On September 10, 2023, the F.I.T Group announced its official divestment from the Cap Padaran Mui Dinh project in Ninh Thuan province. This decision drew public attention as this project is considered a key development in the resort market of the South Central region. The Investment Newspaper interviewed Mr. Nguyen Van Sang, Chairman of F.I.T Group, to delve deeper into the story behind this decision.
Could you shed more light on the decision of the F.I.T Group to divest from the Cap Padaran Mui Dinh project? Before making this decision, what research and considerations did the Group undertake? What factors influenced this decision given the current resort real estate market situation?
We began considering the possibility of divestment or continuation around the first six months of 2023. Naturally, this wasn’t an easy decision, especially when the Group has poured so much passion and time into the project. Leaving is regrettable, but looking at our overall strategy and long-term vision, we decided to halt to prevent wasting more time and resources.
Firstly, we revisited the market. Although daily reports indicate a rejuvenation of the resort real estate market, experts believe it’ll take many more years for the market to truly untangle macro issues: an oversupply causing market stagnation, prolonged legal issues, rising developmental costs due to increasing input costs, and anticipated changes in major laws such as the Land Law, Real Estate Business Law, and Bidding Law.
Crucially, the economic recession post-COVID directly influenced the project’s development direction. Naturally, the recession impacted real estate in general, but the heaviest hit was on large resort projects, the model being used at Cap Padaran Mui Dinh. This is the main reason we paused to protect our other resources. The F.I.T Group invests in many sectors; we can’t jeopardize the stable operation of the entire Group for one real estate project in Mui Dinh.
What preparations has the Group made to ensure the interests of related partners?
Upon deciding, we immediately initiated a dialogue with the senior management of Banyan Tree – our strategic partner for the project. Fortunately, we received their understanding and support, making subsequent negotiations relatively smooth. Up to this point, I’ve always held Banyan Tree in high regard, especially Mr. Ho Kwong Ping, the Chairman. Given his stature and experience, Mr. Ho has provided us with invaluable insights and advice. These consultations have significantly helped us not just in reevaluating this specific project but also in the overall real estate development strategy of the Group. Banyan Tree will always remain an essential partner whenever F.I.T Group seeks collaboration. We truly value that.
In your opinion, what are the most significant challenges for businesses in developing resort real estate at this time? Do you have any predictions about the market’s transformation in the near future?
As I mentioned earlier, the resort real estate market will need considerable time to recover. However, the biggest challenge right now is the significantly diminished interest from customers in this segment, which might further decline in the upcoming period. There are multiple reasons leading to this issue.
Firstly, banks are tightening credit control, making it difficult for investors using financial leverage.
Secondly, in a stagnant transaction environment, investors face liquidity issues due to high-interest burdens and longer transaction waits. The hallmark of resort real estate is substantial investment, increasing liquidity loss risk and making investors more cautious.
Given the divestment decision at the Cap Padaran Mui Dinh, does the F.I.T Group have plans to invest in the real estate sector in the future? Could you share some lessons/experiences the Group has gained from this project?
Exiting Cap Padaran Mui Dinh doesn’t imply F.I.T Group’s exit from real estate. We’re just realigning our strategy. Our time at Mui Dinh made us realize that a project’s value doesn’t come from its scale but its practicality. Hence, instead of mega projects, the Group is targeting mid and high-end segments with practicality at the forefront, aligning with our core values.
For this reason, instead of investing in mega projects, our Group is targeting the mid to high-end segments with practicality as our top priority. This aligns well with our company’s principles. As you can see, in all areas our Group has chosen and is working on, we always strive to enhance the quality of life for the community.
Chairman, could you share more about the long-term objectives and vision of the Group, especially in the development of tourism and real estate?
Our policy is to work solidly and stably, rather than rushing or spreading ourselves too thin. The Group does not intend to aggressively expand into the real estate segment, but rather, invest in specific segments and focus on delivering the best possible. The ultimate goal of our business is to combine the company’s profits with sharing societal values with the community. Therefore, we don’t push too rapidly for profit, deviating from the core principles that have supported the Group’s development over the past 16 years.
F.I.T Group is known for its diverse range of activities. Currently, the Group focuses on key sectors, including pharmaceuticals, agriculture, and fast-moving consumer goods. Could you tell us about the plans and specific strategies for each sector in the near future?
All of our business sectors aim to serve the community, addressing the essential needs of the majority of customers but with the goal of raising quality standards. These four words are not only memorized by CEOs but every employee must internalize them, always remembering that everything they do comes back to serving a better life. Therefore, we continually reinvest in our factories and projects, ensuring that our facilities have the best technology and that our production environment meets national, regional, and international standards. In 2023-2024, the natural alkaline water brand Vikoda will be expanded further for everyone to enjoy this unique water source.
Duoc Cuu Long focuses on expanding its production scale with a pharmaceutical factory meeting EU-GMP standards in Long An province, covering 50,000 m2, with a total investment of 1,035 billion VND, and a medical equipment factory spanning 10,846.6 m2, with an investment of about 15 million USD. FIT Cosmetics is advancing into developing biologically sourced cosmetic production technology, ensuring safety for both humans and the environment. Agricultural areas are being expanded in Can Tho and Vinh Long, ensuring quality and proactive supply…
F.I.T is known as one of the Groups emphasizing the creation of a motivating and creative working environment. Recently, F.I.T was also honored in the Top 500 leading employers in Vietnam (VBE500). Chairman, can you share your perspective on ensuring a positive working environment?
In my opinion, a good working environment is the least we can provide in return for the dedication of our workers. We aim to attract talents to work in the Group and its member companies. They, especially the younger generation, are very dynamic and creative at work, eager to express themselves, get recognized for their contributions, and especially, they want a clear career path. At F.I.T Group, we have a career development plan for every position and a training program for the next generation of leaders.
Of course, the workspace must meet modern criteria, be digitized, and ensure a balance between work and leisure, health care amenities like a gym, golf, a reading room, a central kitchen… Only a good environment can nurture talent.
Chairman, how do you evaluate the importance of creating social and community value in business strategy? Could you share with our readers about the CSR policy of the Group?
From the outset, we firmly believed that creating social and community value is our responsibility. Since it’s a responsibility, it needs to be perfected through goals, action plans, specific strategies, and transparent reporting to the public. Whether CSR is part of the business strategy or not depends on each company’s choice.
At F.I.T Group, our CSR activities are being re-planned to focus on long-term projects, primarily focusing on environmental balance and improving the quality of life. We are also collaborating with some reputable organizations to ensure effective implementation.
Thank you for this conversation!
Source: Investment Newspaper: https://baodautu.vn/emagazine-chu-tich-tap-doan-fit-roi-khoi-du-an-cap-padaran-mui-dinh-khong-co-nghia-la-chung-toi-roi-khoi-mang-bat-dong-san-m198272.html?gidzl=CctSG3mb7NOzUjj3FJyOS35vtaicFKmjAYtU7Y0vItaWU8r8VJmOV7Dys1buQ1r-U23QIcKvSVS3EYeUUW
