VietNamNet Bridge – Withdrawing capital from the business fields in which they don’t have advantages and experiences--after a period of incurring loss, economic groups have recovered their strength.

After one year of construction, the Hoang Anh Attapeu sugar and sugar cane industry complex capitalized at $100 million in Laos has begun churning out sugar and generating electricity. The Hoang Anh Gia Lai Group’s project is expected to bring relatively high profits right in the first year of operation.

Doan Nguyen Duc, President of Hoang Anh Gia Lai, which reported big difficulties with the real estate development in 2012, keeps optimistic about the project, believing that the success of the project would help settle the capital shortage problem of Hoang Anh Gia Lai.

Growing sugar cane, making sugar and generating electricity every year has been serving as the short term investment projects which can bring money to implement longer term projects, including the ones on growing rubber.

Duc has revealed that Michelin, one of the leading rubber tire manufacturing groups in the world, has suggested a cooperation plan, under which it commits to be responsible for the outlet of all the rubber to be churned out in Laos. Rubber trees have been grown on an area of 24,300 hectares in the country, while the group has 51,000 hectares of rubber trees in Vietnam, Laos and Cambodia.

Observers have noted that Duc’s recent investment plans are the moves of his plan to quit the real estate sector and jump into the business fields which promise more sustainable development, such as rubber or hydropower.

Duc recently decided to slash the sale prices of Hoang Anh Gia Lai’s real estate projects. After that, he stepped down from the post of the Chair of Hoang Anh Gia Lai Land.

Gemadept, a shipping firm, and REE, a refrigeration engineering enterprise, are the two other “big guys” who have been successful with their decision to gather strength on their core business fields.

The fourth quarter’s finance report of Gemadept has not come out yet, but Gemadept made satisfactory profits of VND40.26 billion in the third quarter of 2012, a sharp increase of VND2.44 billion in comparison with the same period of the last year.

Similarly, REE has withdrawn from the investment deals in non-core business fields to cut down expenses and develop more strongly.

REE was once listed in the “big 3” group, together with Gemadept and SAM, led the stock market as the biggest blue chips stocks.

Later, it met a lot of difficulties when trying other non-core business fields – real estate and finance investment. However, since having realized its problems, REE has restructured itself, giving up finance investments while having made heavy investment in the energy sector.

One good job brings more money than 9 inexperienced jobs

Duc, the second richest stock millionaire in Vietnam, the boss of Hoang Anh Gia Lai Group, has stated that Hoang Anh Gia Lai would completely withdraw from real estate projects by 2015.

Gaining first achievements with wooden furniture manufacturing and real estate development, Duc earned a lot of money from the two business fields. However, right in 2007, when the real estate market was still scorching hot and profitable, Duc, who keeps a long term vision, decided to develop rubber projects in Laos and develop hydropower plants.

Experts believe that power generation and rubber plantations are the two fields which have great development potentials and can bring sustainable profits.

As for REE, after realizing its problems in 2008, when incurring the loss of VND150 billion from finance investments, has decided to focus on three main fields, M&E, production and trade and leasing real estate.

Manh Ha