Prime Group merger targets the future

June 11, 2013 | 09:58
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After merging with Thailand’s SCG Building Materials Company Limited, Vietnam’s leading domestic tile manufacturer Prime Group aims to build upon its reputation in the growing local market. Nguyen Van Nghia, deputy general director of Prime Group, shares his perspective with VIR’s Linh Mai.

Why did Prime Group decide to merge with SCG?

Merging with SCG is one of the strategic moves in Prime Group’s growth plan. We already have a very solid base of infrastructure, human resources, distribution network and brand reputation. We strongly believe that the long heritage and advanced technologies of SCG will be a perfect know-how source, a complimentary energy and investment for Prime Group to expand more aggressively in the local market.

We started up Prime Group in 1999 from a local company with only one factory producing ceramic tiles. At the time, most of the ceramic tiles were either imported or produced by foreign companies. I thought Vietnam has so much potential, not only because we are an emerging market but also our people are talented and we can do as much as our neighbour countries do. After 10 years our small company in northern Vinh Phuc province has become Prime Group as it is today. During all these years, we have taken several important and strategic decisions to reach the goal of building Prime Group stronger. The merger with SCG is one of our biggest strategic moves. It not only brings Prime Group to the next level, but also raises the standard of the tiles industry in Vietnam.

In the last couple of years, domestic building material businesses have been greatly affected because of the economic slowdown. What has the impact been for Prime Group?

Despite the economic downturn, our sales remain increasing during the last few years. We now have 24 subsidiaries, a network of 100 distributors and over 30,000 agencies and shops. This strong network has helped us to expand our business in Vietnam into different segments and penetrate into both rural and urban areas. Our success depends greatly on these distributors, so we will continue to invest and improve the relationships with our local distributors.

Prime Group now holds 20 per cent of the local market share. So after the merger with SCG, how is your strategy going to change?

Everything will stay the same -our operation strategy, leadership, management, and human resources. You may ask me why. The answer is quite simple. Prime Group has a solid business structure, management and operation strategy. It is the reason why SCG chose us as a partner to expand in the local market. And Prime Group’s business  strategy is to grow stronger and grab a bigger market share. We cannot satisfy with the current 20 per cent, of course. The strategic step we have made to achieve this goal is to equip Prime Group with more advanced technologies and innovations to improve our competitiveness.  Merging with SCG allows us to get access to their sources of know-how and most advanced technologies. Then the change will be at this point: Prime Group is to confirm its leading position in the industry in Vietnam by bringing product excellence to Vietnamese consumers.

Will the brand of Prime Group’s products be changed to SCG’s?

Nothing is going to be changed in terms of structure, operation strategy, and human resource at Prime Group, including our brand. We have been working hard during the last 14 years to build up the brand name for Prime Group in the local market and we have now established as the leading local brand in the industry. Consumers recognise and believe in Prime, a Vietnamese brand that offers them the faith in prospect and sustainability.  The main reason why SCG agreed to merge with Prime Group in Vietnam is because they saw the potential and strong growth in our reputable brand and business as a good investment opportunity.

Some other big foreign companies such as Japan’s Lixil has also expanded their presence in Vietnam. So how is the development opportunity for local firms?

Despite the downturn of the economy, Vietnam’s tile industry has a great development potential. The demand for ceramic tiles is three times the average demand for the region. Thus, it will attract a lot of foreign companies. The industry is growing fast and more competitive than ever.   With the presence of international competitors, local companies have to move faster and be equipped with good growth strategies, especially when it comes to product and service quality. As local players, we should invest more to enhance the technology and understand the needs of customers to reach their highest satisfaction.

We are focusing on domestic market and plan to gain more market share by launching new products, improving our product quality and services and plan to increasing capacity. Even more to synergy with SCG, we can import more products from SCG to explore and serve all market segments. We also put more activities in our distributors and  provide more services  to overcome our competitors. Export is not our priority but we will well prepare ourselves ready in case the domestic market hits slowdown, so as to increase our sales revenues.

By Linh Mai

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