D2D: 25 Years of Development with Dong Nai

1:50:24 PM | 11/7/2017

2017 marks a 25-year development milestone of Industrial Urban Development Joint Stock Company No. 2 (D2D). In the past 25 years, D2D has been continuously developing and successfully implementing many big projects, thus affirming its brand position on the market and positively contributing to the socioeconomic development of Dong Nai province in particular, and of Vietnam in general.

The predecessor of D2D was a wholly State-owned Civil Engineering Construction Company No. 2, which was specialised in construction. As one of well-reputed construction companies in Dong Nai province in the 1990s and 2000s, the company took part in many important, high-quality projects. In 2003, D2D was ranked a first-class company by the Dong Nai Provincial People’s Committee and allowed to carry out construction projects of Group A by the Ministry of Construction.
After many successes in the construction industry, in 2003, D2D stepped into a new business line by investing VND200 billion in infrastructure development in 350-ha Nhon Trach 2 Industrial Park. This modern industrial park has the fastest occupancy rate in Dong Nai province. Mr Ho Duc Thanh, President of the Board of Directors of D2D, said that the fully occupied Nhon Trach 2 Industrial Park stably generates VND60 billion of revenue for the company each year.

In the real estate field, D2D impressed the industry with the construction of extended Road 5 and Road 5 Residential Area in Bien Hoa City, which cost VND260 billion of investment capital. Not only completing the infrastructure and creating new development breakthroughs for Bien Hoa City, the Road 5 Residential Area later became a source of inspiration and experience for D2D to confidently step into the real estate market in a robust manner, with bigger and bigger projects like VND210-billion A1 Apartment and A1 & A2 Block Project on Nguyen Ai Quoc Street, Quang Vinh Ward, Bien Hoa City; and the VND400-billion Long Thanh Market.

At present, D2D is carrying out two important projects: VND1,000-billion Thong Nhat Residential Area (Bien Hoa City) and VND350-billion Loc An Residential Area (Long Thanh District). With its well-established brand prestige and well-timed product launch, these projects exerted a very strong pull on customers. “Loc An Residential Area, covering 41 ha with nearly 800 land plots, will hit the market after 2017. Thong Nhat Residential Area (second phase), already launched onto the market, is generating a handsome amount of revenue for the company. The income from this project plus stable revenues from Nhon Trach 2 Industrial Park, Long Thanh Market and Loc An Residential Area will enable D2D to fund new projects in the coming time,” he said.

With the great effort of all employees, the cooperation, trust and support of local authorities, customers, partners and shareholders, D2D has made great and solid strides. From the starting capital of VND600 million, the company’s owner equity has exceeded VND353 billion, an increase of 524 times and its total assets surpassed VND1,200 billion, seeing an average annual growth of 25 per cent. In 2016 alone, D2D’s revenue reached VND433.303 billion, 48 per cent higher than the full-year plan and 39 per cent higher than in 2015 and its profit before tax valued VND70.315 billion, 19 per cent higher than the yearly plan. The firm paid VND105.143 billion to the State Budget, 35 per cent more than the plan and 112 per cent higher than a year earlier. It also paid a 25 per cent dividend in the year. In 2016, its total asset value also increased more than 20 per cent from a year earlier to VND1,279 billion.

During 25 years of construction and development, D2D has contributed positively to local socioeconomic development. Its contributions are not only expressed in the role of creating urban zones and creating many products for the society, but also in its contributions to the State Budget and to charitable and social activities. D2D is a big taxpayer, with over VND100 billion in 2016 alone. The concern has also actively taken part in social activities with annual funding amounting to billions of Vietnamese dong. Typically, D2D annually finances VND300 million to the province’s study promotion fund and VND100 million to Social Inclusion Employment Security Fund.

Quick interview with Mr Ho Duc Thanh, President of D2D

Operating in a highly volatile and competitive environment, what core values help to make D2D a success?
D2D had a relatively low starting point and had a little capital for business but I am proud of the 25-year development of D2D, slow but firm. While many companies fell short of capital, D2D's financial balance at banks was VND400 billion at the end of 2016. To be successful in real estate business, a company must have three factors at the same time: Right time, right place and right person. D2D typically focuses on developing projects in densely populated cities. Although site clearance works may face more difficulty, our projects have high potential. Having strong financial health and no pressure from banks is an advantage for D2D.

In a nutshell, I think that success or failure depends on our own decision. As going faster will be more likely to stumble, we would rather choose to go slow but be sure to find the right way and take the right steps. We did not embrace so many projects at the same time, but we decide on our own capacity and with our own way.

After 25 years of development, D2D has grown to a fairly large scale. So, how could you adopt best corporate governance practices?
Governance is what any business must care about and prepare for. However, it is also necessary to apply the market mechanism to produce the best effects. As said, in D2D, I do not advocate “embracing” everything. I will not do what we are not good at and I will hire others if they do better. It doesn’t matter who does but who does better. This explains why the competency of D2D has increased a lot but the workforce of D2D has almost not increased. At present, we have only 85 full-time employees. Although we have a small workforce, their productivity and efficiency are very high.

Could you please lay out D2D’s development orientations for the upcoming years after its great successes?
D2D will continue to invest in real estate and urban infrastructure development, especially c2 Bien Hoa City, to help solve housing, urbanisation and traffic development issues. In addition, D2D will pay attention to investing in social housing projects for workers in industrial parks, with the immediate priority given the housing project in Nhon Trach 2 Industrial Park.

What do you think about the business environment in Dong Nai and the government's cooperation with businesses?
In principle, carrying out any business project requires the responsibility of not only enterprises, but also the whole society. The business will directly carry out the project while the government supports it to do the job. The business is the cell of the economy, the maker of products and the generator of social wealth. I am impressed with the message of the Prime Minister that business is not to be managed, but to be served. That is also what the business expects from the government.

The arrival of more investors in Dong Nai over the past time is the right answer to the investment environment in Dong Nai. However, in my opinion, provincial authorities need to pay further attention to administrative reform, especially administrative procedure reform, so as to reduce the time and effort required to complete this work.

Quoc Hung