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Investment group turns crisis into opportunity
Sai Gon Invest Group (SGI) has signed a letter of intent with the US-based hotel management group Starwood Hotels&Resorts Worldwide Inc to run its two five-star resorts and hotels in Da Nang and Da Lat. The Viet Nam News spoke to Dang Thi Hoang Phuong, group CEO.
Why did the group move into the hotel and resort business?
We began by investing in industrial parks. For a country like Viet Nam, upgrading infrastructure was necessary for development. We have succeeded with our Tan Tao Park in HCM City and Que Vo in the northern province of Bac Ninh.
After that, the SGI invested in urban and residential projects. As the country grew, we entered the hotel and resort business.
Viet Nam has huge tourism potential, but it has not been effectively tapped due to poor infrastructure and low quality of service. The SGI would like to provide more facilities at the two famous tourism destinations.
Why did the group choose this time to start construction of hotels and resorts?
We calculated that because of the global economic recession, we could build these two properties at just half the cost. And when the global economy recovers, their value will double.
At present, we have cleared land and obtained investment licences. Contracts for design and management have been basically signed. However, we still need a year for the construction licence and other related procedures. Construction of these two properties will start in the middle of next year and be completed at the end of 2013.
Furthermore, infrastructure development, especially airports and highways, has a very special role. Therefore, we have worked with Da Lat authorities and hope that by 2016, Da Lat’s Lien Khuong Airport would be upgraded into an international airport where we can welcome international arrivals, especially from Singapore and Thailand.
Authorities are also looking for funds to upgrade the road from HCM City to Da Lat and cut travelling time by half to four hours to attract more local tourists.
What does the group plan to do next?
The strategy of the SGI is to becomoe a market maker, not market follower; so we always try to create the market ourselves. After tourism, we will move to energy with a thermal power plant. As we all know, Viet Nam has achieved rapid economic growth but energy supply cannot catch up with increasing demand. Moreover, the Government has encouraged the private sector to take part in power generation. I think it is a good trend.
What is the group’s strategy during the economic downturn?
Many local investors have tried to pare their investments and operations during the financial crisis, but the SGI has been contrarian: we spend more to increase investment and upgrade infrastructure in industrial parks in the north.
We had experience of the Asian economic downturn in 1997 and we know how to convert financial challenges into a competitive advantage.
Because of the low cost now, we hope the value of our property will spurt.
With our experience, it is not difficult to find partners for investment. By drawing up feasible and effective projects, you can get investors.
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