Schneider Electric relishes EU-Vietnam FTA challenges

February 15, 2016 | 17:03
The upcoming EU–Vietnam Free Trade Agreement is hoped to bring fresh opportunities to European firms in Vietnam. Xavier Denoly, country president of Schneider Electric Vietnam, Cambodia and Myanmar, talked with VIR’s Nam Phuong about the firm’s investment plans to capitalise on this historic trade deal.

schneider electric relishes eu vietnam fta challenges
Xavier Denoly received the Prime Minister’s Certificate of Merit for his company’s performance
in the field of energy and social work

Can you shed the light on some of Schneider Electric Vietnam’s achievements in 2015?

2015 has been a memorable year for us, as we recorded a double-digit growth in all our businesses and became the top growing Schneider Electric entity in the entire region. This is particularly significant because, as you might have seen in the news, the world has gone through a volatile 2015 and a dark sentiment pervaded the majority of the globe due to a long list of bad news. This global gloom makes Schneider Electric even prouder of what our office in Vietnam has achieved in 2015. In August 2015, we received the investment certificate for our new 26,000-square metre manufacturing facility in Saigon Hi-Tech Park, which will hopefully be completed by the end of 2016.

A few weeks ago, Schneider Electric Vietnam received the third-class Labour Order granted by State President of Vietnam. What does this accolade mean to the company?

It is a great honour and we feel privileged to receive such a prestigious award. The Labour Order shows the Vietnamese government’s acknowledgement to Schneider Electric Vietnam’s performance and contribution to the local socio-economic development in more than 20 years since we established our first office in the country in 1994. Wherever Schneider Electric makes an investment, it is a long term commitment, thus recognition like this is truly meaningful for us.

I would like to attribute this success to our 1,000 employees at Schneider Electric Vietnam, who have worked so hard and contributed their energy, knowledge, and passion to the development of the company and to the satisfaction of local customers.

schneider electric relishes eu vietnam fta challenges

What plans do you have for 2016 and the next five years?

We have high hopes for the upcoming Saigon Hi-Tech Park factory, which will be one of our main manufacturing bases for the whole region. We will bring the latest energy efficiency technologies to this factory, make sure of LEAN manufacturing process and enable a much larger production capacity.

The Vietnamese market has a huge potential for growth, and we are really excited about bringing our long-term plans to fruition. To be specific, we can see that Vietnamese people are becoming increasingly inter-connected, via a multitude of smart devices wirelessly linked to each other. The overwhelmingly young population is now tech-savvy and is in need of 24/7 connectivity to the world. They also love the idea of remote home control, where they can monitor their house via tablets or smart phones, and be in the known about energy conservation. This is an excellent opportunity for Schneider Electric for the next five to 10 years.

Moreover, the local industrial sector also needs to invest heavily in automation for its entire manufacturing process. Finally, the construction sector requires fast and efficient energy distribution for new buildings. As a global leader in energy management and automation, we are a perfect fit to address the needs of Vietnamese customers, not only in the upcoming decade but further down the road as well.

How will the EU–Vietnam Free Trade Agreement (FTA) affect your business? What is your strategy to stand out from the competition flocking to Vietnam following the FTA?

The FTA is very good news, as it will boost EU–Vietnam bilateral trade and overall economic relations. Thanks to the lowered trade barriers, the FTA will spur exports from Vietnam to the EU and vice versa, which is truly beneficial to most firms in Vietnam, including Schneider Electric. Obviously, as Vietnam opens itself to the world, we will face a new wave of strong competitors from both Europe and other regions. But at Schneider Electric, we welcome competition because it is healthy for the Vietnamese economy and challenges us to stay alert and innovative at all times. We must always prepare to answer our clients’ ever-changing needs in the field of energy management and automation - which is both a challenge and an opportunity for us to grow.

One effective differentiation strategy that we use to stay on top of our game is economy of scale: our well-established presence in many countries around the world gives us the capacity to optimise costs significantly. We believe that access to energy is a human right, and lower costs will allow the vast majority of people and organisations to enjoy it.

In 2014, Schneider Electric has recorded €25 billion ($27.3 billion) in sales and employed 170,000 people worldwide.

Can you list some of Schneider Electric’s activities in Vietnam to promote energy efficiency?

Our strong belief in energy efficiency is reflected in our corporate social responsibility programmes. First, as mentioned before, Schneider Electric believes that access to energy is a human right and we are serious about giving back to the community as much as possible. In this spirit, we built solar powered systems for villagers in Bo Trach of the central province of Quang Binh and provided solar lamps to people in Ta Phin of the northern mountainous province of Lao Cai. This programme allows local communities to be connected and this is part of our overall campaign to promote the use of sustainable, renewable energy in Vietnam.

Another programme is to provide vocational training to the disadvantaged youth. Every year, we support non-profit organisations and schools to groom the next generation of skilled Vietnamese electricians, providing them with the best Schneider Electric equipment and training materials. We also teach them about energy efficiency. This is a truly sustainable way to demonstrate our social responsibility, and we hope to expand it to more training schools in the future.

On the business side, we have been trying very hard to win the trust of our key local customers to deploy energy efficiency solutions which enhance their operational efficiency and saving energy. Thu Thiem Power Company, Nha Trang Waste Water Treatment Project, Binh Khanh relocation compound of Thuan Viet Construction Co., or most recently the windmill in the Mekong Delta province of Bac Lieu are just a few to name among our thousands of customers in Vietnam.

With such huge achievements and a big recognition, I can say the year could not end in a higher note. All of the work we have done in Vietnam so far reflect our long-term commitment and requires continuous efforts and dedication. There is still a long way to go but as we are entering our third decade in Vietnam, I can see a greater, brighter future ahead where Schneider Electric Vietnam continues to be an active partner in the development of the country.

What the stars mean:

★ Poor ★ ★ Promising ★★★ Good ★★★★ Very good ★★★★★ Exceptional