The rise of the "empire" Nguyen Ba Duong - a tycoon with no bank debt

(Dan Tri) - 7 companies in the ecosystem founded by Mr. Nguyen Ba Duong have taken new steps. Mr. Duong, the former Chairman of Coteccons, the "tycoon" of the construction industry, is confident that projects will come to him.

Unforgettable moments late at night on October 5, 2020: An "empire" disintegrated

At around 9:00 p.m. on October 5, 2020, Coteccons Construction Joint Stock Company (stock code: CTD) announced that Mr. Nguyen Ba Duong, Chairman of the Board of Directors, resigned due to personal reasons. His replacement is Mr. Bolat Duisenov, Member of the Board of Directors of Coteccons and General Director of Kusto Vietnam.

Mr. Duong's decision was not simply a change in leadership for Coteccons - the number 1 enterprise in the construction industry at that time. It was also an event that contributed to marking the official dissolution of the "empire" Coteccons Group.

Mr. Nguyen Ba Duong was born in 1959 in Nam Dinh, worked for 5 years at the Ministry of Construction and 12 years at Light Industry Company No. 2 (Descon) before switching to work for Coteccons in 2002. Coteccons, from a state-owned enterprise equitized, became a general design and construction (D&B) contractor, operating from North to South.

In an interview with the press, Mr. Duong affirmed that it only took 2 years for Coteccons to rise to the top in Ho Chi Minh City. He is confident in his own reputation. "Foreign consulting companies see me, trust me and assign work. Suppliers trust me and can lend me money." Mr. Duong believes that making customers remember him is a form of "good wine naturally smells good". Thanks to that, projects come to Coteccons, not businesses themselves.

Mr. Duong also believes that the D&B model will help businesses save at least 10% of investment costs, 30% of construction time, and Coteccons can increase profit margins. Therefore, Mr. Duong built the Coteccons Group ecosystem, including Coteccons and many supporting businesses such as Unicons, Ricons, FDC (Newtecons), BM Windows, Boho Décor, Dcons, SOL E&C...

Coteccons and the companies in the ecosystem then became famous in the construction market, when they won bids for a series of large projects such as Nam Hoi An Casino, Times City Park Hill, Vinhomes Central Park, Masteri Thao Dien... Notably, Coteccons Group also surpassed 2 Korean contractors to become the general contractor of the tallest building in Vietnam - Landmark 81 and the 10th tallest in the world. With this achievement, the company is on the list of very few contractors in the world capable of implementing super high-rise projects.

Under Mr. Nguyen Ba Duong, Coteccons is associated with the two words "lightning speed" in meeting construction progress. VinFast complex (335ha) set a world record for progress with 21 months, Nam Hoi An Casino (1,000ha) also took only 19 months...

During many years of leading the business, Mr. Nguyen Ba Duong always maintained the principle of not borrowing from banks.

In 2012, the real estate "bubble" pushed construction companies into difficulties. To have cash flow, Coteccons' board of directors sold 24.7% of shares to Kusto Group at VND50,000/share, with a total transaction value of VND525 billion (equivalent to USD25 million). With this investment, Coteccons escaped the crisis, had an advantage in bidding for projects, and did not even need a 30% advance payment from the investor when participating in bidding as usual.

However, conflicts arose between the foreign shareholder group and the Coteccons board of directors, which peaked in 2020, related to allegations of conflicts of interest between companies in the Coteccons Group, including Ricons. Chairman of the Board of Directors Nguyen Ba Duong and General Director Nguyen Sy Cong were asked to resign.

That eventually became true at the end of 2020. Mr. Bolat Duisenov, General Director of Kusto Vietnam, became Chairman of Coteccons from then until now. Ricons also declared to operate independently, no longer in the Coteccons Group ecosystem.

3 years of silence

Since leaving Coteccons, Mr. Nguyen Ba Duong has not appeared in person to answer the media. However, his name is still a source of public attention every time it appears in the news of companies in the ecosystem.

In early 2021, a few months after leaving Coteccons, Mr. Duong reappeared at the ceremony to announce the production and business plans of two construction enterprises: Newtecons Construction Investment Joint Stock Company (formerly FDC Construction) and SOL E&C Materials and Solutions Joint Stock Company.

In mid-2022, he also appeared at the event where Newtecons changed its governance model according to international practices. Mr. Duong, along with former Coteccons leaders Mr. Tran Kim Long and Mr. Nguyen Sy Cong, presented the decision to appoint Mr. Vo Thanh Liem as General Director of Newtecons from June 2022.

At the end of 2022 - beginning of 2023, Mr. Duong also appeared at the summary ceremony and 2023 business plan of SOL E&C, Newteccons.

Mr. Nguyen Ba Duong appeared as the founding Chairman of SOL E&C at the company's 2022 year-end event (Photo: SOL E&C).

Recently, Mr. Nguyen Ba Duong sent a letter to the staff in the ecosystem on the occasion of the traditional day (August 3). He appeared in the role of Founding Chairman, sending a letter to 7 companies: Ricons, Newtecons, Sol E&C, BM Windows, Boho Decor, Design & Build Vietnam and Areus Atelier.

In the letter, Mr. Duong wrote: "Over the years, we have always maintained the business philosophy from the early days of establishment: Not winning bids at all costs, making promises - keeping them, always being sincere and putting the interests of partners first. Therefore, although the construction industry is still facing many difficulties, the ecosystem is still operating effectively and always moving forward..."

He also confided: "Be dedicated and passionate about your work because even though I am old, I still feel happy when I go to work every day. If everyone is always aware of their role and responsibility to the collective, the ecosystem will certainly grow stronger and stronger."

Mr. Duong’s letter appeared in the context of companies in the ecosystem continuously reaping many achievements in recent times. The most notable thing is that the companies won many large contracts that businesses in the industry dreamed of, in the context of the construction industry facing many difficulties.

Ricons participated in a consortium of 6 companies that won the VND9,000 billion bid for the construction and installation of equipment for Tan Son Nhat T3 passenger terminal. Newtecons and SOL E&C in the Vietur consortium directly competed with the Hoa Lu consortium (with Coteccons participating) that won the VND35,000 billion bid for the construction of Long Thanh airport terminal, phase 1.

Not only constructing domestic projects, companies in Mr. Nguyen Ba Duong's ecosystem also expanded abroad. BM Windows won the bid to supply facades for the billion-dollar tower in Canada called The One (91 floors high, over 328m) or supply facades for the General Department of Taxation Building - Cambodia, worth nearly 4 million USD.

BM Windows provides aluminum and glass facade solutions for projects, owning two large-capacity aluminum and glass facade factories in Hanoi and Binh Duong. This company has carried out exterior construction of many iconic projects, such as IFC One Saigon (formerly known as Saigon One Tower), The Metropole Thu Thiem or Fairmont Hotel Hanoi...

Ecosystem and the story of the long road

The business results of companies in Mr. Nguyen Ba Duong's ecosystem also announced "impressive" numbers.

In 2022, Newtecons, Ricons, BM Windows, Boho Décor, DB announced to achieve revenue of more than 1 billion USD, despite difficulties. Of which, Newtecons surpassed the 10,000 billion VND revenue mark and set a growth target of 10% in 2023. Ricons also reached a revenue of 11,384 billion VND, the highest in its history. SOL E&C's revenue was nearly 4,500 billion VND, 3 times higher than last year.

These numbers are not small compared to the revenue of VND 14,537 billion of Coteccons or VND 14,154 billion of Hoa Binh Construction Group - the 2 enterprises No. 1 and 2 in the top 10 largest construction contractors in Vietnam in 2023.

Newtecons was established in 2003, specializing in construction, starting with small and medium-sized projects. 2016 marked an important turning point for Newtecons when, together with Coteccons, they participated in many large projects such as Masteri Thao Dien CT5, Vinhomes Thang Long, D'.Capitale, Vinhomes Golden River...

In particular, the company and Coteccons constructed the core of the elevator of the tallest building in Vietnam - The Landmark 81; and constructed Nam Hoi An Casino - the project with the largest investment capital in Quang Nam province.

Recently, Newtecons has "replaced" Coteccons as the main contractor in many projects with prime locations such as the Masterise Homes luxury apartment complex (frontage of Nguyen Huu Canh, District 1, Ho Chi Minh City), Masteri Waterfront (Hanoi). The company also won bids for projects of investors such as T&T, Nam Long, An Gia...

Newteccons is the contractor for several luxury projects in prominent locations in Ho Chi Minh City (Photo: Khong Chiem).

As for Ricons, after leaving the Coteccons Group ecosystem, it has developed many different business segments: construction, real estate investment and development, office and factory leasing in industrial parks, and selling water heaters.

Established in 2004, Ricons has completed 150 large and small projects and is currently implementing about 45 new projects. The current Chairman of Ricons is Mr. Nguyen Sy Cong, Mr. Nguyen Ba Duong's right-hand man when he was working at Coteccons. The General Director is Mr. Tran Quang Quan, who used to be Deputy General Director of Coteccons.

Despite revenue growth, due to the general difficulties of the industry, Ricons' gross profit margin in the period of 2021-2022 has decreased. In 2022, this figure was 1.8%, the lowest in the past 5 years and lower than Coteccons (3.3%). The company explained that the reason was the competitive pressure in bidding prices as well as the impact of the prolonged project progress on the investor's cash flow difficulties.

Difficulties in the construction industry still exist along with the difficulties of the real estate market. However, public investment projects are considered a new direction for construction companies, helping to solve the problem of employment and cash flow for businesses. Exporting construction abroad is also mentioned, in the situation of housing construction in the country is too crowded.

Some businesses in Mr. Nguyen Ba Duong's ecosystem are following those two trends. With the VND35,000 billion bid package participated by Newtecons and SOL E&C, VietCap Securities Company (VCSC) assessed that the volume of forward orders (backlog) is quite attractive, equivalent to 126% of the total value of new annual contracts signed by Coteccons and Hoa Binh Construction in 3 years (2019-2022). The estimated maximum total profit for a contractor participating in this bid package is about VND525 billion, recorded in about 3-3.5 years.

It would be easy to judge that Mr. Nguyen Ba Duong's ecosystem has developed brilliantly if we only look at the past 3 years. There is still a long way to go, everything is uncertain. However, a 64-year-old "boss" still feels "happy" every day when going to work, with the spirit of "devotion and passion for work", anything can happen. Who knows, a new order in the construction industry will be redrawn...