Do you know your landlord? You might be surprised!

PHAM Nhat Vuong became a billionaire selling a Ukrainian instant-noodle business and creating VietNam's biggest property developer.

The 44-year-old chairman of Vingroup Joint-Stock Co. (VIC), which is building eight mixed-use projects in prime locations in VietNam at a total cost of more than $4 billion, plans to get even richer selling high- and mid-end apartments to Asians who want to reallocate their holdings from cash and gold.

“Vietnamese people still hold a lot of gold as their savings,” Vuong said in an interview at the company's headquarters in Ha Noi. “Vietnamese are very similar to the Chinese. They just can't sit on gold bars underneath their beds. Eventually they will pull out their gold bars and invest. It will be a boom for the real-estate market.”

Vuong and his wife, PHAM Thu Huong, own about 50 percent of Vingroup, VietNam's fifth-biggest company by market value. Excluding shares he has pledged as collateral to finance some of the company's real estate projects, Vuong is worth $1.3 billion, according to the Bloomberg Billionaires Index. He has never appeared on an international wealth ranking.

Vingroup is seeking to raise about $300 million in a share sale in Singapore by August to fund its Vietnamese expansion. The company shelved plans for a Singapore listing last year when the city-state's benchmark Straits Times Index (FSSTI) fell 17 percent.

“If you give me $10 billion now, I would spend it all on construction because there's so much more to build,” Vuong said. “There is tremendous demand in VietNam.”

Outside VietNam

The billionaire said he also has plans to build properties in Singapore or Hong Kong, where some of Asia's biggest developers are based.

Vuong studied geological economic engineering at Moscow Geology University in Russia. After school, he moved to Ukraine, where he created LLC Technocom, a producer of more than 100 dehydrated food products, including instant noodles and mashed potatoes.

He sold the company for an undisclosed price to Nestle SA in 2010. Technocom had revenue of more than $100 million at the time of the sale. Based on the average revenue multiple of mergers and acquisitions involving food companies worldwide in 2010, the company could have been valued at $150 million when the billionaire sold the operation to the Vevey, Switzerland- based food company that year, according to data compiled by Bloomberg. Vuong declined to comment on the sale price because of a confidentiality agreement.

Back Home

Vuong returned to live in VietNam in 2001, when he started resort developer Vinpearl Joint-Stock Co. He set up Vincom Joint-Stock Co., which develops mid- to high-end commercial and residential properties, the following year. Vinpearl and Vincom, both of which were listed, merged to form Vingroup this year.

Vingroup has controlling interests in 18 mixed-use and resort projects it is building in VietNam, including in Ha Noi, Ho Chi Minh City, Hung Yen and Da Nang. It opened shopping mall Vincom Centre A Ho Chi Minh City, which houses luxury names including Hermes and Christian Dior, in the commercial capital earlier this month. Its effective interest in the projects it is building is about 93 square kilometres as of Sept. 30.

Vingroup's projects in Ha Noi, known for its French colonial architecture and tree-lined boulevards, are within 10 kilometres of the city centre. The government, which created a market economy with Doi Moi, or economic renovation policies, in 1986, is seeking to develop the capital into a modern metropolis.

Feng Shui Matters

At the mixed-use Royal City project, situated at an old factory site about 5 kilometres from Ha Noi's central business district, construction continues around the clock. Buyers of the high-end apartments, which are being sold at $1,800 to $2,500 a square meter, can adapt the design of their units to suit their “feng shui,” or Chinese geomancy, needs. The project will include the first indoor water park and ice-skating rink in VietNam when completed next year.

At Times City, located in a bustling residential and commercial area in Ha Noi, Vingroup opened VietNam's first hospital that offers single-patient rooms and presidential suites. The project, scheduled to be completed in 2014, also includes residential blocks, a mall and an international school.

Vuong, a father of three, said he wants to sell a new “living experience” for Vietnamese people.

“We want to bring better products to VietNam,” he said. “My hope is through changes in lifestyle and the products we consume, it will affect the people and change the way they are thinking. The country will develop further from where it is today.”

Urban Renewal

Vingroup has acquired land from factories that are relocating from central districts to the outskirts of the city as the capital pushes through its urban renewal plan. The company owns about 10,200 hectares of land in prime locations in Hanoi, the southern commercial capital of Ho Chi Minh City, as well as the coastal cities of Nha Trang, Da Nang and Hai Phong.

Buying land in prime or unique locations has enabled Vingroup to sell its properties at a premium to market rates, even during a downturn, said Phuong Ton, an analyst at Viet Capital Securities in Ho Chi Minh City, who has a “hold” recommendation on the stock. Another key selling point is the developer's ability to complete its projects within a short period of time, she said.

Vingroup “has a special advantage in terms of capital; that's why they can target those projects which require a lot of leverage right at the beginning,” Ton said. “Most of the properties that they have introduced in Ha Noi and Ho Chi Minh City have incorporated some new development concept in VietNam.”

Convertible Financing

The company sold $300 million of convertible bonds to international investors this year. It raised $100 million in the first overseas convertible bond sale by a Vietnamese company in 2009. Vingroup had assets of about $1.7 billion and liabilities of $1.3 billion as of Dec. 31.

The billionaire said he will develop properties outside of VietNam “when there's a good opportunity.” He hired McKinsey & Co. this year to conduct a strategic review of Vingroup's business and advise the company on its future.

“Given their vision, limiting themselves to VietNam's boundaries would limit their growth potential,” Viet Capital Securities' Ton said.

Vuong travels to other cities for ideas. When the developer was building the Vincom Centre in Ho Chi Minh City, he organized a trip to Singapore for the complex's retail tenants, paying for their airfare and accommodation. They went to Ion Orchard, jointly owned by Singapore-based CapitaLand Ltd. and Hong Kong's Sun Hung Kai Properties Ltd., to study its shop front and other features of the luxury shopping mall.

Dismantling Rooms

Before building Vinpearl Resort Nha Trang, his first hospitality project, nestled on a private beach by the South China Sea, Vuong visited the hotels in Phuket with a screwdriver stashed in his suitcase. He used the tool to dismantle hotel room fittings -- before reassembling them -- to understand how they were put together.

“He's very modest and down-to-earth,” said Le Thi Thu Thuy, chief executive of Vingroup and a former Lehman Brothers Holdings Inc. investment banker. “He always tells management to continue learning every day, that you can't be happy, content with what you already have.”

Limited Affordability

The size of Vuong's target customers is unclear. VietNam's urban population is growing 3.4 percent annually, according to the World Bank, with growth fastest in and around the two biggest cities, Ho Chi Minh City and Ha Noi. Only about 5 percent of the population in the two largest cities is able to afford homes currently being produced by large developers, according to the lender.

About 47 percent of households in Ha Noi and Ho Chi Minh City earn an average annual income of $7,425, according to property broker CBRE Group Inc.'s local unit, which said it would take 51 years to save enough money to buy a mid-end condominium that would cost $72,000.

The majority of real estate purchases in VietNam are still made without a mortgage. It would take the average household 242 years to save enough to buy a $342,000 luxury condominium, according to CBRE's local unit.

Home prices in Ho Chi Minh City surged almost threefold from 2004 to the first quarter of 2008, according to CBRE data. Values then fell as the government raised interest rates and restricted lending for real estate and other non-productive sectors, in a bid to tackle inflation.

The State Bank of VietNam has lowered its key refinance rate by 500 basis points since March to 10 percent, as annual inflation plunged back toward single digits from a high of 23 percent in August last year.

Sales Data

Vingroup sold 7,000 to 8,000 residential units at the end of 2010 and early 2011, Vuong said. The apartment units at the Vincom Center in Ho Chi Minh City, which also boasts a spa and fitness centre, were sold in 2010 at an average selling price of about $8,000 per square meter, a record in VietNam.

Vuong, who values discipline and rewards those who do well, upholds a slogan for employees: “Speed, creativity and efficiency in everything you do, in every action.”

The billionaire plays soccer and basketball every week with Vingroup employees at the company's sports centre, often trading his suit and tie for a company soccer team's red jersey and shorts. He plays the position of striker, whose job is to score goals.

Source: Bloomburg


HAGL - Sounds familiar?


Doan Nguyen Duc says he's sure he'll become the first ever Vietnamese dollar – billionaire next year.

The chairman of Hoang Anh Gia Lai Joint Stock Company (HAGL) has maintained his top position on the list of the ten richest Vietnamese citizens for the second year in a row, according to rankings by Thanh Nien newspaper.

The listings rate wealth based on current stock-holdings, of which Duc owns more than VND12.22 trillion (US$683.5 million) in HAGL.

Last year, he topped the chart with 97.77 million of the Gia Lai Province-based company's stocks worth a total of VND5.8 trillion ($325 million).

No surprise

With his usual confidence and short answers, Duc tells Thanh Nien via phone from a business trip in China that the ranking did not surprise him.

“I didn't feel anything special when I heard. I had predicted that. Only news can be surprising, right?”

The 47-year-old entrepreneur says he is proud of his wealth and fame and has no intention of concealing it.

“I think people deceive themselves when they're reluctant to talk about their riches. I have made money legally and everyone knows that. There is nothing to conceal when you work legally.”

That's not to say that Duc has not been followed by rumours of illegal business moves throughout his career.

Duc says his confidence is misconstrued as showing-off, which prompts his critics to spread rumours about him.

“Many people hate me and have spread a number of bad rumors but I'm not afraid,” he says. “I work legally and I am not afraid to tell the truth.”

Late last year, HAGL asked the State Bank of VietNam and the Ministry of Public Security to investigate rumours circulating about the company and its shareholders.

The inspections found the rumours untrue and Duc said experts always knew the company's financial status was clear and transparent, but that some members of the public had been influenced by the rumours because they didn't have access to official information.

One rumour last year said that the HAGL chairman had been banned from travelling abroad due to bank debts. However, the story turned out to be false as Duc had in fact made several trips abroad during the period.

Business, not pleasure

Asked about his travels around the world, on which he takes his own private jet, Duc says he doesn't live extravagantly.

“I have no time to go around for personal things,” he says. “HAGL has offices in several countries, so that's helpful.”

Duc says he never visits tourism spots or goes sightseeing on business trips. He virtually never relaxes.

He's been travelling for 20 years, but never for pleasure, even though he owns the first private aircraft in VietNam since 1975. He paid $7 million for a 12-seater Beechcraft King Air 300 bought from the US in May last year, including nearly $2 million for pilot training and other airport services.

Duc is proud to have his craft piloted by Nguyen Thanh Trung, who was an agent for the National Front for the Liberation of VietNam enlisted in the US-backed, Saigon-based air force toward the end of the VietNam War. Trung became famous when he used one of the regime's own aircraft to bomb its headquarters, then known as Independence Palace, on April 8, 1975.

Duc and Trung rarely have time to “enjoy” their travels, but Duc says he doesn't consider his busy schedule a sacrifice.

“It's not like I'm paying a heavy cost by not travelling for pleasure. Everyone has their own hobbies and happiness. I know I am working too much but it doesn't mean I am not pleased with my current life. My success at work and watching and playing football are my true joys.”

Jeans and a T-shirt

In faded old blue jeans and a plain pull-over T-shirt, Duc does not look like a business magnate.

But the US Consulate in Ho Chi Minh City found out the hard way that looks can be deceiving.

According to former US Consul Robert Silberstein, Duc was denied a visa to the US four years ago after the visa officer had said “he looked more like a worker than a boss.”

Duc shouted at the officer who had rejected him: “I'm chairman of a premier football club! I own a giant corporation with thousands of workers and hundreds of million dollars in revenue per year! How can you reject me?”

Two days later, the consulate called him a back and gave him a visa.

Up for the down stroke

Many international billionaires did not fare well through the global financial crisis, but Duc has made a lot more money than he's lost since the crisis began. His worth has nearly doubled after the crisis, increasing by about VND6.2 trillion ($347.4 million) since 2008.

However, Duc admits that the company had suffered the impacts of the crisis on other levels.

“Our growth did not meet previous targets due to the crisis. In other words, I could have been a dollar billionaire this year, instead of next year, if there hadn't been the economic crisis.”

Going international

Duc founded his company in 1993 on a small mill that made tables and chairs for schools in the Central Highlands Gia Lai Province. He's since grown the business into a multi-national mini -Vietnamese empire that includes construction materials, furniture making, real estate, property development and professional sports teams.

HAG owns the VietNam Premier Football Division's (V-League) football club Hoang Anh Gia Lai and opened the HAG – Arsenal JMG Football Academy in Gia Lai Province in 2007 under a cooperation agreement between the company and the English Premier League club Arsenal.

“Our target is to make HAGL an international brand and that's what we've been doing over the past three years,” Duc says.

“Ten years ago, I never would have thought I would one day be where I am today.”

Source: Thanh Nien Weekly