Metalworking companies have a tough time in the Vietnamese market. HAWEE and HISA show how to succeed against the odds.
For Trinh Van Ha, success is a matter of commitment, and he means that personally: “When things get tough, I’m on site at all times to handle problems,” he declares. And where has this strategy gotten him? To the very top of his own company HAWEE, with over 1,500 employees one of Vietnam’s largest mechanical and electrical contractors. Here he sits today on the sixth floor of the company’s headquarters in the capital city of Hanoi.
Down below, mopeds race through the intersection. The loudest horn has right of way. Up here all is tranquil; no street noise can be heard. But entrepreneur Ha is no stranger to turbulent times. The crisis has hit him hard twice already, in 2008 and 2011. HAWEE has nonetheless prevailed — Ha demonstrated courage. “We continued to invest extensively in research and development even in the downturn. We can only survive economically difficult periods if we have excellent products,” he says.
On course for growth
It has not been easy. The economic crisis hit the company just as it was searching for new lines of business in a complex market. Ha chose a bold course and identified new potential on the basis of market analyses. He found that more and more often he needed special components for his orders. “Instead of outsourcing our production, we decided to invest in our own machines and expand our business in that way.”
New company, modern machines
So in May 2011, he opened a second company in Tu Son Town, 16 kilometers from Hanoi, and ordered a punching machine, two press brakes and guillotine shears — all from TRUMPF. “The machines are reliable, and this is the only way we can make first-class products. We were also convinced by the service, maintenance and software. On the basis of these machines, we have built an efficient production operation.” Among other things, for making cable ducts and switchboards.
When Ha founded HAWEE together with his wife in 2004, making his own products was the farthest thing from his mind. The company started as just a sales agency for drinking-water pipes. “In mid-2006, I recognized the potential that mechanical and electrical construction offered. We started with pipe installations for private and industrial buildings.” Today, HAWEE performs all of the work in this segment for large-scale construction projects.
Made in Vietnam
“We produce locally; that’s a major advantage,” Ha believes. “By doing so, we enable our customers to save the high import duties and deliver top quality at a reasonable price.” Dedicated management, modern machines and satisfied, qualified employees form the basis. Ha provides ongoing education for engineers and programmers in individual training seminars and short courses. “And then they learn from each other,” Ha says.
He means to continue acting as a “true partner” for his employees and customers — even though there are still some obstacles to overcome. With inflation running at close to 20 percent, even minor purchases are significant. “If we need a bank loan from commercial banks for implementing projects or new investments, the lending interest rates are 22 to 25 percent per annum. We have to obtain profits high enough to cover such high costs for capital,” he reports. But Ha remains optimistic. The economy is growing — the Asian Development Bank expects gross domestic product to increase by 7 percent in the medium term. However, analysts from the government agency “Germany Trade & Invest” do not expect Vietnam to reach its official goal of attaining the status of an industrial nation by 2020.
Things will keep going up: with elevators
In spite of this prospect, To Van Nghiep is certain that things will keep going up — literally. Since he went into business for himself in July 2002 by founding HISA in Ho Chi Minh City in the country’s south, he has become a major elevator manufacturer. “In the beginning we had to contract for parts externally and built one elevator per month,” he recalls. Then he acquired his own machines — and things have been looking up ever since. “Today, we produce 100 elevators a month with 150 employees,” he declares with pride.
HISA sells 60 percent of its elevators in the private sector, with the rest going, for instance, to construction firms for hotels and office buildings mainly in the domestic market. The neighboring countries of Laos and Cambodia are to follow soon — because HISA is expanding. “We’re currently building a new production facility. With this plant, we plan to increase our production to 500 elevators per month,” Nghiep explains.
“Appreciate your employees”
Asked about his competitive advantage, the entrepreneur replies, “Modern machines! This is the only way we can deliver high technology in the desired quality. That’s a major challenge in Vietnam.” To meet this objective, his factory already boasts a TruLaser 1030, a TruBend 5130 and a TruMatic 500 R. His visit to TRUMPF in Grüsch, Switzerland, in October 2011 made him quite sure of his choice.
“But of course, employees also drive a dependable and successful company,” Managing Director Nghiep emphasizes. He motivates them with attractive terms of employment and bonus payments. “Appreciate your employees” is his motto. And in Vietnam this philosophy is decisive. Companies have a high fluctuation — if the competition pays better, employees change jobs rapidly. Nghiep is building on professional training. “We can only produce high-quality products and continue to improve our processes if the employees can operate our machines correctly,” he observes.
Keep up with the market
With this strategy, he is striving to keep up with a growing market. “Buildings are becoming taller and taller and our elevators need to be up to the job. We have to respond to greater passenger numbers with more spacious cabins and faster elevator technology,” Nghiep explains, and emphasizes that design must not be neglected either. So HISA is not going to run out of work any time soon. The demand is there and will continue to grow. Nghiep is ready — his new production facility will soon be up and running.
Contact us: MastersofSheetMetal@trumpf.com
This article was first published in spring 2012.