Vietnam and its First Billionaire Part 2

By: Prof. Eric Soriano

PHAM VOUNG or Pham (his name means prosperity) was born in Hanoi in 1968, the very same year the Tet Offensive against the Americans was launched. His mother ran a sidewalk tea stand and his father worked in the North Vietnamese air defense force. At that time, Vietnam faced a very serious economic crisis and Pham’s family subsisted for a time on the meager earnings from his mother’s tea cart.  Vuong studied economics at the University of Moscow in Russia. After graduating in 1993, he moved to Ukraine and founded the food company called LLC Technocom.  During that time, Pham scraped together $10,000 from family and friends and opened a Vietnamese restaurant. Simultaneously, he began making and drying ramen noodles via a process he learned in Vietnam.  The Ukrainians loved the noodles and Pham saw the opportunity and took a huge risk by borrowing money even at a usurious rate of 8% interest a month and further expanded his noodle operations to include the dehydrated mixes used to season noodle soup. His gamble paid off and he earned the monicker as the ramen king!

 

In 2010, with revenues of US$100 million, Pham sold his noodle company LLC Technocom to Nestle for US$150 million. While he was building his noodle empire in Ukraine, he started funneling money back in Vietnam. With Vietnam’s GDP growing, Pham saw an even bigger post-communist fortune so in 1999 Pham took a trip to the Vietnamese beach city of Nha Trang and trained his sights into developing a 225 room luxurious Vinpearl Resort. It became a huge success and the following year he opened Vincom Center Ba Trieu, Hanoi’s first commercial tower complex (our equivalent of an Ayala Greenbelt with office towers). Three years later Vinpearl resort was upgraded with an additional 260 suites and a cable car connecting the island to the mainland. Next in Pham’s list was the development of high-end townships that included several hundred luxury villas called Vincom Village in Hanoi. Subsequently Vincom went public in 2007, but Pham retained Vinpearl as a separate company focused on his luxury resort developments. In 2011, Pham merged the two into the Vingroup.

 

With all his successful ventures spread across most industries, it is important to understand how this young billionaire turned around a misfortune into a staggering wealth of $7.5 B. Undoubtedly, his phenomenal rags to riches story should serve as an inspiration to aspiring entrepreneurs.

 

1. It all begun in Ukraine where his ramen noodle became an instant hit. Pham so the need and simply provided the instant noodle product.
2. To spread the risks, Pham’s products and services are varied and diversified. He ventured into restaurants, noodles, real estate, luxury resorts, hotels and shopping malls.
3. Pham’s operations are based on scientific and cultural realities. He cleverly blended western and oriental concepts.
4. In property development, he employed man-made and natural resources as factors and hired the right people who meticulously maximize land usage.
5. Pham was clearly opportunistic but stuck to his vision of becoming a dominant player in industries where he operated on
6. As a visionary leader, he made use of the Vietnamese culture of hard work and innovation

7.Pham combined financial prudence and the right marketing approach in branding his products.

8. His Vingroup brought together the most capable local and foreign professionals, comprising mostly technical and design experts from Manila. Pham’s metrics in hiring local talent centered on their intellect and discipline, talent and determination, patriotism and ethnic pride, charity, good intentions and intense work ethic.

 

To summarize Vingroup’s corporate culture, Pham created a culture of professionalism and trust that revolved around six powerful values: “Credibility, Integrity, Creativity, Speed, Quality and Humanity. The emphasis on speed, efficiency and adherence to company policies is imbued in all employee actions translating to a collective force that ensured success in all industries.

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Prof Enrique Soriano is a World Bank/IFC Governance Consultant, Senior Advisor of Post and Powell Singapore and the Executive Director of Wong + Bernstein, a research and consulting firm in Asia that serves family businesses and family foundations. He was formerly Chair of the Marketing Cluster at the ATENEO Graduate School of Business in Manila, and is currently a visiting Senior Fellow of the IPMI International School in Jakarta.

 

He is an associate member of the Singapore Institute of Directors (SID) and an advisor to business families worldwide, a sought after governance speaker, book author and have written more than 200 articles and publications, including two best-selling Family Business books (Ensuring Your Family Business Legacy 2013 and 2015). You can read Prof Soriano’s business articles for free at www.Faminbusiness.com