Brand positioning through projects

Starting from a construction company under the Transport Industry Union, Phuong Thanh Transport Investment and Construction Joint Stock Company has made great strides in scale and capacity, making important contributions to the construction of key national transport projects. Continuing the "sweet fruits" achieved, Chairman of the Board of Directors Pham Van Khoi said that Phuong Thanh brand has been established and positioned through the works and projects it has participated in.

Chairman of the Board of Directors Pham Van Khoi.

The turning point from model transformation

- After nearly 20 years of development, how do you evaluate the turning point of Phuong Thanh Tranconsin at the time of starting to switch to a joint stock company model?

Phuong Thanh Tranconsin, formerly known as Transport Construction and Services Company, was established in November 1999 from the Vietnam Transport Trade Union with initial capital of almost zero.

The advantage at that time was that the company almost did not have to bid, and could participate in small projects under the form of designated bidding. The construction value was low, the company's annual revenue at this time was only under 100 billion VND with nearly 100 employees.

In 2004, implementing the policy of the Ministry of Transport and the Industry Union, the Company was converted into a joint stock company model.

Remember, at the end of 2003 and the beginning of 2004, the company's accumulated capital was only about 2 billion VND. After deducting the costs for equitization and issuing preferential shares to employees (about 600 million VND), the remaining capital of 1.6 billion VND was used as State capital for the enterprise to operate with the new model.

After 20 days of the Ministry of Transport's decision to convert the State-owned enterprise model into a joint stock company (June 3, 2004), on June 23, 2004, the Company successfully held its first shareholders' meeting. The total initial equity capital was only 7.5 billion VND (including 1.6 billion VND of State capital, the rest was capital mobilized from the company's staff, workers and other organizations and individuals).

Groping around with a new model, with limited capacity in terms of finance and equipment, businesses have not been able to access projects with large construction values ​​such as projects using Jica capital.

In the "storm", we can see that Phuong Thanh is on the right track, meaning we were right to choose to go with many legs, participating in projects using different capital flows.

Mr. Pham Van Khoi - Chairman of the Board of Directors and General Director of Phuong Thanh Tranconsin

However, fortunately, the equitization helped Phuong Thanh meet the requirements of being an enterprise with less than 50% State capital contribution to be eligible to participate in projects using WB capital. If at the time of being under the Industry Union, the value of the bidding package Phuong Thanh undertook was only around 30-50 billion VND, after equitization, we joined forces with a number of large units to bid and won the bid for projects/bidding packages with very large values ​​from 250 billion VND such as: Project to renovate and upgrade National Highway 37, Dinh Tram - Pho Huong section, project to renovate and upgrade National Highway 38B, Trang Bridge - Hai Duong section... in the years 2005-2006.

The large source of work from WB projects has helped the business grow rapidly in annual revenue value. From 100 billion, it gradually increased to 200, 300 billion VND in the following years.

- At the time Phuong Thanh transformed its model, most of the transport infrastructure projects were still undertaken by state-owned transport construction corporations. How did Phuong Thanh Tranconsin find a way to survive?

After the historic turning point of accessing WB projects, in 2007, opportunities continued to come to contractors when ADB bank resources for lending to Vietnam to develop transportation projects, especially expressway projects and coastal belt roads, were relatively abundant.

Unfortunately, projects using ADB capital do not allow state-owned enterprises to participate.

Not letting this precious opportunity slip away, the company boldly proposed to the Industry Union to divest from State capital and received approval from the superior management agency. About 1.6 billion VND of State capital contribution was bought back by Phuong Thanh staff and employees.

Since then, Phuong Thanh has continued to participate in many large projects. From the first expressway project to participate in construction, Cau Gie - Ninh Binh , in 2014-2015, the company continued to participate in package 7 of the Ho Chi Minh City - Long Thanh - Dau Giay project; the Southwest coastal corridor project (package CW7.3 worth 550 billion VND); package CW2C of the Cao Lanh - Vam Cong project worth more than 1,000 billion VND.

The Noi Bai - Lao Cai Expressway Project was implemented, Phuong Thanh Tranconsin joined the project as a subcontractor for a number of foreign enterprises. However, during the project implementation, affirming its reputation through progress and quality of work, Phuong Thanh continued to be assigned larger amounts of work by large contractors. Noi Bai - Lao Cai is the project that brought Phuong Thanh contracts worth up to 500 billion VND and achieved a revenue of 1,000 billion VND when the project ended.

This is an important stepping stone for Phuong Thanh brand to increase its competitiveness in bidding for major transportation projects.

Setting records on key projects

- Looking back on the journey of more than 20 years of construction and development, what do you think is the biggest breakthrough that Phuong Thanh Transport Investment and Construction Joint Stock Company has achieved?

To talk about Phuong Thanh's breakthrough and growth, numbers are probably the most objective proof.

If at the time it was a state-owned enterprise, the company's highest annual revenue was less than 100 billion VND, then by 2014 - the 10th anniversary of equitization, Phuong Thanh's revenue reached 1,000 billion VND. In 2022, it will reach 2,000 billion VND in revenue and the target for the coming years is from 3,000 to 5,000 billion VND.

Ha Long - Van Don Expressway.

Over the past 20 years, with the relentless efforts of accumulation, from a contractor with limited bridge construction capacity, Phuong Thanh has gradually mastered advanced technologies in the world, participating in the construction of large-scale bridge projects with high technical requirements such as: Bach Dang Bridge - the largest bridge in the country and ranked 3rd among the 7 cable-stayed bridges with the most spans in the world; Ben Rung Bridge with permanent structure, including 4 modern Extradosed spans...

We have an advantage over many other transportation companies in that we have built and positioned our brand in the market. That positioning is based on the progress and quality of the projects we have undertaken.

Mr. Pham Van Khoi - Chairman of the Board of Directors and General Director of Phuong Thanh Tranconsin

In road projects, Phuong Thanh has owned its own records such as: Record with the highest MSE retaining wall in Vietnam (16m) in Noi Bai - Lao Cai project and the longest in Da Nang - Quang Ngai project (600-700m long)...

Besides major traffic projects, Phuong Thanh also left its mark on projects through historical sites, such as the project to upgrade National Highway 37 through Lung Lo Pass; Upgrading National Highway 6 through Pha Din Pass, National Highway 1 through Bong Lau Pass, Khe Pass, Ro Tuong Pass...

These are also widespread projects located in remote areas such as Pac Ma and Nam Khao bridges - the largest bridges across the Da River, on the highest upstream. To build them, Phuong Thanh workers have made efforts and persevered, overcoming roads that were once up to 60 kilometers long, bringing in machinery and materials for construction.

Regarding construction solutions, Phuong Thanh also confidently affirms that it has mastered all weak ground treatment technologies such as: wicks, sand wells, cement reinforced piles, vacuum suction...

With the momentum from construction experience and accumulated financial resources, in 2014, Phuong Thanh Transport Investment and Construction Joint Stock Company officially became a major member, playing an important role in the investor consortium of a series of large projects implemented under the form of BOT contracts such as: Project to renovate and upgrade Phap Van - Cau Gie expressway, Bach Dang bridge, Ha Long - Van Don expressway.

Escape difficulties with the "stepping on many legs" strategy

- Although it was so favorable, but if talking about the most difficult time of Phuong Thanh Tranconsin, which period do you remember the most?

That was in 2011, Phuong Thanh won nearly 10 projects, of which 6 projects had to be suspended during the implementation of Resolution 11 of the Government on key solutions focusing on curbing inflation, stabilizing the macro economy, and ensuring social security in the context of economic recession. In some projects, the company had to pay back the investors for prepaid equipment, while bank loans were limited or interest rates were very high, sometimes up to 22-24%/year.

Noi Bai - Lao Cai Expressway.

The difficulty was extreme. Fortunately, at that time, participating in ODA projects was a "salvation" for businesses.

In the "storm", we can see that Phuong Thanh is on the right track, meaning that we were right in choosing to go with many legs, participating in projects using different capital flows, not only focusing on public investment projects but also expanding and actively participating in projects using foreign capital to have mutual support when necessary.

By 2018, the State capital for transport projects was limited, the company planned to continue investing in some projects under the PPP form, but because some previous BOT projects did not meet expectations, credit institutions lost confidence and narrowed the door for businesses to access loans. The company continued to face a shortage of work volume and jobs for workers, when it had to abandon its journey with new BOT projects.

Continuing the journey from the end of 2020 until now, Phuong Thanh has been selected to participate in many component projects on the North-South expressway in the East, but, similar to many other contractors, the unit had to go through the pandemic and the "price storm" of materials. However, more steadfast than before, with the accumulated resources, the company is still confident in overcoming to bring the project to the finish line on schedule as required by the Government and the Ministry of Transport.

5 pillars to ensure competitiveness

- Continuing this term, in the remaining 6 years, investment capital for transport infrastructure is still very large. What do you think about Phuong Thanh's opportunities in the coming time?

First of all, it must be affirmed that with the infrastructure breakthrough goal set by the 13th Party Congress, plus 5 specialized transport planning approved by the Prime Minister, including specific investment roadmaps for road, railway, waterway, maritime, and aviation projects, the opportunities for Vietnamese transport enterprises in general and Phuong Thanh Company in particular are huge.

Seeing the opportunities and potentials in the renovation period, Phuong Thanh Tranconsin still determines its main business to be the construction of traffic works. From simple bridge and road construction, the company will now study and expand the construction market with many other types of works such as: High-speed railways, airports, ports, etc.

Vinh An Bridge across Ma River, part of the North-South Expressway project, Mai Son - National Highway 45 section, was constructed by contractor Phuong Thanh Tranconsin on schedule.

- The opportunities are huge, but with the current proliferation of private contractors, competition in the field of investment in transport infrastructure construction is also fierce. So what are the strengths that make Phuong Thanh Tranconsin confident in entering key projects?

The first issue to mention is that we have an advantage over many other transportation companies when we have built and positioned our brand in the market. That positioning is based on the progress and quality of the projects we have undertaken.

Second, regarding highway infrastructure, it can be said that, up to now, Phuong Thanh is still one of the contractors that has constructed the most highways in Vietnam (about 180km). All high-tech projects, including cable-stayed bridges, the company has participated in implementing, which is a great competitive advantage.

Third, with a long history of implementing a variety of projects, Phuong Thanh Transport Investment and Construction Joint Stock Company possesses a team of experienced staff and engineers who can participate in projects with large volumes of work and withstand high pressure.

Fourth, the company regularly and continuously invests in and purchases many high-tech machines and equipment such as airport concrete paving machines worth several million dollars, hundreds of meters deep drilling machines for bridge construction, etc., to meet all the largest projects in the transportation industry.

Fifth is financial resources, every year, Phuong Thanh accumulates to reinvest resources. As mentioned before, if more than 20 years ago, Phuong Thanh was just a business with a very small capital scale (7.5 billion VND), now, this number has reached 1,500 billion VND. This is the strength, the foundation for Phuong Thanh to be able to cope with many unforeseen situations that may occur during the project implementation process.

From simple bridge and road construction, the company will now research and expand the construction market to many other types of projects such as: high-speed railways, airports, and ports.

Mr. Pham Van Khoi - Chairman of the Board of Directors and General Director of Phuong Thanh Tranconsin

Constantly improving internal strength and "fighting power" in the market, with annual profits, after deducting a certain amount to pay dividends to investors, the rest is reserved by Phuong Thanh for investment in developing machinery and equipment, improving income and living standards of staff and employees.

- Phuong Thanh's resources are not only used to invest in the construction of large projects but also to be an investor with the State to build large projects. What is Phuong Thanh's target market, sir?

Phuong Thanh's orientation is to continue to accumulate resources so that when the PPP Law is completed, BOT projects will be viewed with more sympathy by society. The company will cooperate with credit institutions and other investors to research and enter new PPP projects with feasible financial plans. This is a solution that both creates jobs for staff, engineers, and workers, and helps businesses have a long-term source of income.

Focus on strengths to go steadily

- You mentioned that Phuong Thanh always goes with many legs, not one leg, with available resources, does the company aim at other fields to continue creating mutual resources for the core business of investing and constructing traffic infrastructure?

Phuong Thanh will research and invest in other fields when the company no longer has many opportunities in the Transportation industry. While there are still opportunities in the Transportation industry, the company will still focus on using its strengths in investing in infrastructure construction to make steady progress.

- As someone who has been involved in the transportation industry for a long time, what is your biggest concern right now?

After nearly 35 years working in the transport industry, I think the transport industry still has many opportunities for development as the construction of expressways, high-speed railways, airports and ports is only in the initial acceleration stage.

However, in recent times, some mechanisms have not really created favorable conditions for transport enterprises such as: Unit prices are not suitable for investment practices, localities have announced unit prices of supplies and materials that are not close to reality, affecting the resources of contractors...

Furthermore, although the transport sector is a very hard-working and low-income sector, it is not really respected and appreciated by society, and the number of people working in the transport sector is gradually fading away. Faced with this reality, transport enterprises hope that the mechanisms and legal regulations in construction investment will be increasingly researched and perfected, and that policies to attract human resources to the transport sector will be increasingly improved so that contractors can accelerate and have enough high-quality human resources to meet the needs of developing and modernizing the country's transport infrastructure.

Thank you!

Source: https://www.baogiaothong.vn/dinh-vi-thuong-hieu-bang-chinh-cac-du-an-19223101012102657.htm