VietNamNet Bridge – Vietnamese billionaires, who have incurred big losses due to their too ambitious investment plans, have decided to “sell everything they can” to undergo a severe restructuring to change their look.

HAGL Group's Chairman Doan Nguyen Duc.

Bargaining and running away

Doan Nguyen Duc, President of the Hoang Anh Gia Lai (HAG) Group, one of the most well-known influential tycoons in Vietnam, has had a meeting with investors to inform the business strategy for 2013-2015, under which the group will abandon a half of the current business fields.

Duc has decided that HAG will focus on its two maim business fields in the future, including agriculture production with the sugar, rubber and palm oil projects, and real estate sector with the investment projects in Myanmar.

HAG will sell its hydropower projects in Vietnam and step by step scale down the mining activities before it sells mining projects. It also plans to sell stakes in wooden furniture manufacturing enterprises to workers, while HAG would hold some 20 percent of stakes in the enterprises only. .

At first, developing hydropower plants was considered a strategic business field for HAG. However, the group later found out that the profitability was unsatisfactory, while better opportunities have come.

In fact, the plan of HAG to quit some business fields is predictable when Duc decided to slash the sale prices of apartments, narrow the business scale and offer to sell a series of hydropower plants. Meanwhile, Duc has poured big money into rubber, sugar projects and the huge real estate projects in Myanmar.

Abandoning a lot of projects when they still can bring profit is the only resort for HAG which owes money from left and right. It is estimated that the total accounts payable by the end of the second quarter of 2013 had reached VND19.4 trillion, including VND9.3 trillion worth of short term debts.

Duc has realized that he has taken on too many projects, while the projects all need huge capital, which may threaten the group’s financial safety.

Dang Thanh Tam, who was listed among the top 10 richest stock millionaires, has admitted the big debts and the failures when investing in the banking sector, telecom. Tam has decided to withdraw from the finance investments, securities and real estate to focus on the main business fields – industrial zone development and investment promotion.

Mai Linh Taxi, the big guy in the transport service sector, has also abandoned some business fields to gather its strength on the advantageous sector.

No one could imagine before that a giant investor, who poured money into tens of business fields and set up branches in so many provinces and cities, would give up everything to focus on developing taxi, maintenance and trade services.

Striving for sustainable development

Analysts have noted that the “give up everything” syndrome has spread out among the business community, when the national economy has bogged down in difficulties which make assets less valuable and bank loans inaccessible.

Kinh Do (KDC) has withdrawn from finance and real estate projects which “gobble up” much money, to return to the traditional job – sweets manufacturing, which is believed to ensure a sustainable development.

Duc of HAG has stated that HAG will leave the real estate sector completely after 2015. This has been described as a daring move, as real estate development and wooden furniture manufacturing were the “launching pad” of Hoang Anh Gia Lai.

Manh Ha