On December 28 and 30, 2023, Coteccons & Unicons held the 2023 Partner and Subcontractor Conference for the Southern and Northern regions. With the theme “Joining Hands for Prosperity,” the conference was an opportunity for Coteccons Group’s leadership to share with over 200 partners about the company’s strategy, collaborative spirit, and sustainable development direction. At the conference, Coteccons also signed strategic partnership agreements with several partners including FiCO Pan-United Concrete Corporation, FiCO Tay Ninh Cement Joint Stock Company (TAFiCO, now Fico-YTL), Sungshin Vina Co., Ltd., Hung Phat Investment Development and Service Joint Stock Company, and Vitec-S Joint Stock Company.
Efforts to Transform Coteccons into a Great Company
As the opening speaker at the 2023 Partner and Subcontractor Conference for the Southern region, Chairman Bolat Duisenov shared insights about Coteccons and conveyed strategic messages to partners, subcontractors, and suppliers.
Mr. Bolat Duisenov stated: “We work every day to create value and positively impact the lives around us, making life better. Coteccons has spent 3 years pursuing this goal. Despite difficulties following the Covid-19 pandemic, we remain steadfast in our objectives. Currently, Coteccons has about 10,000 shareholders, and I am proud to say that they continue to support Coteccons. Additionally, the Board of Directors is very united and supports the company’s management team. We work daily to make Coteccons a great company. Looking back at our journey over the past 3 years, no barrier can stop us from achieving our commitments.”
To become a great company, Mr. Bolat affirmed that Coteccons cannot do it alone. Coteccons aims to become an Industry Leader. During the conference, Mr. Bolat shared three key messages:
- First, Coteccons & Unicons are dedicating time to restructuring and strengthening internal capabilities.
- Second, Coteccons & Unicons do not only engage in business for profit but are pioneers responsible for developing the construction industry.
- Third, Coteccons has a grand vision and needs the support of partners and subcontractors.
Great Expectations for the Future
Mr. Vo Hoang Lam – CEO of Coteccons, mentioned that the 2023 Partner and Subcontractor Conference is the most important event of the year. Mr. Lam and the leadership team at Coteccons have a clear stance on partnering with others. Specifically, Mr. Lam shared: “Partnership means not taking advantage of the partner’s vulnerabilities for personal gain. Coteccons is a publicly listed company, and everything is transparent.” 
Coteccons has a clear roadmap from 2020 to 2025. In October 2020, Coteccons underwent a significant change. In 2021, amidst the Covid-19 pandemic, all businesses and the economy were affected. The company’s top priority was stabilization; Coteccons successfully handed over projects, maintained good relationships with clients, and many clients continued to partner with Coteccons. In 2022, Coteccons restructured its operations. 2023 shows signs of recovery for Coteccons.
The value of Coteccons lies in its people, as well as its clients and partners. Therefore, Mr. Lam stated that future exchanges and collaborations with clients and partners will bring positive solutions.
In 2024, Coteccons’ products will surely stand out in the market. By 2025, Coteccons will achieve remarkable results. Coteccons’ structure includes 100% Unicons, one of the leading companies in factory, hotel, and high-value products. CTD owns 42.4% of FCC, a company specializing in infrastructure, having built the Phu Ly bypass in Ha Nam, and currently providing a BOT toll road. CTD has also recently established a subsidiary in the U.S. with an office in Florida. Soon, Coteccons will announce two new companies specializing in Façade and ME.
Partnership – The Key to Success
In the current market, many companies want to convert debt into products like real estate. Coteccons hopes that partners do not shift the risk burden onto others.
The zero-sum game implies that if I win, I will take money from you, and vice versa. This is the current reality. Profit margins in the construction industry are only 2%, and we are caught in a zero-sum game.
Mr. Tran Ngoc Hai – Managing Director of Coteccons, stated: “The backlog carried over from 2024 to 2025 is worth over one billion dollars. We haven’t yet discussed foreign investments and other investment areas of Coteccons. Although the market faced difficulties in 2023, we signed contracts for 46 new project packages and are currently managing 100 projects. Regarding Foxconn, they produce phone casings, and Apple is their only customer. Foxconn has invited us to participate in their tenders. Why can’t Coteccons be like Apple, and why can’t you be like Foxconn? Wherever there is profit, we bring it to you. We manage through digitalization, focus on the workforce, and aim for sustainable development.”
Coteccons’ success in securing the Lego project depends on many factors, with a crucial one being “partnership.” Shynro, a large contractor, is working with Coteccons to leverage each other’s strengths to win the Lego bid. Therefore, Coteccons hopes that other contractors will also participate in the tendering stage. To achieve this goal, we need to provide more information and discuss further.
Coteccons has implemented an ERP (Enterprise Resource Planning) system with criteria for transparency. Subcontractors and suppliers will join this system according to the proper procedures. Coteccons will also create channels such as a website and CTD Talk to encourage partners to share solutions and initiatives weekly.
Dialogue
Coteccons is committed to becoming a great company and wants to select strategic partners to accompany them. Coteccons’ aim is not only to serve material purposes but also to pursue sustainable development. “We want to leverage intelligence, capabilities, and resources… We cannot do it alone. In the next two years, we will choose strategic partners for a long-term journey.” – Mr. Bolat shared.
Mr. Bao – Fico YTL: CTD’s commitment is to build a strategic supply chain for collaboration. Partners need to consider whether to join this journey. Commitment to ESG goals is crucial. The construction industry accounts for 39% of total CO2 emissions, with construction materials and construction contributing 11%, and building operations 29%. To achieve Net Zero, all stakeholders, from material suppliers to operators, need to commit. FICO T11 has just released a sustainability practice report. We have guidance from the group and have started early… this journey will take time, and we need to start now. To achieve the Net Zero 2050 goal, all buildings need to meet the Net Zero 2030 goal. How can construction owners think about green buildings, and how can we share and encourage each other to achieve ESG goals?
Ms. Dinh Ngoc Bich: This is a challenging issue for the construction industry in Vietnam and globally. We should not talk about compensation, such as emissions and building charity houses… We must take direct responsibility for our impact. Given the nature of the construction industry, we cannot do it alone. Each brick we use is an ESG factor. The challenge is how to work together, align our directions, and support each other. We need to directly examine our business models and production processes to address these issues. We are at a stage of inspiration, but we are taking concrete actions. The 2030 emission quota is set, and each company is limited to a certain amount. Later, we will have to buy and sell emissions. This is a business and profit issue, so we must awaken now, identify problems in our production chain… Even in global forums, the term ESG is being replaced by EEE (Environment – Environment – Environment). We cannot offset environmental damage with anything else. We must move directly to Net Zero and reduce emissions. Currently, Coteccons is drafting a green procurement strategy, which is a significant challenge. We are consulting, but this is something we must do. Those who want to join Coteccons on this long journey must have a clear commitment to actions and efforts in emission reduction. We want to spread what we are doing. We are measuring emissions, which is not simple. In the construction industry, there are scopes 1, 2, and 3… particularly scope 3 depends heavily on partners, but we will strive to do this, pilot, learn, and work together. Regarding social issues, we talk to workers, which is something we can do. We also need to focus on technology, production behaviors, and the use of each other’s services…
Mr. Bolat Duisenov: Every journey starts with simple steps. For example, reducing concrete drilling, construction site waste, and placing toilets on higher floors to avoid workers climbing 10 floors… Socially, we can also contribute to reducing noise, interacting with neighbors, saying thank you, and helping. These simple actions can create significant impacts… ESG is embedded in each policy we enact.
Mr. Vo Hoang Lam: How to Elevate the Construction Workforce? Coteccons has introduced a policy for tiering the construction workforce, training staff, and guiding processes… Coteccons has implemented these but has not been effective and has not added value to the construction workforce. The foundation of development comes from both sides, identifying capabilities, advantages, needs, and gaps. Coteccons will work with you to achieve this goal. The greatest value of Coteccons is transparent information sharing. You need to think specifically about the support needed for each project. You must identify the value you bring to ensure interaction and cooperation between both parties.
Question: There seems to be a contradiction between Coteccons’ desire and actions regarding the establishment of strategic partnerships. Coteccons has carried out two M&A deals with contractors. So, what is the strategy of working together?
Mr. Bolat Duisenov: If I had strong and reliable strategic partners, I would gladly use what we have to go global instead of acquiring subcontractor companies. If there are strong and capable suppliers or subcontractors, we don’t need to acquire them. Coteccons’ goal is to ensure quality and standards when going global, not to seek additional profits by diversifying into other industries. My goal is to become a pioneering company in setting the standard, and we must engage in M&A to achieve that. If you are a strong company, you don’t need to worry about this. Within the next two years, we will choose strategic partners based on criteria such as guaranteed revenue… the ability to access all infrastructures, financial access, and our mission is to help you grow. We can rely on you. Our goal is to support our partners in keeping up with the external standards we’ve committed to with our customers. If in the past we couldn’t meet customer standards, we can work alongside our partners to meet those demands. Zero-sum game: If you lose, I win, and vice versa. We don’t want to be caught in that cycle. What we want is to sit down and have a win-win situation together. All the technology, training, finance… we are ready to provide for our partners. In case we cannot find strategic partners, we will have to establish our own standards and acquire other companies.
Question: Regarding the two facade and ME companies, did Coteccons acquire them to reduce the workload for subcontractors?
Mr. Bolat Duisenov: We tried to solve the problems for the company owners, acquiring companies was not our goal in development. We treat our partners with goodwill and always try to solve their problems. Our purpose in expanding is not to make more money, we understand our partners’ concerns. To balance the scales in this industry, we decided to step in to resolve the issues for the board of directors. This is problem-based thinking. To balance the game, M&A becomes necessary. M&A is not just about buying and selling but about mutual assistance. If they are our strategic partners, their problems become our problems, and we will work together to resolve them. I want people to understand that to become a leader in the industry and lead sustainable development in construction, we have to support others when they face issues. When those companies encounter problems, we are the first to go to their office and offer solutions, assisting them when they’re in difficulty. We need to earn the trust of our partners to walk together for the next 10-20 years. We want to share and, when someone in the game has an issue, help them out.
Mr. Võ Hoàng Lâm: I understand your concerns. Currently, the trend of M&A and transformation is happening at a rapid pace. M&A activities are conducted with enthusiasm, and suppliers and partners regularly discuss and propose that we invest in or acquire their companies. Regarding strategic partnerships, both sides must make efforts. The domestic market may not allow us to collaborate immediately. For example, with Samsung: initially, they brought along their entire ecosystem, then separated into individual companies and collaborated later. The relationship between suppliers and partners works similarly. The added value is the combination of your brand with Coteccons’ brand, creating a product that customers are willing to pay for because of that additional value.
Ms. Trần Thị Kim Loan – Ong Vàng Company: Is green certification and ESG a priority criterion in Coteccons’ selection of strategic partners? If successful in the Vietnamese market, could cultural shock abroad misinterpret Coteccons’ good intentions? Coteccons could seek out consultants, and not only be Vietnam’s leading construction company but also a construction management consultant.
Mr. Võ Hoàng Lâm: The conference only happens 1-2 times a year, so the Commercial Division can organize separate workshops on tiles, etc. Prioritizing ESG criteria is obvious. If we walk together, we will be aligned on customers, pricing, service, and quality. However, ESG in Vietnam needs transformation. Regarding cultural shock: In the past, many people tended to believe rumors. If things are explained thoroughly, listened to, and understood, it will be better, preventing small issues from turning into big rumors.
Mr. Trần Văn Thức emphasized promoting and spreading long-term positive thinking, supporting each other. This is an opportunity to propagate this mindset to subcontractors and suppliers, making success easier to achieve.
Mr. Trần Ngọc Hải: We want to get to the heart of the matter with our partners by visiting the factories. This is not about sidelining anyone but walking together, getting to the source of the product to find the right price. M&A: it’s not just about construction; our M&E is also very strong, and we invest in a small portion of the output. The units here also collaborate and operate a large output. We want to partner in other markets, not compete for a small piece of the pie. For those who need support with technology, systems, or finance, we are ready to help.
Mr. Dương Minh Hùng (HTF): The machinery for the Lego project is designed for 101,000 m² according to LEED certification. It’s very difficult for businesses to secure projects without Coteccons leading the way. We are very fortunate that after 14 years, we can do our job and place small pieces in a larger ESG picture. We are very grateful to Coteccons and Mr. Bolat for their kindness in letting us participate in the bidding process, estimating the volume without reopening tenders with other partners. Doing so would naturally lead to newcomers offering lower prices than the initial bidders. Cambodia also has a factory similar to Lego. If Coteccons has overseas projects, we are ready to join and be a part of that supply chain.
Mr. Bolat Duisenov: Two and a half years ago, no one trusted us. They provided us with wrong information and pricing, but we did not seek revenge. As the leader, I just thought that people didn’t trust me. It’s okay if the media and customers don’t trust us, but we need the trust of our subcontractors and suppliers. Those partners, subcontractors, and suppliers who trusted us and stayed with us after the pandemic have been fully paid. Our profit margin is only 2% to 2.5%. Many subcontractors and suppliers can have profits five times higher, but we are not bothered by that and still honor our commitment to payment. Even if we face losses, Coteccons always maintains its reputation and pays in full. Trust us with what we want to achieve in the next five years. Let’s share information and resources. Subcontractors and suppliers have a lot of experience and information in this field, so we need your help. In the next two years, we will become a true industry leader at all costs. We are willing to take losses and will be like a battleship leading the way, cutting through the waves to create a path for smaller boats to follow.
Mr. Võ Hoàng Lâm: Choosing trustworthy partners is the right decision, and we should learn from the process of interaction and exchange.
Mr. Trần Ngọc Hải: In the coming time, I will be quite busy sitting with each individual to discuss. After this meeting, we will have a separate meeting to outline the details of our cooperation. With Lego, we have taken the initial steps into the strategic partnership picture of Coteccons. Meeting the requirements of the investors is not just luck; it is part of the trend of increasing FDI. If we work together, everyone will have an opportunity.
Question: To accompany Coteccons in larger projects and expand internationally, there is currently a significant gap in financial capabilities between Coteccons and subcontractors. So, what does Coteccons need to do for subcontractors to accompany them on their journey to greater heights?
Coteccons has a high level of decentralization, empowering Project Directors (PDs) to calculate both ESG standards and economic efficiency. Even small materials like eco-friendly clothing will be factored into the cost. With the current economic difficulties, if investors do not pay, can Coteccons ensure that subcontractors and suppliers have a fulfilling Lunar New Year (Tết)?
Mr. Võ Hoàng Lâm: How can we elevate the construction workforce? Coteccons has implemented a tiered policy for the construction workforce, providing training, and guiding processes. Coteccons has made efforts, but these have not been effective and have not added value to the workforce. The foundation of development comes from both sides, identifying strengths, needs, and deficiencies. Coteccons will work with you to achieve this goal. The greatest value of Coteccons is transparent information sharing. You need to carefully consider what support is required for each project. You must also define the value you bring so that there can be interaction and collaboration between both parties.
Question: Who will pay for ESG? Does Coteccons need to pay extra for ESG? Consider the investment beforehand. Do you want to be a strategic partner or a regular partner? Looking at the Lunar New Year to see the story we are creating. One thing that both strategic and non-strategic partners fear is not receiving answers. Transparency and answers are needed.
Ms. Đinh Ngọc Bích: The story of cost versus benefit is a complex problem. ESG is costly and affects profitability. It involves ethical aspects, compliance, and profit. Mr. Bolat presented at a seminar that we view ESG as an investment. Ensuring compliance and brand positioning. How can investors align with us? Foreign investors are straightforward, but domestic investors are more complex. As an investor, you need to stay ahead and anticipate trends. It’s a brand advantage. Compromise with a profit margin like Coteccons at 2%.
Mr. Thắng – Shynro Company: Coteccons’ leadership has proven itself to the market over the years. Previously, FDI investors only worked with Japanese partners. Recently, they have engaged more with both FDI and Vietnamese partners. However, Japanese general contractors still revert to selecting partners after bidding. Therefore, based on Coteccons’ reputation and working methods, such as with the Lego project, we are committed to continuing a long-term partnership with Coteccons.
Mr. Bolat Duisenov: I want to reiterate the message in our field: Trust is an asset that we need to hold on to. Recently, we have faced a loss of trust from clients, but Coteccons is rebuilding trust through its capabilities. Looking at our backlog, balance sheet, and financials, it is clear that we are leaders. We focus on a strong team and potential to create differentiated products in the market. We always receive support from partners, shareholders, and the Board of Directors, all dedicated to Coteccons. The missing piece in the overall picture is trust from partners, subcontractors, and suppliers like those present here. A great dream is like a jigsaw puzzle missing the piece of trust to complete the picture. Frankly, if we continue playing a zero-sum game, we will be stuck in a cycle, making it difficult to achieve our goals.
What I am asking is to look towards the future. I don’t want to hold this meeting just for discounts; what I need is focus, fair pricing, and information sharing. At each stage, we will focus on assembling one part of the big picture, and I want everyone to help complete the picture.
The dialogue between representatives of subcontractors and suppliers with Coteccons’ leadership took place on December 30 in Northern Vietnam.
At the beginning of the dialogue, Mr. Trần Ngọc Hải discussed the significance of today’s meeting: “We are not here just to have a one-way interaction where we speak and you listen. We need to contribute to finding a direction that ensures our competitive advantage, effectiveness, and growth in profitability. We need to focus on how to collaborate, share, and support each other to achieve sustainable development.”
Mr. Hồ Phi Sơn, Director of Trường Phong Company, shared and asked: “I have been working with Coteccons for over 11 years, through many of Coteccons’ projects, including the recent Lancaster Legacy with 8,000 m² and 5 basements, and a 14,000 m² project currently under construction by Trường Sơn contractor. My company, Trường Phong, has undergone many evaluations, and today I appreciate the leadership’s candid sharing about the company’s direction. This gives us an opportunity to sit together and find solutions to reduce costs, especially since interest rates are very high. However, I request the company to consider providing clearer information on aspects such as progress and payment timelines. I am willing to wait 4-5 years if necessary because it is normal to collaborate together.”
Mr. Trần Ngọc Hải responded: “When a contractor has been working with Coteccons for a long time, there are many solutions available to support each other, such as advance payments or specific final settlements on work packages. If a contractor is facing difficulties, they can come and work directly with us. Instead of investing elsewhere, we can invest in you. We will create conditions for contractors to develop with us because by 2025, our revenue will be close to 2 billion USD. Coteccons alone, along with a few subcontractors, cannot handle all the work. The purpose of today’s meeting is to find optimal cost-saving solutions that enhance efficiency, not just to ask contractors to lower their prices. Only long-term subcontractors who have worked in the field can provide practical solutions, improve efficiency, and achieve better profitability. That is the purpose of today’s meeting.”
Mr. Võ Hoàng Lâm added: “The daily issues we face need to be resolved, but we should also focus on the bigger future. The construction workforce is a group that needs to be taken care of and attended to, so everyone needs to sit down together to exchange timely information and avoid creating confusion or spreading inaccurate rumors. This is part of building the supply chain, and Coteccons will organize workshops on this issue in the future.”
Mr. Tùng, Director of Phú Phương Company, shared and asked: “I really appreciate the leadership’s approach of not playing ‘games.’ From the bidding stage, Coteccons’ management was very straightforward about submitting realistic prices with no ‘games’ involved. Hearing this made us feel confident to eliminate contingency amounts and trust that we would not be pressured to reduce our prices by an additional 5-10%. In fact, Coteccons has executed the project as promised. My question is whether Coteccons plans to use tender methods such as direct appointment or re-bidding? Are there commitments regarding sales, finances, and extended deadlines for subcontractors and suppliers?”
Mr. Võ Hoàng Lâm responded: “Regarding the first question about sales commitments, a strategic partnership with Coteccons is required to secure such commitments. We need to understand that this is not just about Coteccons; a strategic partnership must be mutually beneficial.
For the second question about financial and banking commitments: Coteccons is willing to provide long-term support to build a strategic supply chain. However, this must be based on a mutually advantageous spirit and a win-win relationship. Subcontractors and suppliers must recognize the advantages gained from the supply chain and understand that Coteccons’ success is also their success. Only then can we achieve a long-term partnership.
Regarding the third question about extended deadlines: Clients typically do not accept additional fees for extended deadlines. Therefore, as genuine partners, we need to work together to persuade clients to take responsibility.”
Ms. Dung, Director of Đông Á Company, expressed her gratitude and trust in Coteccons, sharing her experiences from the Vinfast project. She mentioned that there were times when the contractor’s debts exceeded 100 billion VND. Without this trust, it would have been challenging for the project to reach completion as it has today.
