We must act instead of hibernating.

Mr. Dang Thanh Tam, Chairman of the Board of Directors of Kinh Bac Urban Development Corporation: We must act instead of "hibernating".

"A large flow of investment is heading towards Vietnam," said businessman Dang Thanh Tam, born in the year of the Dragon, sharing his expectations for 2024, a year he anticipates will bring more investment and business opportunities, but also demand significant changes from businesses.

Mr. Dang Thanh Tam, Chairman of the Board of Directors of Kinh Bac Urban Development Corporation

To this day, 2023 still seems far from over in the calculations of Mr. Dang Thanh Tam and many other businesspeople. The Russia-Ukraine conflict has become more intense and costly, and a serious armed conflict has arisen between Israel and Hamas forces. The world is further shaken, placing the business community before many risks and uncertainties.

In this context, Mr. Tam believes that Vietnam has certain favorable factors. In particular, the US-China trade tensions have led to a wave of investment shifting from China to other countries, including Vietnam, to avoid the risk of goods exported to the US being subject to high tariffs.

"This helps foreign investment in Vietnam maintain a certain pace," Mr. Tam confidently stated. However, he also acknowledged that only a few businesses will benefit, while many others will face difficulties, especially those investing in residential real estate. Kinh Bac Urban Development Corporation is present in all these situations.

It can be said that Kinh Bac is among the businesses that benefited, having successfully weathered the storm this past year. Although Mr. Tam clearly acknowledged that it was not easy, the company achieved these results thanks to a fairly comprehensive plan that anticipated various scenarios.

Whether optimistic or pessimistic, businesses must develop very specific policy directions and strategies. This is crucial so that when difficulties arise, businesses can proactively adjust to minimize losses.

In 2023, Mr. Tam agreed with the Kinh Bac leadership to arrange financial resources to repay the corporate bond debt ahead of schedule, even though this loan had a very solid cash flow plan. By June 22, 2023, Kinh Bac had repaid all 3,900 billion VND of corporate bond debt.

In fact, when investors have confidence in a business, they will not hesitate to invest. In Kinh Bac's early bond buyback program, about half of the bondholders did not sell their bonds early because they believed in the company and wanted to wait until the maturity date to receive the full interest. Therefore, Kinh Bac also incurred a financial cost loss, as it had already set aside funds from the low-interest rate to cover the costs.

After developing the plan, the next step is to determine how to implement it (including securing adequate human resources and sound financial resources) and decisively execute the proposed action plan.

He also didn't hide his view that action is necessary instead of hibernation. In fact, many businesses choose to weather the storm by doing nothing. They believe that doing nothing is better than undertaking something uncertain.

"This might protect businesses from losses, but from a social perspective, it causes significant damage. Businesses don't create jobs, not to mention causing many workers to become unemployed, they don't produce social products, and especially, when favorable conditions arise, there isn't the manpower or ready-made solutions to seize them," Mr. Tam shared his opinion.

Of course, actions also need to adapt to the changing business environment. Some businesses choose to diversify their business, such as shifting from building luxury housing to building low-income housing to meet the real housing needs of the people, especially near industrial zones.

"This is also the activity we aim for, which is building social housing, housing for workers, and housing for low-income earners," shared businessman Dang Thanh Tam, born in the Year of the Dragon.

Mr. Tam explained that the integrated industrial park-urban area model has been implemented in many developed countries around the world such as the US, Germany, Japan... In the ASEAN region, countries like Singapore and Malaysia have also been developing industrial park-urban area ecosystems with a high concentration of resources, technology, and production capacity.

We must develop a specific defense strategy. Based on that, we will make flexible decisions and closely monitor developments in politics , society, and the economy.

- Businessman Dang Thanh Tam

In Vietnam, Kinh Bac is one of the leading companies in building integrated industrial park and urban area infrastructure models. To date, the corporation has built 4,000 social housing units, achieving a rate of 7% of the national social housing stock (approximately 62,700 units).

Notably, the Bau Tram Lakeside Green Urban Area Project, developed in conjunction with the Lien Chieu Industrial Park (Da Nang), covers a total area of 46 hectares and includes 10 high-rise apartment buildings with 3,358 units. Similarly, the Evergreen Bac Giang social housing complex, developed alongside the Quang Chau Industrial Park, offers 3,334 social housing units, expected to meet the housing needs of approximately 12,000 workers.

The social housing project, part of the Trang Due Workers' Housing and Commercial Service Urban Area, is being developed in conjunction with the Trang Due Industrial Park. Construction began in the second quarter of 2023 and includes 2,538 social housing units to serve over 50,000 workers in the industrial park.

In reality, building an industrial park-urban ecosystem not only aligns with the national orientation for social housing development, ensuring stable housing and employment for workers, but also solves the problem of maintaining a stable workforce in industrial parks. This creates a highly competitive and dynamic investment environment, especially in cases of force majeure such as natural disasters and epidemics, ensuring workers have housing and preventing production disruptions for businesses.

In the story, Mr. Tam hardly mentions the difficulties and obstacles that Kinh Bac had to overcome when implementing social housing projects. However, in conversations with other investors and businesses in the real estate sector, it is clear that when choosing to build social housing, businesses need to have a very strong sense of commitment.

A unique characteristic of social housing projects implemented by Kinh Bac is that they are part of commercial housing projects, not independent social housing projects, and therefore do not allocate 20% of the land for commercial use. Consequently, with the same investment capital, project scale, and housing quality, Kinh Bac's social housing projects have higher selling, rental, and lease-to-own prices compared to other independent social housing projects.

This leaves the investor with very little profit, which, as revealed by Mr. Dang Thanh Tam, is less than 1 million VND/m2. However, with a commitment to doing the best possible job, Kinh Bac remains determined to overcome many difficulties to make large investments in social housing.

Assessing the year 2024, Mr. Tam remarked, "We shouldn't be overly optimistic." "We must develop a specific defense strategy. Based on that, we will make flexible decisions and need to closely monitor developments in politics, society, and the economy," Mr. Tam said.

In particular, he continued to emphasize Vietnam's position on the international stage, thereby creating opportunities for Vietnamese businesses. Specifically, significant opportunities will arise from the elevation of relations between Vietnam and the United States and Japan to the highest level. Vietnamese businesses and goods can experience strong export growth to the world's largest markets. The United States has also committed to helping Vietnam develop its semiconductor industry and better protect the environment.

"In this context, we hope that there will be a large influx of investment from the US into Vietnam, especially financial investment, as the US is the world's largest capital market. This will make the stock market more vibrant, facilitating cheaper capital mobilization, thereby improving production and business activities," Mr. Tam shared his assessment.

In particular, he also addressed a major challenge facing the current economy. Despite having the world's second-largest reserves of rare earth elements, Vietnam lacks the technology for deep processing. To avoid falling behind in attracting semiconductor and chip manufacturing, Vietnam needs policies and training programs to develop human resources in this field.

For Kinh Bac specifically, the company continues to build infrastructure and create land reserves ready to welcome further investment in factories, especially high-tech factories such as semiconductor and chip manufacturing. Mr. Tam also shared details about plans to install solar panels on factory roofs to provide an additional 20% of clean energy, increasing the proportion of clean energy used in products manufactured in Kinh Bac's industrial park.

"We want to create the most favorable conditions for exporting goods to the European and American markets, taking advantage of the great opportunities that are opening up," Mr. Tam said.

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