity and has appointed only one foreign general director for co-management.

Secondly, the joint venture has not only mastered technique but has also given prominence to creativity. During the past 12 years of production, there have been hundreds of initiatives of management and technology worth billions of dong, which have helped to raise labour productivity and save raw materials and energy in a bid to cut down production costs and strengthen competitiveness for products. The joint venture company habitually conducts studies to put new materials into production, expands lines for better product quality and for market demand.

Vinadaesung always strives to get access to the world's new techniques. The joint venture was initially established to produce and supply phone cable, however, after a period of development and continual update of technology, it also markets high-tech cable products for LANs, data transmission networks, railway signal system, etc. Vinadaesung knows the best ways to take control of the market and head for export. At present, its export turnover is a large proportion of total earnings.

Vinadaesung is deeply proud of the role of its managers in all phases. The joint venture is the first company in Vietnam's post and telecommunications sector to follow the quality management standard ISO. "Vinadeasung is a joint venture with a harmonic combination of three parties, namely Vietnam, the foreign partner-Nexans-Korea and the workers, which has lead to its success and sustainable development today. We will bring this advantage into full play to enable the company to grow more strongly and overcome challenges in the integration process", deputy general director Dr Mai Thanh Hai said.