HOANG ANH GIA LAI: Affirming Stature of a Leading Group

In recent years, Hoang Anh Gia Lai has been known as a top-tier economic group in Vietnam. What has made HAGL grow from a small production unit to a leading economic group with a chartered capital of VND2,700 billion? On the occasion of Gia Lai province special issue, the Vietnam Business Forum has an exchange with Mr Nguyen Van Su, General Director of Hoang Anh Gia Lai Group, on this success.

In recent years, Hoang Anh Gia Lai has been known as a leading economic group in Vietnam and has made rapid strides in many fields. Could you briefly introduce the development process of Hoang Anh Gia Lai Group as well as its memorable milestones?
If you look at the current size and position of HAGL, you will not think that HAGL started with a small school table and chair production unit set up in the 1990s by Mr Doan Nguyen Duc who is currently the President of the Group. But, HAGL grew very strongly in the following years. The start for such development was the investment in an interior and exterior furniture factory in Gia Lai province in 1993. Although the initial investment scale was not big, it was the important stepping stone to continuous breakthroughs of HAGL in the following years. Since 2002, HAGL has invested in many large-scaled projects throughout the nation, covering many fields such as rubber, hydropower, mining, soccer training and specially real estate which HAGL is holding the No. 1 position in Vietnam.

 

In my opinion, the most important milestone in the HAGL history was its transformation into a joint stock company in 2006. Arguably, HAGL would not have the current position if it did not go public. Equitisation took HAGL to a new page of development. Since then, HAGL made continuously long strides to become a leading economic group. Currently, HAGL is known as a leading economic group with many business fields, a strong workforce, many member companies, nationwide investment projects and expanding presence in Laos, Cambodia and Thailand, tax payment amount of VND1,000 billion upwards per annum, a strong trademark, an excellent governance, and generous contributions of at least VND20 billion to social development activities.

 

After less than 20 years, HAGL has become a leading group. What makes the success of HAGL?
There are three important elements that create momentums for the success and breakthrough of HAGL in the past time.

 

The first and foremost factor is the customer’s trust. This is the most important driving force and the long-term strategy we are pursuing to make new success and breakthrough. All products and services that HAGL introduces to the market win the absolute trust of customers.

 

Secondly, the company has an excellent human resource. In 1993, we had only some 100 workers, but our workforce now constitutes some 10,000 people, some 7 % of whom hold university degrees or higher.  The success of HAGL is also the result of endless inspiration and efforts of corporate leadership.

 

The final element is, in a broader sense, the trademark - another momentum to make our success. The HAGL trademark is better known thanks to its sponsorship for soccer. We always attach much importance to building and popularising the trademark and expanding marketing activities to edge up competitiveness and cooperate with domestic and international strategic partners to create capital sources. This is an important factor for the successful integration of HAGL. Since 2007, the brand name of HAGL Vietnam has been more widely known thanks to its display on Emirates Stadium of Arsenal Football Club following its advertisement contract with the club. The HAGL Vietnam brand name is displayed on TV channels in more than 100 countries with copyrights to broadcast live the English Premier League.

 

Spurred by marvellous successes in the past years, how will the targets and strategies of HAGL be for the coming time?
HAGL has determined its sustainable development strategy for the coming time. The first field is growing and processing rubber products. At present, HAGL is developing a project to grow 51,000 ha of rubber trees, including 20,000 ha in Laos, 20,000 ha in Cambodia and 11,000 ha in the Central Highlands of Vietnam. This project has been carried out since 2007 and is scheduled to be completed in 2012. Our second target is investing in hydropower industry. We plan to build hydropower plants with capacity of 400 MW and this will require some VND8,000 billion of investment capital. In 2010, HAGL will have revenues from this investment. Our third strategic sector is mining. We expect to produce 20 million tonnes of ores. These three fields will create stable sources of incomes and profits for HAGL every year.

 

Our fourth field is real estate. HAGL is now holding the No. 1 position and we will surely strive to keep this place. In real estate sector, we focus on apartments and offices for lease. HAGL is managing 2.5 million sq.m of floors. Currently, the group has created large land funds enough to supply the market every year.

 

Besides, the group will still develop the wood industry because it is a traditional business although the profit margin is not wide. This sector generates VND150 billion of profit a year for the group. Wood and stone industries will play important roles in sharpening the competitive edges of the group’s real estate projects.

 

With the current stature, the role of HAGL is continually increased, especially in the socioeconomic development of Gia Lai province. What do you say about this role?
In my opinion, this should be objectively assessed by the society. Of course, HAGL is playing a very important role in the provincial economy because we have made significant contributions to the total social investment, the industrial production value and the servicing value in Gia Lai province. In the coming time, when our rubber, hydropower and mining investment projects start operations, our contributions to the industrial production value will be multiplied by the current level and we will create jobs for much more people, not only 10,000 employees as now.

 

At present, HAGL is paying VND1,000 billion of taxes to the State Budget. This amount will surely increase in the coming time. In Gia Lai province alone, we will contribute at least VND150 billion to the State Budget and will accelerate our charity and social development activities.

 

As a locomotive in the provincial business community, how will HAGL invest in projects in Gia Lai province in the coming time?
We pledged and registered with the Gia Lai People’s Committee our investment plans. Accordingly, our target is to invest at least VND5,000 billion in the locality by 2010. Invested and blueprint projects already required VND3,866 billion. The actual disbursement has reached VND1,500 billion.