Steelmaker Hoa Sen’s chairman: 'I don’t leave any property to my children'

By Phuong Dong   March 14, 2023 | 05:00 am PT
Steelmaker Hoa Sen’s chairman: 'I don’t leave any property to my children'
Le Phuoc Vu, chairman of steelmaker Hoa Sen Group, at its annual meeting on March 10, 2023. Photo courtesy of HSG
Hoa Sen Chairman Le Phuoc Vu said that after three years of pondering what to do with his VND1.6 trillion (US$67.8 million) in shares, he decided to donate his fortune to a non-profit.

At Hoa Sen Group’s annual meeting on March 10, Vu renewed his vow to leave the steel-making company to become a Buddhist monk in 2026.

He said at the point he would no longer involve himself in business activities, but could still be a spiritual leader to Hoa Sen.

Two years ago, he said becoming a monk had been his dream since the age of 30, and nothing was going to change.

He has already built a temple in the central highlands province of Lam Dong as part of realizing his wish.

"Four years from now, I’ll be a monk. I must keep the Buddha’s precept of no possessions. So for the past three years, I’ve struggled to solve the inheritance problem and choose the future leader of Hoa Sen," Vu said.

The solution to transfer all his shares in his name to the non-profit foundation Dai Tung Lam Hoa Sen has led to him being named its honorary chairman.

As of Jan. 31, Vu has been Hoa Sen’s largest shareholder with nearly 102 million shares, equivalent to 17.02% of the company’s capital. His shares’ total market value is some VND1.6 trillion ($67.8 million).

Regarding Vu’s descendants and relatives, he said that if they are "people of morality, integrity, goodwill, service, and humility," they would be appointed to the foundation’s executive board and receive decent remuneration.

"I don’t leave any property to my children because I want them to understand that earning money is toiling and moiling, so they will appreciate the value of labor, and empathize with the poor," he said.

Regarding the issue of succession, Vu is confident that the current leadership of Hoa Sen is able to carry out his strategic intentions and vision of transforming it from a manufacturer of steel sheets and plastic pipes into a distributor of building materials and interior decorations.

Vu does not appear often at the company. At the meeting on March 10, he repeatedly asked the executive board to update the progress of implementing the Hoa Sen Home building materials retail chain - a project he called "his last effort" before leafing the company.

According to Vu, the worst period for both the steel industry and Hoa Sen has ended. However, steel exports may be unstable in the context of increasing competition and trade barriers.

Tightening monetary policies, raising interest rates, and fluctuating exchange rates also can negatively affect Hoa Sen’s production and business.

"The good news is that in February, our company’s net profit was some VND50 billion," he said.

Hoa Sen Group expects a modest after-tax profit of VND100-300 billion this year as a raft of potential pitfalls loom.

Whichever figure it achieves will be the lowest in the last 10 years, mainly due to anticipated export difficulties.

According to the first scenario envisioned by Hoa Sen, the company will post sales of 1.4 million tons of finished products, with revenues of VND34 trillion, and after-tax profits of VND100 billion.

With a more optimistic scenario of selling 1.5 million tons of finished products, the company expects to gain VND36 trillion in revenue and VND300 billion in profit.

In the last 10 years, the lowest profit target the company has ever set is VND400 billion and the highest is VND1.65 trillion.

Hoa Sen reported after-tax losses of VND680 billion from October to December 2022, the first quarter of this fiscal year.

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