Electrical work for social infrastructure and systems engineering work consigned from Japan
The two businesses support the JESCO Group’s growth

In line with the Vietnamese government’s Socio-Economic Development Strategy (SEDS) 2011-2020, which positions infrastructure development as one of the three core areas, various projects are underway in Vietnam at an accelerated pace. Because of the elongated shape of the country, coupled with the fact that the two principal cities, Ho Chi Minh City and Hanoi, are located far apart in the south and the north, there has long been a need to improve transportation infrastructure, particularly by an expressway and a high-speed railway connecting the north and the south.

The North-South Expressway is currently under construction. For this project, JESCO ASIA JOINT STOCK COMPANY (JESCO ASIA), the JESCO Group’s base in Asia, is in charge of installation of intelligent transport systems (ITS), such as tollgates, electronic toll collection (ETC) systems, surveillance cameras, and information display boards.

JESCO SE VIETNAM, the forerunner of JESCO ASIA, was established in 2001. Thus, the company has been doing business in Vietnam for 16 years. Besides electrical work for such ODA projects, JESCO ASIA has another business pillar, which is the systems engineering business. JESCO ASIA handles design and quantity surveying for projects for which JESCO CNS in Japan received orders. In fact, JESCO ASIA was initially engaged in the systems engineering business. Design and quantity surveying are among the more complex and laborious tasks in the flow of electrical work. JESCO ASIA handles design and quantity surveying as an offshore business and fulfills a vital role by providing indispensable support for the JESCO Group.

Participation in major ODA* projects, starting with Tan Son Nhat International Airport

The systems engineering business comprising design and quantity surveying remains JESCO ASIA’s principal business. Hajime Nakamuta, then President of JESCO ASIA, recalls the background to the start of the offshore systems engineering business. “Electrical design is one of the core competences of the JESCO Group and thus something we are thoroughly familiar with. Expertise we had built up enabled us to venture into Asia.” As well as electrical design for plants of Japanese companies that are establishing a growing presence across Asia, JESCO ASIA also has experience of design for an international airport. For quantity surveying for electrical work, the commitment and diligence of its Vietnamese staff have helped JESCO ASIA provide same-day response and demonstrate overwhelming manpower.

JESCO ASIA also started to perform installation of electrical equipment to meet customer needs. As a company that satisfies the high technical standards required for ODA projects of the Japanese government, JESCO ASIA was requested to participate in a project for construction of a new terminal building at Tan Son Nhat International Airport, which was completed in 2007. JESCO ASIA was responsible for design, installation and management of electrical work.

This project was awarded a gold medal by the Minister of Transport of Vietnam and this high evaluation of the expertise deployed greatly contributed to JESCO ASIA’s earning of trust in Vietnam. After the Tan Son Nhat International Airport project, JESCO ASIA participated in the project for the construction of a terminal building at Noi Bai International Airport (2014) and the ITS installation project for the North-South Expressway (2016). JESCO ASIA’s revenues from ODA business now exceed those from the systems engineering business.

*ODA: Official Development Assistance. Assistance and financing provided by governments and government agencies of developed countries to developing countries to promote their economic development and welfare.

JESCO’s target: 50% of net sales to be derived from overseas business in Southeast Asia and beyond

JESCO ASIA accounts for about 30% of the sales of the JESCO Group. Along with JESCO HOA BINH ENGINEERING JOINT STOCK COMPANY (JHE), a Group company also established in Vietnam, JESCO ASIA’s strong presence is the visible result of the JESCO Group’s strategy for business development in Asia.

JESCO ASIA is mainly engaged in infrastructure work centering on the ODA projects of the Japanese government, while JHE, which was established as a joint-venture company with a local condominium developer, focuses on private-sector projects. The ability of the two companies, with their different roles and business fields, to develop business in their own unique ways is a great strength of the JESCO Group. 

JESCO ASIA is eying the potential for business development in other Southeast Asian countries, such as Myanmar and Cambodia, and in neighboring Asian countries, such as Bangladesh and Sri Lanka. Nakamuta expresses JESCO ASIA’s enthusiasm: “So that JESCO becomes widely recognized, we want to be the first Japanese company in our field to develop business in those countries.”

Further development of the systems engineering business is also important for the JESCO Group as a whole. As the average age of people working for systems engineering firms in Japan trends upward, the offshoring of projects is expected to increase. The average age of populations in Southeast Asian countries is low. When recruiting engineers in Vietnam, the oldest applicants are generally no more than about 40 years old. Southeast Asian counties are youthful, which is reminiscent of Japan during the period of high economic growth. JESCO ASIA intends to capture the demand for offshore projects by establishing a systems engineering department with 300 staff members. From “JESCO in Japan” to “JESCO in Asia”—the JESCO Group’s Asian strategy has entered a new stage.

(Posted in September 2017)

JESCO ASIA Joint Stock Company

10-11Floor, South Building, 60 Truong Son Street, Ward 2, Tan Binh District, Ho Chi Minh City, Vietnam