Cavico Vietnam: The history of a Professional Contractor

3:26:33 PM | 7/8/2005

After four years of operation Cavico Vietnam, has won tenders and constructed over 50 projects nationwide worth VND4,000 billion (US$254.78 million) including such pivotal projects as Yaly Hydropower, Ham Thuan-Da Min Hydroelectricity, and Ho Chi Minh Road. Cavico Vietnam has emerged as a new and successful enterprise. Vietnam Business Forum interviewed General Director Bui Quang Ha about Cavico Vietnam’s achievements.

Can you explain the key factors to Cavico Vietnam's successes?

Cavico Vietnam is a private enterprise. In the initial days, Cavico Vietnam specialised in drilling, detonating, loading and unloading earth and stone in the Nui Beo coal mine in Quang Ninh province.

Cavico has now extended its activities into developing and constructing urban zones and banking systems by share issuance apart from its initial scopes of executing and constructing underground works, infrastructure works and hydropower.

Unlike the colossal and powerful Vinaconex, Song Da Corporation and others, we have our own business strategies in which updated technologies are preferred and product quality is king. Therefore, Cavico Vietnam has invested hundreds of billions of Vietnamese dong to buy new equipment to realise its biddings. High capacity and highly stable Caterpiller machinery and equipment imported from the United States are the mainstay. We have also built a repair workshop system to enhance our equipments capabilities.

As a result, Cavico Vietnam has to date become the “professional contractor” for Dai Ninh, Tuyen Quang, Se San 3 and Vinh Son hydropower plants, and we are renowned for our timely construction pace and high quality. September 2004 marked a historical step in the development of Cavico Vietnam when the Prime Minister signed the Decision No. 1298/CP-CN to allow Cavico Vietnam to participate in building the Dong Nai 2 hydroelectricity project with Cavico’s work valued at VND300 billion (US$19.1 million). This shows that Cavico can go neck and neck with construction corporations in the field of building hydropower projects.

We create the most effective working environment where the director is an initiator, adjuster and instructor of the enterprise culture. All corporate members must combine individual and collective interests, creating a competitive, initiative and active environment.

Financial problems and outstanding debts have hampered the development of enterprises engaged in the construction industry. What about Cavico’s situations?

Outstanding debts are a headache for both construction enterprises and the entire construction industry. In my opinion, the biggest reason lies in miscalculation of capital sources.

Interested parties think that taking over projects means being successful and capital is considered being negotiable between contractor and investor later. This is not suitable for small-sized enterprises who are responsible for projects.

As for Cavico, realising difficulties in the construction industry, we shifted our investment focus to financial and banking systems and the construction of new urban zones, industrial zones and others. Therefore, outstanding debts have little impact on us. When an enterprise in the construction industry puts in a tender, it must know its financial capabilities, technologies and input forecast before attaining support from the government. Specifically, the amended Decree 181/CP on real estate business is helping earnest enterprises smoothen business and make a contribution to the community.

Currently, we are investing in the construction of the 442-hectare Chieng Ngan new urban zone (in Son La Province) constituted from six new village clusters functioning as a city-level administrative, tourism, cultural and entertainment centre. The Chieng Ngan zone is expected to become a political, economic and cultural centre in Son La Province in particular and North Eastern region in general.