Hoa Binh's restructuring strategy and goal to reclaim leadership in Vietnam’s construction industry

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Amid the volatility in Vietnam's construction sector, Hoa Binh Construction Group has been implementing strategic steps to comprehensively restructure, aiming to reclaim its leading position. Dr. Jerry Nguyen (Nguyen Kinh Luan), chair of Group Restructuring Board, member of the Board of Directors, and deputy general director of Investment and International Business Development, spoke with VIR's Thanh Van about insights on the group's restructuring strategy, sustainable development direction, cultural identity, and plans to build a successor leadership team to propel Hoa Binh onto the global stage.

Hoa Binh targets growth after major restructuring

“Our goal is to restore our leading position in Vietnam’s construction industry in the near future while laying a solid foundation to expand into the international market,” emphasised Dr. Jerry Nguyen (Nguyen Kinh Luan), deputy general director of Investment and International Business Development at Hoa Binh Construction Group.

After a prolonged period of challenges in the construction industry and the broader economic context, Hòa Bình is undergoing a robust restructuring process. Could you elaborate on this strategy?

Dr. Jerry Nguyen: Restructuring is an essential step for Hòa Bình to adapt to the new context and reaffirm its position in the construction industry. We focus on four key pillars.

First, we are accelerating the adoption of advanced construction technologies, aligning with global standards, particularly in green technology and sustainable development.

Second, we are strengthening our supply chain, both domestically and internationally, to ensure efficiency and competitiveness.

Third, we are integrating artificial intelligence (AI) into core management areas, from project management to corporate governance, adhering to ESG (Environmental, Social, Governance) standards.

Fourth, to ensure stability and sustainable development, Hòa Bình has implemented a stringent financial strategy. For international markets, we only engage in projects with payment guarantees from investors to minimize financial risks. Domestically, the group is focused on recovering old and bad debts while tightening the evaluation process for investors’ financial capacity before undertaking projects. Simultaneously, Hòa Bình is refining its project management system and implementing an integrated risk management framework to reduce bad debts and enhance financial efficiency in the near future.

Hòa Bình is one of the few design-and-build general contractors in Vietnam that has invested over $100 million in construction equipment, enabling greater autonomy in project execution while ensuring progress and quality for investors. Our advanced centralized management system optimizes operational processes, enhances transparency, and synchronizes data across the entire system. This system not only effectively monitors domestic and international projects but also provides a solid foundation for maintaining a competitive edge and meeting international governance standards.

In the restructuring process, we are also focusing on consolidating the ecosystem of our new holdings, reviewing the operational efficiency of subsidiaries and affiliates, phasing out underperforming or misaligned entities, increasing capital, and expanding businesses with strong growth and performance. We are also developing a roadmap for listing eligible subsidiaries and affiliates.

Additionally, we are heavily investing in training our workforce and management teams to prepare for international projects that Hòa Bình is pursuing. This is a stepping stone to not only maintaining our domestic market presence but also expanding regionally and globally.

There have been notable changes in senior leadership, which have garnered significant media attention. How is Hòa Bình building its leadership team to ensure succession and sustainable development?

Dr. Jerry Nguyen: Human resources are the cornerstone of Hòa Bình’s development strategy. We are building a successor leadership team based on clear criteria: young, professional, passionate, confident, capable of independent thinking, ready to tackle challenges, accountable, and resilient under high-pressure environments.

Hòa Bình is not just a business but a cohesive collective bound by a distinctly Vietnamese cultural identity, imbued with humanity and compassion. Every employee carries the ambition to reach far, striving for the sustainable development of the enterprise and the community.

During recent challenging times, the Hòa Bình team has stood united, sharing hardships while maintaining unwavering confidence in restoring the group’s position. With solidarity and determination, our team is committed to implementing comprehensive restructuring to improve financial health and optimize organizational operations, paving the way for a brighter future.

In the restructuring process, refining the personnel structure is inevitable. Some individuals may not align with or adapt to the new strategy. This is a natural process of elimination, but I am confident that through this transformation, Hòa Bình will emerge stronger, with a leaner, more effective team ready to take the group further.

What are the biggest risks Hòa Bình might face during restructuring, and how is the group preparing to address them?

Dr. Jerry Nguyen: We have identified and prepared response plans for four main risk groups.

Financial risk is the top concern. Restructuring requires significant capital while revenues may be temporarily affected. We have established a contingency fund for operational costs and secured credit lines with major banks. Additionally, selling non-core assets will provide supplementary liquidity.

The second major challenge is personnel risk. Organizational changes may impact morale and productivity. We have implemented transparent internal communication programs, organized direct dialogues with employees, and introduced retraining support policies for affected positions.

Technological risk is also significant. Transitioning to smarter, AI-integrated management systems may encounter technical issues. We are adopting a phased implementation approach with detailed backup plans and a 24/7 technical team to address any disruptions.

Finally, external business environment risks, such as policy changes, material price fluctuations, or geopolitical instability, are addressed through an early warning system, market and supplier diversification, and flexible contingency plans for specific scenarios.

The construction industry is under significant pressure to meet sustainability and risk management requirements. How is Hòa Bình implementing ESG standards and green technology to meet these demands?

Dr. Jerry Nguyen: Green technology and sustainable development are not just trends but corporate responsibilities in today’s context. We are implementing energy-efficient construction solutions, using environmentally friendly materials, and optimizing processes to minimize environmental impact. Our project management system has been refined to meet ESG standards, ensuring transparency, social responsibility, and effective governance. AI integration helps us analyze project data, optimize costs, and enhance management efficiency. These are concrete steps to ensure Hòa Bình meets both domestic and international standards.

Quality has always been Hòa Bình’s top priority, which is why we have been recognized as a “National Brand” in Vietnam for nine consecutive times over 18 years. This accolade underscores our reputation and commitment to delivering the best value to customers and partners.

With these changes, what are your expectations for Hòa Bình’s future, especially as the private sector is being supported with policies to truly “rise up”?

Dr. Jerry Nguyen: Our goal is to reclaim leadership in Vietnam’s construction industry in the near future while laying a strong foundation for international expansion. Through restructuring, Hòa Bình will become a leaner, more modern, and highly competitive group. With a high-quality workforce, advanced technology, and a sustainable development focus, we are confident in reinforcing our brand not only in Vietnam but also on the global construction map.

Hòa Bình’s internationalization journey began in 2011 with our first project, Le Yuan Residence, in Kuala Lumpur, Malaysia, a breakthrough when Vietnam’s construction industry was primarily domestic-focused. Since then, we have expanded our presence to Myanmar, Kuwait, Canada, the U.S., Australia, Kenya, and Cambodia.

Over more than a decade of international operations, we have identified our core competitive advantages.

First, our ability to provide comprehensive solutions, from design and construction to project management, with international quality at more competitive costs than competitors from developed countries.

Second, our Vietnamese engineers and workers possess high skills, strong discipline, and quick adaptability. We have collaborated with over 20 multinational contractors from China, South Korea, Japan, France, Germany, the U.S., and Australia, gaining valuable experience and construction solutions that set us apart from other Vietnamese contractors.

Third, our experience working in diverse climates and our respect for local cultures help us build lasting relationships with clients and partners.

We are currently focusing on four major markets: the U.S., Australia, Asia, and the Middle East. Successfully exporting comprehensive construction services not only benefits Hòa Bình but also elevates the “Made in Vietnam” brand, driving the development of the entire supply chain, from material production and architectural design to finance and logistics, paving the way for other Vietnamese businesses.

As a final question, what message would you like to send to shareholders regarding Hòa Bình’s future?

Dr. Jerry Nguyen: I want to assure our shareholders and investors that Hòa Bình is on a strong recovery path. The challenges we faced have become valuable lessons, helping us build a more robust foundation.

Restructuring is not just about cost-cutting or operational optimization but a strategic investment in the future. We are building a new Hòa Bình, smarter, more sustainable, and globally competitive. I am confident that investors with a long-term vision will recognize Hòa Bình’s immense potential in the coming phase. We are committed to transparency in all activities, strict adherence to governance standards, and prioritizing shareholders’ interests.

Thank you for your insights!

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