Santomas caters to rising demands
Santomas caters to rising demands
Malaysian-backed Santomas Vietnam JSC last week broke ground on its third plant in VSIP Bac Ninh. VIR’s Bach Quang talks with chairman and CEO Chua Ah Lay on the firm’s robust expansion and innovations to stay competitive.
What prompts Santomas Vietnam to build its third plant in Vietnam after nearly 15 years of establishment?
Santomas Vietnam’s main activities are manufacturing of precision plastics gear and precision plastic parts for cameras, office automation equipment, automotive unit components, and other electronic consumer products. Among our key customers are Canon, Brother Vietnam, and Kyocera Vietnam.
We commenced operations in January 2003, with a low business volume until the end of 2004. We started the first stage of print components and parts business expansion in 2005 – lasting until October 2008. The world’s printer demand was in a peak period then, with nearly 90 million inkjet printers in 2007. Our business was slightly affected by the financial crisis of 2008.
However, we were able to adjust our business strategy in 2009 and 2010. We entered our second stage of business expansion from 2011 until 2015, during which business profitability has been on an upward trajectory.
This year onwards shall be the beginning of our third stage business expansion with our third factory construction set to be completed in June 2017. This plant, located on a 3.4ha area, is bigger than the first and second plants.
Vietnam, with a huge population and increasing disposable income, has the potential for enormous demand for automotive components. Thus, in the future our third plant might not only meet the demands of the electronics industry, but also cater to the automotive industry. We will prepare for another expansion in five or 10 years, given this anticipation.
How do you evaluate the prospects of supporting industries in Vietnam, given the big presence of global manufacturers like Samsung, Canon, Intel, and LG, and the upcoming enforcement of free trade agreements like the Vietnam-EU FTA, as well as the formation of the AEC late last year?
Santomas Vietnam is a pioneering foreign-invested support company, having established itself in early 2000.
Foreign-invested companies started to come to Vietnam in big numbers from 2006 through 2008. These are the main supporting companies for the big global manufacturers in Vietnam, as they aimed to have made-in-Vietnam parts and components for localisation within a 10-15 year period.
Meanwhile, Vietnamese companies started entering the market for foreign manufacturers in early 2012 and are still in the learning stage. It takes 10-15 years of exposure to gain the technical and quality expertise required by the foreign manufacturers.
The FTAs and the formation of the AEC are certainly helpful for Vietnam’s supporting industries in the long term.
Electronics is a fast-changing industry in terms of technology. The recent downsizing of some business lines of global firms like Nokia, Toshiba, and Panasonic shows that competition in the electronics industry is tougher than ever. Given that Santomas Vietnam is a parts supplier, how has your firm invested in making innovations to stay competitive?
Electronics products require many plastic parts and components. The plastic parts and components are different in precision dimension tolerance and appearance definition. Santomas Vietnam specialises in precision dimension tolerance plastic parts, especially precision plastic gears and plastic parts which require high technical manufacturing processes and moulding tools for their manufacture.
Santomas Vietnam has technical expertise, and we are always upgrading our technical know-how and manufacturing process innovation to stay competitive.
Your firm plans to list on the Hanoi Stock Exchange. What are the reasons behind this plan and how is the plan being implemented?
Santomas Vietnam is currently a public company with an 84.5 per cent stake owned by Santomas Malaysia.
We applied to list on the Hanoi Stock Exchange in 2015. We expect we will list starting from December of this year. The intention to list is to provide opportunities for all Vietnamese public investors to access Santomas Vietnam’s profit growth and investment value growth in the long term.
What is your method for making a successful business in Vietnam?
The simple method for successful business that Santomas Vietnam has followed is contained in two commitments. Regarding customers, we always provide the best quality products and services at competitive cost. We also ensure an on-time delivery schedule and prompt customer service response.
For employees, we offer a stable and long-term employment environment, on-going job training and career development, and encourage employees’ own ideas and innovative thinking.
