In 2013, the world's second largest gypsumboard producer Knauf announced a 30 million euro investment to build a new gypsumboard plant in Hai Phong. For the first five months of 2014, Knauf Viet Nam has been working hard to establish their business through regional offices and a nationwide distribution network. An interview with Mr. David Victor Thomas, General Director, Knauf Viet Nam was conducted to reveal underlying reasons for this key player to invest heavily in Viet Nam's construction material market.

Viet Nam's construction market has experienced a sluggish growth since 2013. Why do you decide to enter Viet Nam and expand your distribution network under such challenging conditions?

Mr. David Victor Thomas, General Director, Knauf Vietnam Co., Ltd.

Knauf's decision to enter Viet Nam's market should be explained by a thorough look into Knauf Group. Founded in 1932 in Iphofen, Germany by the Knauf brothers Karl and Dr. Alfons, Knauf today is a global leader in the gypsumboard industry with a network of 220 sites in 60 countries globally and employing 24,000 people. The company has an extensive presence throughout Europe, Middle East, Latin/North America and Africa. Presently, Knauf has a very strong focus on the Asian market, leading to the company's decision to enter Viet Nam's market.

Prior to making long-term decisions, we consider a number of key factors including construction market maturity, a country with rapid development and low gypsumboard consumption per capita (0.45 sq.m per person).

Whilst Viet Nam's construction market contracted slightly in 2013, the gypsumboard market experienced a 10% growth. Knauf is optimistic of Viet Nam's gypsumboard market and we believe our products have much to offer the local construction industry.

What are the underlying reasons leading to your decision to co-operate with Duc Nam Co. Ltd as your first-tier distributor in the north of Viet Nam?

Selecting the right distributors is among the most important decisions made by a company. As a family-run business, we consider selecting a distributor similar to inviting someone into our family, so we need to ensure the fit is correct. The key reasons we selected Duc Nam were that they share common relationships with Knauf and customers, and they are an experienced distributor with a strong network of 150 agents and sub-distributors. They have supplied a number of projects like the five-star hotel J.W Marriott (Ha Noi), the National Conventional Center and the Keangnam Tower Ha Noi.

We believe that Duc Nam's 15-year experience in the industry together with Knauf's vision, product quality and service will strengthen both businesses and help to position Knauf as a leading gypsumboard brand in northern Viet Nam.

Being a newcomer to Viet Nam's construction material market where there are already established big names, what is Knauf Viet Nam's plan to position yourself in the market?

That's a good question. We plan to excel in a number of important areas. For example, we need to ensure that we have the best people who are well trained, highly engaged, motivated and add value to customers. We thrive to develop a strong and proactive distribution network able to drive/service the market appropriately. We vision to produce products of consistent quality with our latest German technology.

Knauf Group has a wide range of global building products, of which we will be introducing the best suited to Viet Nam's market. We aim to establish a strong commercial team to work closely with architects, developers and Government departments to introduce new construction systems and solutions to improve Viet Nam's construction standards where possible. We are very keen to get involved in sustainable, green construction methods while adding value to the process from our accumulated experiences.

Our position in the short term is to ensure that we understand Viet Nam's construction industry and work with all key decision makers to help grow and improve the industry and standards. As proof of our long-term commitment to Viet Nam, we are committed to a 30 million euro investment project in the Dinh Vu Industrial Zone, Hai Phing City. We have purchased a long term lease for 45 years and started building our new gypsumboard manufacturing plant that is expected to open by December 2015. We have 2 regional offices, 2 first-tier distributors in the north and the south of Viet Nam. Knauf Viet Nam is now open for business. We are very excited by the opportunities we see in this market. —  VNS