The Vissai Cement Group will make its first shipment of the year to Bangladesh this month, crossing the 10 million tonnes export mark after four years. Founded in 2004, Vissai has five cement plants with a total capacity of 7.5 million tonnes of clinker per year. Its products have been exported to 30 countries and territories. CEO Hoang Manh Truong spoke to Viet Nam News about his desire to develop Vissai into a global brand.
Vissai has become a reputed brand in the domestic market after 10 years of operations. What is the key to the company's success?
|CEO Hoang Manh Truong. — VNS Photo
I always keep in mind that if you are dishonest and do things without a heart, you'll find it hard to do anything. But if you work hard and work seriously, difficulties can be dealt with faster.
To conquer the market, production capacity, product quality, delivery schedule, prestige and experience are the decisive factors for success rather than low prices. This is the path that Vissai has consistently followed.
The group's cement is present in many countries, including hard-to-please markets like Australia, Japan and France. How have you managed this, when Vietnamese brands typically find it difficult to make an international mark? What is your view on Viet Nam's cement exports as well as product quality?
We do not look to export cement at any cost, and our selling prices are not lower than that of competitors. We always focus on quality to satisfy the most stringent demand of developed markets by using new technologies and skilled employees. For demanding markets, Vissai invites their experts to Viet Nam and ask them to work directly at our plants, giving them access to our production systems. Most customers agree that Vissai's technology, equipment and production level have reached a "stable" status.
Export of cement brings good profits, of up to US$60/tonne. The main material for production is limestone which is abundant in Viet Nam with reserves estimated at billions of cubic metres. This is also available at comparatively lower costs here.
Vietnamese cement basically meets 80 per cent of the international standard in variety, model and quality. However, there are specific demands for cement, depending on each region. Currently, Vissai's cement meets most of the demand in almost all the continents - Latin America, Europe, Africa and Asia.
Many leading cement names including Switzerland's Holcim are your trading partners. How did you convince them to co-operate with your company?
The group is fortunate to have Holcim Group in our export corner. Apart from co-operating in the export business and promoting Vissai's products in potential markets the world over, Holcim also supports Vissai in production and quality management.
It'll be a long time before a new company like Vissai catches up with Holcim's science and technology achievements which are based on over 100 years of experience in the cement industry. However, Vissai has built trust with Holcim's leaders by demonstrating the ability to learn quickly. The two companies have signed a five-year technical support contract to develop production technology as well as business activities.
It is said that your first shipment abroad this year to Bangladesh is something special. Can you explain?
In January, Vissai will cross the 10-million-tonne export mark, four years after it began exporting. To mark this landmark, Holcim is using the newly-launched vessel, Spirit of Seatrek, to ship Vissai clinker to Holcim's plant in Bangladesh under a sales contract between the two companies.
|The Spirit of Seatrek docked at Cam Pha Port, Quang Ninh Province. — VNS Photo Doan Tung
Spirit of Seatrek, with a DWT of 62,000 tonnes, is the pride of the reputed SeaTrek shipping company. This is the first voyage of this vessel after being launched early this month.
Your group's production capacity is expected to increase to 10 million tonnes per year in 2016. What has the company done to overcome the difficult period when there was a glut in the domestic market, and how has it managed to stick to its expansion plan?
The market condition has been difficult in general for all companies, and individual companies have their own problems. Vissai has had its share, too. The issue is how we deal and cope with the problems and market conditions.
About 10 years ago, Viet Nam was still importing cement. When annual economic growth is around 7-8 per cent, the nation's current cement production will meet domestic demand. However, when the growth rate reaches two digits, which Viet Nam aims at in the coming years, the country will lack cement.
Overproduction is a short-term difficulty. Along with its expansion plan, We took the initiative to sign 3-5 year contracts to sell clinker and cement to big international companies like Holcim, Heidelberg Cement and, Cemex. We also increased investment in services to promote export volumes, like building an international port in Nghe An and increasing our marine transportation capacity from 50,000 tonnes to 150,000 tonnes per month.
You said the group is striving to develop into a global brand. What will the company do to achieve this goal? How do you see the cement industry developing in the coming years?
To win in the international market, quality and pricing are important, but equally important is the working spirit and service quality in terms of supply and delivery. Clinker is a product that needs careful maintenance as it is taken to different parts of the world. Thus, along with good quality, Vissai endeavors to regularise production and ensure timely delivery. Good logistics will help build customer trust and help develop our brand name in the market.
In 2015, demand for cement in the world is expected to decline along with slower growth in China and overproduction in South Korea, Japan and Thailand.
Viet Nam will also face fierce competition from Thailand and China. However, with a clear plan to focus on strategic markets like Australia, New Zealand and the Philippines, we believe the company can maintain our export figures this year.
2016 will be more complicated, depending on economic growth in China, Thailand and South Korea. The competition in prices is expected to be ferocious in 2016. Therefore, to maintain a strong foothold, we should put in a robust performance this year that creates a good foundation for 2016. — VNS