Friday Notes: Ricons & the growth of Vietnam’s construction industry

In this episode (FN.006): The continued discussion about Vietnam’s construction industry with Mr. Uli Feldsieper, Deputy Technical Director of Ricons Construction Investment JSC.

Ricons has worked on many large-scale projects in Vietnam.

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Below is a transcript of the episode, edited for readability.

Listen to the full episode at links below.

Granger: Good morning. It’s Granger Whitelaw with the Friday Notes. It’s been a really busy week, and we started earlier this week discussing how Vietnam can improve its construction industry. I am happy to say I have a very special guest with us today from Ricons, Mr. Uli Feldsieper, who will be joining us to discuss this very subject. Uli, good morning! How are you?

Uli: Good morning, Granger! I’m fine. Thank you.

Granger: Guten Morgen, my German friend! We met about a year ago, didn’t we? And we have played a little golf. How’s your golf game?

Uli: Good. Last Friday, we had a tournament.

Granger: That’s right. You did. How did you do?

Uli: Not so good.

Granger: Was that a real estate outing?

Uli: It was the Lighthouse event in which Ricons has been one of the main sponsors. Lighthouse is a kind of meet and greet for the people in the construction industry. You have engineers coming there. You have different companies, from consulting companies to construction companies. And from time to time, we also sponsor some events for them. It’s really nice. It’s a good organization.

Overview of Ricons

Granger: Ricons was founded in 2004. And it’s a part of a larger organization?

Uli: Yes, we are a member of the Coteccons family.

Granger: How many companies are in the Coteccons group?

Uli: I think there are seven.

Granger: I’ve seen your building down here in Dien Bien Phu. It’s really beautiful. It’s just set off the road, really beautiful. You guys do really nice work, clearly. And you’ve done some very large scale projects here in Vietnam, including high-rise buildings, hotels, resorts, industrial factories. And you’ve done some beautiful mountain resorts as well? Marble mountain?

Uli: Yes, that’s our project.

Granger: Were you involved with that?

Uli: Not personally.

Who is Uli Feldsieper? What does he do at Ricons?

Uli: I am the Deputy Technical Director at Ricons, and I’m also the Business Development Director. What I do is I try to get customers, whatever that means. Sometimes I travel to projects when I know they are opening a new phase, I try to engage with the customer and show them that we are the best partner for the project. I think it’s helpful for my company as I have a big network in the construction sector to learn about the projects before somebody else.

Granger: Yeah, you’re always out. I’ve seen you at all the events, the Singapore events, the Vietnam events, AmCham events… You’re all over the place, you have a big smile on your face, you’re very personable, a very popular guy in town and a super nice guy. So I can see why they would bring you in.

Uli: Well that’s the point. And I think it’s also a win-win situation for both of us because I really enjoy the work. At Ricons, I  have a lot of freedom and I feel really supported.

Granger: And you’re early guy, too. You get to work at 6 o’clock in the morning or 5:30 and you’re very dedicated. I notice that about you. So, before you came to Vietnam, where were you?

Uli: I was in Europe. Before Vietnam, I was in Germany. I’ve worked in construction since I was 16 years old. When I was 16, I started my education as a concrete finisher. It took me three years. After that, I worked for the U.S Army in Leesburg, at the airport. I was in the department of construction there. We were the ones who fixed the housings, the streets, any concrete works, any buildings we have to do new. That was our department.

Granger: So, infrastructure development, layout and then actual residential as well as commercial. That gives you a tremendous amount of experience to bring to Vietnam?

Uli: Yes, some. After that, I decided to go around a bit. I went to Switzerland, I worked in the Netherlands and a bit in Poland and finally did my Concrete Surveyor certificate. You need this one to really survey the concrete. And it was followed by my master in construction.

Granger: That’s fabulous. It gives you a lot of background to really help out in Vietnam. It’s nice to see guys with your experience here in Vietnam, helping with the development because as we know, it’s the golden age and things are growing so quickly here. And just your company alone probably has a hundred projects going at any given time, right?

Uli: I think right now we’re doing 38 projects, but we’re aiming for 100.

Granger: So, I wasn’t that far off, right? Do you try to do about 100 a year or 50 a year or what’s your goal?

Uli: It’s hard to say. It depends on the size of the projects. For sure, we are eager to do every project with good equipment and quality, but it really depends on the size.

Granger: The stuff that you guys focus on is mostly commercial or industrial?

Uli: We like to do everything, but industrial is more booming right now. I think the demand in real estate is also there. So, people need housing but I see the industrial right now is really booming.

Granger: So, the industrial means manufacturing facilities and maybe the ports or things like that because of all the business that not only is coming from China, but from all around the world; and the EU and different free trade agreements that are being put in place. There’s so much growth here.

Granger Whitelaw & Uli Feldsieper at The Lotus office.

What does the future hold for Vietnam’s construction industry?

Uli: You’re just mentioning the EVFTA. It makes Vietnam more interesting than before. And just imagine, I have several companies here say that next year, if it’s signed, we will earn 20% more.

Granger: Yeah. I did a little podcast on EVFTA a couple of weeks ago and they’re going to finish at the end of this year or early 2020. Do you think that’s going to be a boom for Vietnam?

Uli: For sure, but I think it’s for both sides. I mean Vietnam will be able to export more to Europe. For sure, we have to look at the certifications and standards… We will have to do some homework here. But, I think that is not a situation that we cannot benefit from.

Granger: That’s phenomenal for the country, for sure. And there’s a lot of positives about Vietnam right now with the growth. What do you see as some of the difficult things to overcome for Vietnam while all this growth is happening in the construction industry, specifically? 

Uli: I have to say the Vietnamese construction sector is still really strong and is growing over 10% in the last few years. I also see the quality is really good. They are really fast. I mean, back in Europe, we cannot do five days for one story. It’s almost impossible.

Granger: So, you do one story of a commercial building in five days here?

Uli: Yes, we need five day for discipline structure. I think that we have to watch out in the construction business or the planning sector to not turn Vietnam into a concrete jungle. It is one of my biggest fears because we need green also. We need sustainable buildings and we need our green spaces in the city. And I think this is really a challenge.

Granger: Well, Singapore has a lot of green space, right? And they’ve done great with their environment, keeping parks, keeping plans, keeping those open spaces and using sustainable materials and solar…

Uli: Exactly. I think that’s where we have to go. I mean you see in Vietnam right now, there’s a big boom of solar. And um, but I think this is not really enough.

Granger: The boom in solar is in commercial as well as residential?

Uli: In commercial. In residential, a bit but not so much.

Granger: So the commercial, the industrial warehouses, the large buildings, who’s really using solar today?

Uli: In industrial warehouses. If you have warehouses and you don’t use batteries, but you use solar, it’s quite cheap. It would pay itself off by some years, maybe 10 years.

Granger: Yeah. It’d be great if the infrastructure here, the power companies would let the people, whether they’re residential or commercial building owners, give power back to the grid. And they don’t currently do that.

Uli: Actually, they do but it is limited. You can sell the power back to the EVN but just on a limited scale. 

Granger: I don’t know about commercial but one of my friends here has a big house and has a solar over his entire house and they won’t buy his power. So maybe it’s residential versus commercial issues. Maybe for commercial they do. That would help a lot because you want the consumption here to be not over maximized, right? And you want to save money. So that definitely helps save money and then it gives a revenue stream back to the corporations and the people doing it. So it’s an incentive to go solar, go clean.

Uli: Yes, and we need it. The numbers state that if we grow like that and don’t invest in solar, in 2022, we will have a big shortage. 

Granger:  2022, here in Vietnam? Well, I think that’s true worldwide.

Uli: Right now, we are going the right way, fighting against this situation.

Will there be enough resources in Vietnam to continue the growth?

Granger: So solar, green space, making sure that we watch out for the environment. Do you think that there are enough resources in Vietnam to continue this growth? The people, the cost of labor, the infrastructure, do you think they’re all there?

Uli: The infrastructure, we have to see. But I think the people here, they are young, they’re hungry. The feeling here is very upbeat. There’s a lot of energy. Everyone wants to do something.

Granger: Absolutely! I see it every day and I talk about it all the time. It’s hard not to always talk about how much excitement going on and what the energy is like here. The growth, you know, it’s such a capitalist area, right? I mean it’s crazy what’s happening. And while in other parts of the world, free trade or growth is really stagnant, Vietnam is just continuing to climb. That’s really exciting.

Granger: So, how can Vietnam improve its construction industry? That’s what we were talking about. That was our thought for the week. And Uli, it’s been great to get your input. I wouldn’t have thought right away, open space, green, although when you say it, it makes sense, right? Really keeping the city feeling good and helping with the environment and also driving the solar. I didn’t really realize solar was such a big business here. I knew it was coming here, but I think I’m going to look closer at that.

Granger: Thank you so much for coming today and for giving us your guidance. And great luck at Ricons and everything you’re doing!

Uli: Thank you very much, and thank you for the invitation.

Granger: Absolutely! All right, I’ll see you on Monday with our next Monday Morning Coffee. Thanks for joining us and have a fabulous weekend! 

The Lotus Talks is produced by The Vietnam Group. This episode was produced by Granger Whitelaw, Cameron Lynch and Toan Tang.

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