With its sights set on the Lone Star state, Vietnamese contractor Hoa Binh Construction has ambitious goals that include growing its profit and revenue by working with — and potentially acquiring — construction firms in the U.S. and Canada.
The move is part of Chairman Le Viet Hai’s goal to hugely elevate the company’s annual profits to $1 billion and revenue to $20 billion by 2032,
Vietnamese news site VNExpress first reported
Hoa Binh will open offices in an unnamed city in Texas and Brisbane and Sydney, Australia this quarter, David Martin, director of Hoa Binh’s international business department told Construction Dive. The company will also open an office in Ontario in the near future, Martin told Construction Dive.
The Vietnamese contractor has a goal to quadruple its profits this year to $15.2 million (VND 350 billion), and grow its revenue to $762 million. Hoa Binh ended the first quarter with roughly $871,000 in profits, only 6% of its total annual goal, VNExpress reported. Company General Director Le Viet Hieu reportedly told shareholders that Hoa Binh won bids worth $405 million in the quarter, indicating that the company could be on track for that type of growth.
Hoa Binh, located in Ho Chi Minh City and established in 1987, believes it can enter the U.S. commercial construction market by leveraging its access to cheaper materials and a large number of easily mobilized workers. The contractor — which builds large-scale civil, industrial, hotel, multifamily and infrastructure projects in Vietnam — owns several plants there where it creates its own materials, such as glass, steel, cement and stone.
Martin said the company intends to ship its materials overseas and that a handful of executives will relocate to North America to work in the construction management side of finding and building projects.
The plan, to start, is partnering with existing general contractors to get to know the market better. At first, Hoa Binh will focus on the construction management of U.S. projects, specifically looking to build multifamily and hotel properties, while working with local subcontractors.
Why Texas? The state has a good mix of business-friendly laws, low corporate taxes and a booming population for Hoa Binh to plant its roots, Martin said.
Delivering U.S. projects
Even with the Infrastructure Investment and Jobs Act pumping billions of dollars into roads, bridges and other public works projects, Martin indicated Hoa Binh doesn’t have plans to get into U.S. civil construction yet.
Regardless, the firm’s financial goals are ambitious, Martin acknowledged. Hoa Binh’s goal of $20 billion in annual revenue would make it tower over all ENR’s Top 400 builders, though much of its cash would likely come from international projects. So, how will the builder get there?
“We need to invest, grow organically,” Martin said. “Investment and acquisitions, definitely. And, developing in order to create your own jobs."
Specifically, Hoa Binh will be looking to invest in subcontractors, Martin said, adding he’s confident small- to medium-sized companies will be eager to work with Hoa Binh.
"If they are a large contractor it is more difficult because they might see a threat rather than any other advantage, but still there are some people that are struggling with material supply and with some manpower,” Martin said. “So [hopefully] they see us as a potential help there."