Since the founding of Hoa Binh, the pioneers have determined to build a team of progressive members who always strive to improve themselves, to innovate and be creative in order to constantly develop the organization and contribute the most to society. After 35 rigorous years on the journey “FROM 0 TO 1”, a new ecosystem has formed, marking an era of forging new values.
Talking with The Saigon Times, Mr. Le Viet Hai, Chairman of the Board of Directors of Hoa Binh Construction Group shared about the 35-year history of the enterprise’s development through the message “FROM 0 TO 1”. In addition, there is some information about the strategy and value system that the company is aiming for in the new period in order to continue to develop the Group in a fiercely competitive, increasingly complex, and ever-changing business with many unpredictable movements. What will the next generation of Hoa Binh do to inherit the valuable foundation of an industry-leading enterprise, optimize the Group’s inherent values and create a new era.
35 YEARS FILLED WITH VALUES
35 years of establishment and development of Hoa Binh Construction Group is a long journey for a Vietnamese enterprise, but the message “FROM 0 TO 1” is a journey that seems to be very short. What is the meaning of this message?
For myself and Hoa Binh, “FROM 0 TO 1” is a long arduous journey with many challenges to overcome. We started our business with a lot of 0s: No office, no factory, no means of transport, no means of construction, no business experience, no management system, no technology, no instructors, no sponsors, no brand reputation, no money, no sponsors… But of all the things that weren’t there, there was one very important thing that helped Hoa Binh get where it is today. It is intangible capital. That capital can’t be seen with the eyes, can’t be grasped with hands, but has brought a lot of value. That capital source is the desire to renovate he country, to enrich ourselves and our family, the passion for construction, the enthusiasm of the youth; That capital is also the knowledge and understanding of a newly graduated architect and, most importantly, the good tradition of the family in business, in lifestyle, and a shining example of the two parents’ morality, and their teachings.
The number 1 in this message is not a quantitative number, but rather the position that Hoa Binh Construction Group has achieved over the 35-year journey of value creation. Currently, Hoa Binh is ranked as the most prestigious contractor in Vietnam according to Vietnam Report, is the enterprise with the best working environment in the construction industry, is the only contractor in the top 10 largest private enterprises in Vietnam. Hoa Binh is also the first and only contractor to meet Vietnam’s corporate culture standards, the only contractor to achieve the national brand 7 times, the first contractor listed on the stock market, it can also be affirmed that Hoa Binh is the contractor that has cooperated with numerous leading contractors in the world. The most prestigious, the best, the biggest, the most, the only, the first… are the proud numbers that Hoa Binh has achieved through its 35-year journey. In addition, this message also conveys another important meaning that the end of this journey is the start of a brand new journey. The next 35-year cycle of a new journey that also starts from 0 and the destination is number 1. The road ahead would be very glorious but also full of thorns, challenges. A kind, pioneering, disciplined, resilient team will definitely have the courage to overcome all challenges to succeed!
So the journey from “FROM 0 TO 1” is not a numerical distance. Please brief us on each development stage of the group.
We have various stages of development through 5-year milestones. In the first five-year phase is to build up the force and determine the direction. At that time, Hoa Binh was relatively small, so we chose works of high artistic quality and small scale because we could not compete directly with large state-owned contractors. This was the stage for us to get the foundation and the first sales numbers.
In the next 5 years is the period of improving management level and expanding the market. From this milestone, we have a longer-term plan for growth, increasing revenue by 5 times every 5 years. This is the stage of receiving technical technology, construction management experience from abroad and this journey of learning, development and growth lasted for 20 years (from 1995 to 2015). This is also the period when Hoa Binh broke the rule that the bigger it grows, the slower it grows when it has a growth rate of more than 5 times from 2013-2018.
From 2015 to now can be defined as a development stage to a new height when Hoa Binh gradually removes the image of foreign subcontractors and replaces them as general contractors for large-scale projects in the country. Hoa Binh is in a new state of being ready for new goals.
NEW CYCLE OF THE “FROM 0 TO 1” JOURNEY
At the last general shareholders’ meeting, you likened Hoa Binh Construction Group to “a whale in a shallow pond.” Is it time for the group to sail the high seas?
That is the inevitable law of development. Similar to before, we moved from a family company to a joint stock company and then continued to be listed. When businesses grow to a stage where they have to transition to continue to grow, they must set goals and prepare internal resources and look for opportunities to achieve that goal.
Currently, with the construction industry, the growth limit in the domestic market has reached the threshold compared to the scale of Hoa Binh. Specifically, in 2008, the company’s revenue was 700 billion VND, but in 2013 it increased to 3,500 billion VND. This number continued to skyrocket on a 5-year cycle, reaching a peak of more than VND 18 trillion VND in 2018. However, the growth circuit then broke, as shown by the fact that last year’s revenue was only 11,350 billion VND and profit less than 100 billion. We are really like a whale in a shallow and overcrowded body of water, it’s time to go out into the ocean to roam free and grow large. Our target market is developed and large countries such as Canada, USA, Australia and Europe.
From working as a subcontractor for foreign general contractors to replacing them in Vietnam, and later the world. Is there ground for Hoa Binh to be confident in this ambitious plan?
If we take an overview of the construction industry, especially in the real estate sector, in the past 5 years, we can see that there have been too many adverse fluctuations. The first is when there was very little work because there were not many new projects licensed, the second is that many works are stalled due to the Covid-19 pandemic, the third is the difficulty due to the disruption of the supply chain of materials and human resources, the fourth is the price slippage of materials and labor due to inflation, the fifth is financial difficulties due to the policy of tightening credit in the investment sector. However, if we look globally, Vietnam’s construction industry is having three important strategic advantages, including: First, the maturity in the role of general contractor of construction enterprises, secondly, the abundant in specialized human resources and thirdly, the very competitive nature of the supply chain of construction materials.
As for Hoa Binh, we are an organization that has cooperated with more than 20 reputable contractors from China, Korea, Japan, France, Germany, USA, Australia for a long time and has not stopped learning, accumulating knowledge and experience to meet the increasing requirements of the market.
The next thing is that we are a company that applies the most modern construction technologies combined with the quintessence of previous partners, the outstanding scale of housing construction makes us much more confident. It is worth mentioning that enterprises like Hoa Binh have a good construction management system because they started much later, so there were many opportunities to make reasonable adjustments to their business model, organizational structure, and method of operating the apparatus.
Overseas markets are thus the beginning of the new “FROM 0 TO 1” cycle of Hoa Binh, aren’t they?
Yes, we pioneer and do not hide our ambition in the plan to export general contractor services and become the leading contractor in the international market for housing construction. This cycle we still have to start from the No. 1 position in Vietnam but still at 0 for the global market. Our goal is that the new cycle goes “FROM 0 TO 1”. In the global market, it will take the same amount of time to go “FROM 0 TO 1” in the domestic market. That road will be full of ups and downs but we will overcome it with many other no’s. That is no hesitation, no inferiority, no conceit, no fear, no discouragement, no backing down… because this is the inevitable path that Hoa Binh must go through to continue asserting itself. The number 1 goal in the country is just a milestone to pass, not the destination.
But different from the start-up time, Hoa Binh started as a leading contractor in Vietnam with maturity and great pride. We understand where we are best at and focus on it to concretize our ambition to become the world’s leading housing contractor after about 30 to 35 years.
This time frame will put big pressure on the next generation. What do you do to create motivation for them?
The results we receive are not simply a day or two, but it is the maintenance of the outstanding efforts of the whole team throughout the development process. We have never stopped enriching the intangible capital of the business, constantly learning to make a decent product for our customers, and thinking about the livelihood of our employees to motivate themselves and for them to work towards a common goal.
I am very fortunate to have a successor generation of leaders who are very passionate about my profession. I have inspired my team with all the enthusiasm and sincerity of my heart and mind to be able to ignite the next generation of the corporation’s genes. Those are the people who understand Hoa Binh best, full of youthful enthusiasm, full of Hoa Binh’s ambition, and all of these things come naturally because they are deeply embedded in each member’s heart. It is they who develop this spirit in the most natural way to inspire and motivate all members to strive for the long-term development of the business, and successfully fulfill its ambitions and set missions.
Many entrepreneurs wish to pass on their legacy, tangible or intangible, to the next generation. What is your legacy?
As an architect and founder of a construction company, I aim to create heritage through perfect and sophisticated architectural works with high artistic and high technical value. It is the passion and also the pride of construction and architecture. But what I value more is the intangible heritage, those heritages can exist longer and are the foundation to create a high -value tangible heritage. I wish to leave 3 intangible heritage: Firstly, an exemplary corporate culture featured of the Hoa Binh brand that is cherished and preserved by classes of generations. The corporate culture must be infused deeply into the flesh and blood of each member, expressed in a pure language and into the operation of the business in a comprehensive way. After 35 years, I have summarized that culture in the Group’s declaration of values with a complete value system of 7 groups with 56 values including: Civilized conduct, Ethical behavior, Commitment fulfillment, Discipline & compliance, Integrating quintessences, Dynamic creativity, and Proactive cooperation. The second intangible heritage is “green music”. In my opinion, besides the “yellow” music being about romantic love, the “red” music about the fighting spirit of the soldier, the “green” music sings encouraging tunes for the peacetime warriors, the ones that fight for the green color of life, the green color of sustainable development and of peace. I have prepared many songs not only to encourage Hoa Binh members but also for all who put in the hard work and dedication towards the virtuous things in life. Another spiritual heritage that I was born and raised in a country with the most pain and loss because of the war in the history of the great, the founder of a corporation named Hoa Binh, always incubating the ambition to bring a solution for eternal peace to humanity. Our ancestors have taught that “It’s no use preaching to a hungry man.” I think Hoa Binh needs to do very good business to have enough resources with much prestige; from there, there is enough means to implement the peaceful solution that I believe is very feasible.