I AM in Ho Chi Minh (formerly Saigon) now for my usual advisory work. But this visit is unique in many ways…I get to combine three areas that are closest to my passion in helping emerging businesses grow and expand in the ASEAN region.
In a space of 3.5 days, I will squeeze these three engagements…family business and succession coaching for two families, inviting an entrepreneurial couple from Cebu to set up a manufacturing plant at the Vietnam Singapore Industrial Park and introducing my Ateneo MBA students to business groups covering different industries related to the food, retail, hotel and medical sector.
With my engagement here, I have decided to dedicate today’s article to Vietnam’s newly minted billionaire. He is no less than Pham Nhat Vuong, the owner of Vingroup and the country’s first billionaire.
Pham Nhat Vuong ranks 974th on the Forbes list, with his $1.5 billion assets based largely on the 53 percent stake he owns in Vingroup, a real estate development firm. Just like me, Pham is a certified Gen X.
Generation X is the generation born between 1964 and 1980, and connected to the pop culture of the 1980s and 1990s they grew up in. The term has been used in demography, the social sciences, and marketing.
Pham’s story has something to do with ramen noodles, a tremendously popular quick meal in many parts of the world.
Pham, whose name means “prosperity,” was born in Hanoi in 1968, the very same year of the Tet Offensive. His mother ran a sidewalk tea stand and his father worked in the North Vietnamese air defense force. Post-war Vietnam faced a very serious economic crisis. Pham’s family subsisted for a time on the meager earnings from his mother’s tea cart.
Pham studied economics at the University of Moscow in Russia. After graduating in 1993, he moved to Ukraine and founded the food company called LLC Technocom. Over time, Pham scraped together $10,000 from family and friends and opened a Vietnamese restaurant. Simultaneously, he began making and drying ramen noodles via a process he learned in Vietnam.
The Ukrainians went nuts for the noodles, as they were very poor and very hungry. Pham saw the opportunity and opted to take a risk. Instead of running a small noodle shop forever, he borrowed money at eight percent interest a month and expanded his noodle operations to include the dehydrated mixes used to season Vietnamese noodle soup. A Ramen King was born!
In 2010, Pham sold his noodle company LLC Technocom, which had revenues of $100 million, to Nestle for $150 million. While Pham was building his noodle empire in the Ukraine, he was funneling money back to projects in Vietnam, preparing to return to build an even bigger post-communist fortune. In 1999, Pham took a trip to the Vietnamese beach city of Nha Trang and developed it into the 225-room luxurious Vinpearl Resort. It became a resounding success.
The following year, he opened Vincom Center Ba Trieu, Hanoi’s first commercial tower complex. Three years later, Vinpearl got an upgrade, adding 260 additional rooms and a cable car connecting the island to the mainland.
Next, Pham developed high-end townships, including a luxury development with hundreds of villas called Vincom Village in Hanoi. Vincom went public in 2007, but Pham retained Vinpearl as a separate company for his luxury resort developments. In 2011, Pham merged the two into Vingroup.
If we were to identify certain factors that led to Phams’s business success, what are these?
- Market. Ukraine is the market where his ramen noodles were a hit. This country valued his instant noodle product. The young Pham knew his market well.
- Diversification. Pham’s products and services are varied and diversified in different countries – restaurant, noodles, real estate, resorts, hotels and malls.
- Professional team. His operations are based on scientific and cultural realities – a blend of western and oriental icons. He has at his disposal an elite group of disciplined technocrats.
- Strategy and story. He used man-made and natural resources as factors – right people and appropriate land use.
- Control and inspired leadership. Pham saw to it that he inspired and provided leadership.
- Values and culture. This Vietnamese made use of the culture of hard work and innovation as key factors to his success.
- Financial prudence. Wise management of finances and right marketing of corporate products could be surmised from the growth of his business over time.
In summary, Vingroup’s corporate culture of professionalism and trust is built on six core values: credibility, integrity, creativity, speed, quality and humanity.