- Your Consultant
- Green Growth
Thomas Domanski, managing director of Bauer (Malaysia) Sdn Bhd, who is also responsible for Far East region, talks with VIR’s Ngoc Linh.
How do you assess the construction industry in Vietnam?
The construction industry in every developing country is the driver of the economy, because you have a lot of activities which come from the construction, and the construction is development.
Therefore, the construction industry itself has to develop. In Vietnam, there are a huge amount of projects here. When I came here two or three years ago, in Hanoi, I thought I was in Dubai, because I found many construction sites, a lot of local contractors and I found some but not yet many foreign contractors. But there is a difference from Dubai. It is the speed of the construction.
In Hanoi, it took much longer to finish a project than in Dubai. This means equipment, people and management have to develop themselves and modernize. Otherwise, I think the potential for the construction industry is huge. In Vietnam, there are 90 million people here, almost young and they need a lot of things to be built. I think for construction firms, this is a right place.
How many projects have you been involved in Vietnam?
About thirty projects. The first one was Dung Quat refinery. We are also involved in most of big property projects here. We executed foundation works for port projects in Ba Ria-Vung Tau province and we also executed foundation for Terminal 2 at Noi Bai international airport. We grew fast in this market.
This is very difficult time for Vietnam economy. What specific difficulties stand out from your perspective?
At the moment, I see a lot of difficulties in Vietnam. Price is a difficulty, but the major problem is not only the price. Money collection is another issue. You know the lifeline of a contractor is money. If there is no cash, you cannot build, because people who sell resource material, they all need you pay cash. At the moment, the biggest problem of Vietnam is the lack of cash.
But you are involved in most of big projects in Vietnam which are prioritised by the government. Do you still face money collection issue in big projects?
At foreign-funded projects, the payment security is much better than private projects at the moment or even the government’s projects. At government projects and private projects, it is not easy for sub-contractors like us to collect money now. If you get money, you can pay money. You get more in your pocket, you can pay also. And it is okay. But if you get less and you need to pay more, the problem will come. Payment is a very big problem for us in this country.
You are facing many difficulties here, so why are you confident in the economic outlook?
I think the country will need time to rebuild. If you look at a lot of countries here in Asia, they have had similar steps. In the countries we were working in during the Asia financial crisis, they overcame. Vietnam needs strong leadership and probably needs to restructure its banking system and credit structure to make the credit ability of Vietnam become stronger.
You need to see lots of countries in Asia and how they dealt with high level of bad debts. When something is bad, you must make it better. You cannot deny it, but you have to deal with. I think the restructuring has been implemented in Vietnam.
And I am very, very sure after some difficult years, Vietnam will rebound stronger. I believe in next five years Vietnam will be another tiger country.
What you expect about your business in Vietnam?
I hope that we can do in Vietnam the same thing what we did in other countries. Training people, bringing technology, professional construction management and products which helps save money. If Vietnam allows us to do that, I am very sure we can repeat what we have done in other countries like Malaysia, Indonesia right now, the Philippines.