Last week PEB Steel celebrated 20 years of operations in Vietnam and the inauguration of its fifth plant in Dong Xuyen industrial park, Ba Ria – Vung Tau province. Executive chairman of PEB Steel, Sami Kteily, spoke with VIR’s Hoang Phuong about the new high-profile plant and Vietnam’s welcoming investment climate. PEB Steel has worked with many clients all over the world since 1994 and attribute our high client retention rate due to our tailor-made pre-engineered steel buildings (P.E.B.) solutions to each client’s specific requirements as well as our commitments to any project’s outcomes.
How much has PEB Steel invested in the expansion of its manufacturing facilities in Vietnam?
Prior to the construction of this new plant, PEB Steel had four very modern factories loaded with state-of-the-art machinery and equipment that manufactured first class products. We thought that the fourth would be our last, but apparently we were wrong. Our business has continued growing at a double-digit rate over the past 20 years despite the challenging macroeconomic situation. So, the fifth factory is actually an expansion to satisfy an increasing demand for specialised complex steel structure facilities. Returning to your question, PEB Steel has invested $25 million in the five plants in total, and the inauguration of the fifth facility alone cost approximately $3 million.
Our business is designing and manufacturing steel structures. Therefore, when it comes to our own plants, we can economise and optimise the pre-engineered buildings to dramatically cut costs.
What is the current capacity of your factories?
In order to provide an accurate view of capacity utilisation, we have to analyse them as a whole, since each factory has specific roles and responsibilities. For example, one factory only produces the build-ups of the pre-engineered buildings, while another only produces the paint for the build-ups. The latest investment allows us to boost our overall design capacity to 60,000 metric tonnes per year. This huge capacity enables PEB Steel to deliver pre-engineered steels buildings in a very short time and at competitive prices. In 2015, PEB Steel is targeting to deliver 50,000 metric tonnes, which means our capacity utilisation rate has risen to 80 percent.
Does PEB Steel apply the advanced technology to the new factory?
During 20 years of development in Vietnam, we have gained valued experience, and we have studied and innovated many advanced technologies, which we have applied to the design and fabrication of this new fifth factory. These new technologies helped to accelerate the workflow, simplify operations, and increase our working efficiency and production capacity.
The first application in the fifth factory has been an advanced galvanised main frame (PebHybrid), which will significantly shorten the fabrication period and contribute to a much longer life cycle of the building. In addition, we’ve used special insulation material (PebInsul) combined with the improved Ridge Ventilation system (RV 3.0), resulting in a reduced heat retention of around six degrees, thereby providing a cooler working environment. In addition, the beauty of the entire building is guaranteed with the use of liner panels for its roof and wall (PebLiner).
Please further explain the reasons behind the opening of the fifth factory.
The fifth factory is actually an expansion of PEB Steel’s commitment to invest in Vietnam since 1994. Back then the concept of applying pre-engineered buildings for conventional construction was very new to our customers. Vietnamese people usually bought ready-made steel, which wasn’t optimised and specialised for the latest design and building codes. When we first came here, the industrial buildings such as bonded warehouses and factories were severely lacking in terms of design.
So PEB Steel, with our excellent track record, was one of the first companies that brought the pre-engineered steel buildings technology to Vietnam. Our first project was revolutionary compared to the technological standards that were commonplace 20 years ago and since then, we have built an impressive list of satisfied local and international customers which includes a lot of world-class contractors such as Obayashi, Samsung, and Unilever.
And how about the competition?
There has been competition, as many big international corporations have arrived and brought their systems and machines here. However, with our experience and insight into the business environment in Vietnam, we are very optimistic about long-term development. At the moment, we are still leading the market in terms of shipments, profitability, and liquidity.
How favourably do you view the investment environment in Vietnam?
The fact that PEB Steel has continued to open more factories despite the tough economic climate reveals our dedication and commitment to invest in the country. Indeed, PEB Steel is not the only firm that continued pouring investment into Vietnam this year, a fact which has clearly demonstrated the continued confidence of foreign investors in Vietnam.
Problems and challenges happen on a daily basis, but apparently, what makes us different from other competitors is the ability to adapt with the changing environment and our experience in Vietnam’s business climate. I think that there is lots of room for foreign investment in Vietnam for at least the next 15 years and we want to ensure that when the economy recovers, we are also able to develop.
Vietnam also offers a welcoming environment for foreign firms that wish to establish solid economic growth. For example, the government has recently taken measures to ease difficulties faced by foreign investors during the economic downturn by offering tax incentives. The Vietnamese government is very clever and has done its best to create a favourable investment climate, for which we are very thankful.
We also recognise that the government is shifting their investment appeal concentration from cheap labour-intensive to high technology industries, resulting in the escalating demand for pre-engineered steel buildings. Vietnam is on its way to becoming a manufacturing country, not to mention its good relationships with most countries in Southeast Asia, Europe, and Japan.
Given the currently difficult domestic economy, how has PEB Steel overcome its challenges?
Our approach is the opposite to other companies. While everyone else is cutting costs, we’re opening new offices, giving better salaries and incentives for employees, and spending more on advertising. Manpower is also a key factor leading to the success of a firm. In PEB Steel, we believe that employee empowerment is as important as cost pressures or talent short-ages. To overcome obstacles, we take care of our employees, offer a great workplace environment, entrust responsibility to our staff, and train them properly.
I have been here for 20 years and have realised that to succeed in a country, one must learn and contribute to supporting and modernising that country instead of being critical. We truly appreciate the hospitality of Vietnamese people and we have demonstrated our gratitude through our work. Most of our contracts have signed because the customers can feel how much we love the country and how much we care about the safety and quality of the buildings.
(According to vir.com.vn)