NovaGroup’s strategy of synergies creating added sustainable value

PhinDeli Café stores are located in prime locations in the centre of Ho Chi Minh City

Thanks to its strategy to gain a head-start through friendly mergers and acquisitions (M&As), NovaGroup is continuing to restructure its business by consolidating with many companies to become one of the leading economic development and investment groups in Vietnam.

Nguyen Thai Phien, deputy CEO of NovaGroup, said that the group had set the mission to connect the Vietnamese business community with the same ambition to reach out to the world.

“NovaGroup, with resources in its ecosystem, is connecting and supporting the business community to jointly create outstanding added values through high-class and experienced products and services,” Phien said.

After two bouts of restructuring, from a firm operating in agriculture and real estate, NovaGroup has developed into an economic investment and development group with eight member companies: Novaland, Nova Service, Nova Consumer, Nova Tech, Nova Capital Partners, Nova Logistic, Nova Industry, and Nova Finance.

Each companies belonging to the NovaGroup not only operates independently but also combines with others, helping NovaGroup provide full-service chains and creating a complete ecosystem that puts its customers and partners at its centre.

The NovaGroup ecosystem

NovaGroup currently has three key members of the eight companies – Novaland, Nova Service, and Nova Consumer. While Novaland is the centre of the ecosystem with the core business of investing and developing urban-scale real estate projects, Nova Service supports facilities for the cities and projects developed by Novaland.

Nova Service has set a goal to provide services for 36 million visitors, including six million international tourists, and put into operation 10,000 hotel rooms while building 50 medical and treatment clinics to provide for 300,000 inpatient and outpatient visits by 2025.

The company, meanwhile, will boast 3,000 retail service points, along with 450 food and beverage stores and nine entertainment areas with a total area of up to 400 hectares by 2025.

“These goals help Nova Service provide a comprehensive chain of services and tourism, creating a distinct competitive advantage,” said deputy CEO Phien.

Similarly, Nova Consumer specialises in veterinary medicine, vaccines, livestock feed, breeders, and high-tech animal husbandry solutions. The company is currently expanding into consumer goods and food items such as sausages, rice cakes, tea, coffee, and many others. It is hoped that opportunities for M&A deals will come from these new sections.

In addition to the three main pillars, NovaGroup is also gradually penetrating the field of IT. Nova Tech is a company specialising in such tech solutions, with the mission of helping the business community create added value and outstanding business efficiency.

Opportunity creates value

Three years ago, Dai Phu My JSC, which provides landscape construction services for real estate projects, became a member of NovaGroup’s ecosystem. From then, the construction of landscape services in Novaland projects was assigned to this company. After becoming a part of NovaGroup’s ecosystem, this company’s average annual profit has increased more than 10 times.

Similarly, this year the PhinDeli’s brand joined NovaGroup. PhinDeli instant coffee products were immediately introduced to consumers with a refreshed look. Besides that, the brand has become more popular through a range of coffee shops appearing in many prime locations in the centre of Ho Chi Minh City.

The M&A deals by NovaGroup will not stop there. Leaders have revealed that they are seeking opportunities with tech startup to help optimise operating costs. Thus,

NovaGroup is determined to continue with M&A deals as an essential tool to complete its value chain.

Touching on making these kinds of deals during the last two years that have been difficult for everyone, deputy CEO Phien said that small- and medium-sized enterprises (SMEs) still face difficulties in terms of scale, customers, incomplete products, or their human resources and operational systems.

“In particular, during the pandemic restrictions, many SMEs were forced to change their strategies or even quit their existing business fields. From those difficulties, a direction of synergy in both SMEs and larger enterprises has been found,” Phien said.

Regarding larger enterprises in Vietnam, after a period of formation and development, their social responsibility has also been improved. Now more than ever, they want to create a solid and competitive Vietnamese business community to reach out to the global market, Phien added.

But larger enterprises cannot cover all industries by themselves, Phien explained, adding that larger companies can only inject capital and bring in personnel to support SMEs. In contrast, SMEs also benefit from the symbiosis process, having greater and more sustainable development opportunities.

As a result of these new trends, NovaGroup has held many partner meetings to formulate its development strategy in recent months. These events have demonstrated the group’s gratitude to key and reputable partners who have accompanied NovaGroup and its member companies in the past, helping the group diversify product lines and expand its ecosystem and business towards sustainable development.

To realise Vietnam’s strong aspirations and turn the country into a developed one by 2045, NovaGroup will continue to seek companions and partners to further connect the business community and reach out to the world.