A New Era of Leadership: Hòa Bình’s Strategic Reconstruction and Quest for Supremacy in Vietnam’s Construction Industry

As Vietnam’s construction industry faces challenges and economic fluctuations, Hoa Binh Construction Group has embarked on a strategic journey of comprehensive restructuring, aiming to reclaim its leading position in the market. Dr. Nguyen Kinh Luan (Jerry Nguyen), Head of Restructuring, Member of the Board of Directors, and concurrently Deputy General Director of Investment and International Market Development, shares insights into their restructuring strategy, sustainable development orientation, cultural identity, and leadership succession plan as Hoa Binh strives for global expansion.

After a prolonged period of challenges in the construction industry and the broader economic context, it appears that Hoa Binh is undergoing a robust restructuring process. Could you elaborate on this strategy?

Dr. Nguyen Kinh Luan:

Restructuring is imperative for Hoa Binh to adapt to the new environment and reinforce its position in the construction industry. We are focusing on four main pillars.

Firstly, we are accelerating the adoption of advanced construction technologies, aiming to reach world-class standards, with a particular emphasis on green and sustainable technologies.

Secondly, we are streamlining our supply chain, both domestically and internationally, to ensure efficiency and competitiveness.

Thirdly, we are integrating artificial intelligence (AI) into our core management functions, from project management to enterprise governance adhering to ESG (Environmental, Social, and Governance) standards.

Fourthly, to ensure stability and sustainable development, Hoa Binh has implemented a stringent financial strategy. For international projects, we only engage in projects with payment guarantees from investors to mitigate financial risks. Domestically, the group focuses on recovering old and difficult debts while tightening the process of evaluating the capabilities of investors in project implementation. Simultaneously, Hoa Binh is perfecting its project management apparatus and deploying an integrated risk management system to minimize bad debts and enhance financial efficiency in the future.

Hoa Binh is one of the few design-build general contractors in Vietnam that has invested over $100 million in construction machinery, enabling us to take charge of project execution, ensuring progress and quality for investors. Our advanced centralized management system optimizes operational processes, enhances transparency, and synchronizes data across the entire system. This system not only effectively monitors domestic and international projects but also lays a solid foundation for maintaining our competitive advantage and meeting international governance standards.

As part of our restructuring efforts, we are also focusing on consolidating the ecosystem of new holdings, evaluating the efficiency of our subsidiaries and affiliated companies, divesting from inefficient and strategically misaligned companies, increasing capital and expanding businesses with high-performing and annually growing companies, and planning for the listing of qualified subsidiaries and affiliates.

Additionally, we are heavily investing in training our workers and management teams, preparing them for the international projects that Hoa Binh is pursuing. This lays the groundwork for us to not only maintain our stronghold in the domestic market but also expand regionally and globally.

Another point of interest is the group’s changes in senior personnel, which has garnered significant media attention. How is Hoa Binh cultivating its leadership to ensure succession and sustainable development?

Dr. Nguyen Kinh Luan:

Human resources are the core of Hoa Binh’s development strategy. We are building a succession leadership team with clear criteria:


young, professional, passionate, confident, capable of independent thinking, daring to face challenges, responsible, and especially resilient to work under high pressure


.

Hoa Binh is not just a business but a cohesive community bound by a strong Vietnamese cultural identity, imbued with humanism and compassion. Each officer and employee carries a desire to reach out, always striving for the sustainable development of the enterprise and the community.

During the recent challenging period, the Hoa Binh team shared the harsh trials and preserved a strong belief in the group’s restoration. With unity and determination, the Hoa Binh team is committed to a comprehensive restructuring process to improve financial health and optimize the operational organization, aiming for a brighter future.

Restructuring inevitably involves personnel adjustments. Some individuals may not fit or adapt to the new strategy. This is a natural process of elimination, but I believe that through this transformation, Hoa Binh will emerge stronger, building a lean, efficient, and prepared team to take the group forward.

What are the biggest risks that Hoa Binh may encounter during the restructuring process, and how is the group preparing to cope with them?

Dr. Nguyen Kinh Luan:

We have identified and prepared response plans for four main risk groups.

Financial risk

is a primary concern. The restructuring process demands substantial capital, while revenue may be temporarily affected. We have established a reserve fund for operating expenses and secured credit limits with major banks. Additionally, the sale of non-core assets provides additional liquidity.

Technological risk

cannot be overlooked. The transition to a smarter management system with AI intervention may encounter technical glitches. We apply a phased implementation approach, have detailed backup plans, and a 24/7 technical team ready to handle any issues.

Finally, there is the

risk from the external business environment

– policy changes, raw material price fluctuations, or geopolitical situations. We maintain an early warning system, diversify markets and supply sources, and develop flexible response scenarios for specific situations.

The construction industry is currently facing significant pressure from sustainability demands and risk management. How is Hoa Binh implementing ESG standards and green technology to meet these requirements?

Dr. Nguyen Kinh Luan:

Green technology and sustainable development are not only trends but also the responsibility of enterprises in today’s context. We are implementing energy-saving construction solutions, using environmentally friendly materials, and optimizing processes to minimize environmental impact. Simultaneously, our project management system is refined according to ESG standards, ensuring transparency, social responsibility, and effective governance. AI integration enables us to analyze project data, optimize costs, and enhance management efficiency. These steps ensure that Hoa Binh not only meets domestic requirements but also aligns with international standards.

Quality has always been Hoa Binh’s top priority, which is why we have been awarded the “National Brand” title in Vietnam consecutively for 9 out of 18 years. This affirms our reputation and commitment to delivering the best value to our customers and partners.

With these changes, what do you envision for Hoa Binh’s future, especially considering the private sector’s emerging opportunities for “leapfrog” growth?

Dr. Nguyen Kinh Luan:

Our goal is to reclaim our leading position in Vietnam’s construction industry and lay a solid foundation for expansion into the international market. Through the restructuring process, Hoa Binh will emerge as a leaner, more modern, and highly competitive group. We believe that with our talented personnel, advanced technology, and sustainable development orientation, Hoa Binh will continue to assert its brand, not only in Vietnam but also on the

global construction map.

Hoa Binh’s journey towards internationalization began in 2011 with the Le Yuan Residence project in Kuala Lumpur, Malaysia. This was a breakthrough move when the Vietnamese construction industry was predominantly focused on the domestic market. Since then, we have expanded our presence in Myanmar, Kuwait, Canada, the US, Australia, Kenya, and Cambodia.

After more than a decade of international operations, we have identified our core competitive advantages.

Firstly

, we can provide comprehensive solutions, from design to project management, with international quality but at more competitive costs compared to developed country competitors.

Secondly

, our team of Vietnamese engineers and workers possess high technical skills, good discipline, and the ability to adapt quickly. We have collaborated with over 20 multinational contractors from China, South Korea, Japan, France, Germany, the US, and Australia, gaining valuable experience and construction solutions that set Hoa Binh apart from many other contractors in Vietnam.

Thirdly

, our experience in diverse climatic conditions and our ability to understand and respect local cultures have helped us build solid relationships with customers and partners.

Currently, we are focusing on four major markets: the US, Australia, Asia, and the Middle East. The success of exporting comprehensive construction services not only benefits Hoa Binh but also enhances the “Made in Vietnam” brand, driving the overall development of the entire supply chain, from material production and architectural design to finance and logistics, paving the way for other Vietnamese enterprises.

Finally, if you could send a message to shareholders about Hoa Binh’s future, what would it be?

Dr. Nguyen Kinh Luan:

I want to assure our shareholders and investors that Hoa Binh is on a path of robust recovery. The challenges we faced have become invaluable lessons, helping us build a stronger foundation.

Restructuring is not just about cost-cutting or optimizing operations but also about strategic investment in the future. We are building a new Hoa Binh – smarter, more sustainable, and globally competitive. I am confident that far-sighted investors will recognize Hoa Binh’s immense potential in the coming period. We are committed to transparency in all our activities, strict adherence to governance norms, and always putting shareholders’ interests first.

Thank you for your insights, Dr. Luan!