PROJECT STORY 03

Driving Force of JESCO Group’s “Localization” Offering Japanese-quality EPC to Asia

―JESCO HOA BINH ENGINEERING JOINT STOCK COMPANY―

JESCO HOA BINH ENGINEERING JOINT STOCK COMPANY at forefront of JESCO Group’s Asian business expansion, catching the tide of construction in Vietnam

Against the backdrop of a rising tide of construction, Vietnam is booming.

 

Brand new shopping malls, high-rise condominiums, and office buildings have been sprouting up in rapid succession in Vietnam’s cities ever since the removal in 2015 of a prohibition on foreign ownership of property. The consequent inflow of foreign capital, coupled with the Vietnamese government’s emphasis on improvement of infrastructure, has fueled demand in the construction sector.

 

Under the “Offer Japanese quality in Asia” slogan, the JESCO Group entered the Southeast Asian market in 1997, starting with Malaysia. JESCO SE VIETNAM was established in 2001 in Vietnam. Its name was changed to JESCO ASIA JOINT STOCK COMPANY (JESCO ASIA) in 2012. The JESCO Group clarified its policy, positioning Vietnam as the base for the Group’s Asian strategy. 

 

The counterpart of JESCO ASIA is JESCO HOA BINH ENGINEERING JOINT STOCK COMPANY (JHE), which provides mechanical, electrical, and plumbing (MEP) services for high-rise-condominium projects.

Earning trust based on track record in Southeast Asia, tie-up with leading Vietnamese general contractor Hoa Binh
JESCO Group’s accelerating business development in Asia

JHE was established in 2014 as a result of the JESCO Group’s equity participation in a subsidiary of a Vietnamese company. In Southeast Asia, many people hold positive views about Japan and have confidence in Japanese technology. Moreover, the JESCO Group has a track record in Southeast Asia going back some 20 years, including participation in national projects, such as a project at Tan Son Nhat International Airport. Against this backdrop, the JESCO Group had already started to secure a presence in Vietnam. However, in order to put down roots in the region, there was a need to further cultivate relationships of trust and enhance recognition of JESCO. It was at this point that the Hoa Binh Construction & Real Estate Corporation (Hoa Binh), a Vietnamese general contractor, approached the JESCO Group about a possible tie-up.

 

Mr. Lê Viết Hải, Chairman of Hoa Binh, is one of Vietnam’s most admired and influential executives, as attested by his selection as one of the top 10 business executives in Ho Chi Minh City. Hoa Binh, a large company with 6,000 employees, is vying for the leading position in Vietnam’s construction industry. As a general contractor focusing on upmarket condominiums, Hoa Binh has an overwhelming presence in Vietnam. It was envisaged that a tie-up with Hoa Binh, the leading builder of desirable condominiums widely featured in gorgeous advertising, would have a positive impact on the corporate image of the JESCO Group. As Hoa Binh’s approach and its evident desire to introduce Japanese quality through a tie-up with a Japanese company was such a good fit with the JESCO Group’s needs, the tie-up soon became a reality.

Leveraging the tie-up with a leading Vietnamese company, JHE is making good progress
JESCO Group’s business development in Asia enters a new stage with the addition of private-sector projects

The Southeast Asian business of the JESCO Group grew 146% in the three years from 2014, the year in which JHE was established. Whereas the Southeast Asian business accounts for 24% of the Group’s net sales, JHE accounts for about 50% of the Group’s Southeast Asian business. JHE is fulfilling a pivotal role in the JESCO Group’s drive to achieve its objective of raising the ratio of overseas business to 50% of net sales.

When Hoa Binh selects companies to participate in its condominium construction projects, it accords priority to JHE. Thus, JHE is catching the rising tide of construction in Vietnamese cities. According to the commercial customs of Vietnam, a project participant usually deposits money with the general contractor. The tie-up with Hoa Binh has enabled JHE to lighten this financial burden. Above all, the addition of private-sector projects as a new pillar of the JESCO Group’s Southeast Asian business, which previously was dominated by ODA infrastructure projects and systems engineering work, is significant. JHE also offers one-stop engineering, procurement, and construction (EPC) services, including consulting, design, and procurement in a field encompassing installation of electrical equipment as well as air-conditioning and sanitary equipment. As the driving force of the JESCO Group’s Asian business centering on Vietnam, JHE intends to expand the scope of its business through involvement in Hoa Binh’s condominium construction projects.

 

(Posted in September 2017)

 

 

JESCO HOA BINH ENGINEERING JSC
9th Floor, South Building - 60 Truong Son Street, Ward 2, Tan Binh Dist, HCMC

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