2/3/14 7:46 PM Vietnam's First Billionaire And The Triumph Of Capitalism...
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2/3/14 7:46 PM Vietnam's First Billionaire And The Triumph Of Capitalism - Forbes Page 1 of 8 http://www.forbes.com/sites/michaelnoer/2013/03/04/vietnams-first-billionaire-and-the-triumph-of-capitalism/ 12 Stocks to BUY for 2014 Help | Connect | Sign up | Log in Most Read on Forbes FORBES 3/04/2013 @ 7:31AM | 65,283 views Vietnam's First Billionaire And The Triumph Of Capitalism This story appears in the March 25, 2013 issue of Forbes. This is a guest post by Lan Anh Nguyen, editor of Forbes Vietnam. On a brilliant morning last October Dong Khoi Street, the premier commercial thoroughfare in Saigon, was closed for nearly two hours to celebrate the opening of Vincom Center A, a precisely, if infelicitously, named shopping center. The development was remarkable, not just for its scale (410,000 square feet of commercial space; three floors of underground parking; a 300-room, five-star hotel) or for its high-end tenants (Versace, Hermès, Dior) but simply because it was opening at all. Vietnam’s real estate market had been frozen hard since crashing in 2011, with at least 13.5% of the country’s $10 billion in real estate loans having gone bad. But Pham Nhat Vuong , the man most responsible for this $500 million commercial triumph in the heart of what is still officially called Ho Chi Minh City, wasn’t drinking any champagne, cutting any ribbons or giving any speeches. Rather, the 44-year-old quietly watched the ceremony from a front- row seat. “I prefer sipping happiness by myself,” Pham explains later, in a rare interview from his elegant new offices in Hanoi’s Vincom Village, another of his projects. Pham’s given name translates as “prosperity,” and he is often described as the NEWS People Places Companies Michael Noer Forbes Staff Follow (359) I'm the Executive Editor of Forbes magazine. I read, write and think for a living, can mate you in less than 30, but can't break 100 for the life of me. You Follow (359) Michael Noer, Forbes Staff I read, write and think for a living. 8.4k Follow Follow + show more Why Toy Startup GoldieBlox's Historic Why Toy Startup GoldieBlox's Historic $4 Million Super Bowl Ad Win Matters $4 Million Super Bowl Ad Win Matters +75,286 views Congratulations To Seattle Seahawks Congratulations To Seattle Seahawks Coach Pete Carroll, The NFL's Greatest Coach Pete Carroll, The NFL's Greatest Failure Failure +70,472 views '24: Live Another Day' Wins The Super '24: Live Another Day' Wins The Super Bowl With Its Debut Teaser Bowl With Its Debut Teaser +70,438 views Seahawks QB Russell Wilson Is A Super Seahawks QB Russell Wilson Is A Super Bowl Champion And A Future $100 Bowl Champion And A Future $100 Million Man Million Man +64,304 views 10 Ways Companies Drive Away Talent 10 Ways Companies Drive Away Talent +59,469 views 2.0k 240 Tweet Tweet 92 0 47 84 41 comments, 40 called-out Comment Now Follow Comments New Posts New Posts +1 posts this hour +1 posts this hour Most Most Popular Popular Worst Super Bowl Ads Ev Lists Lists Most Promising Com Video Video 30 Under 30
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Transcript of 2/3/14 7:46 PM Vietnam's First Billionaire And The Triumph Of Capitalism...
2/3/14 7:46 PMVietnam's First Billionaire And The Triumph Of Capitalism - Forbes
Page 1 of 8http://www.forbes.com/sites/michaelnoer/2013/03/04/vietnams-first-billionaire-and-the-triumph-of-capitalism/
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FORBES | 3/04/2013 @ 7:31AM | 65,283 views
Vietnam's First Billionaire AndThe Triumph Of CapitalismThis story appears in the March 25, 2013 issue of Forbes.
This is a guest post by Lan Anh Nguyen, editor of Forbes Vietnam.
On a brilliant morning last OctoberDong Khoi Street, the premiercommercial thoroughfare in Saigon,was closed for nearly two hours tocelebrate the opening of VincomCenter A, a precisely, if infelicitously,named shopping center. Thedevelopment was remarkable, notjust for its scale (410,000 square feetof commercial space; three floors ofunderground parking; a 300-room, five-star hotel) or for its high-end tenants(Versace, Hermès, Dior) but simply because it was opening at all. Vietnam’sreal estate market had been frozen hard since crashing in 2011, with at least13.5% of the country’s $10 billion in real estate loans having gone bad.
But Pham Nhat Vuong, the man most responsible for this $500 millioncommercial triumph in the heart of what is still officially called Ho Chi MinhCity, wasn’t drinking any champagne, cutting any ribbons or giving anyspeeches. Rather, the 44-year-old quietly watched the ceremony from a front-row seat. “I prefer sipping happiness by myself,” Pham explains later, in a rareinterview from his elegant new offices in Hanoi’s Vincom Village, another ofhis projects.
Pham’s given name translates as “prosperity,” and he is often described as the
NEWS People Places Companies
Michael NoerForbes Staff
Follow (359)
I'm the Executive Editor of Forbes magazine. I read,write and think for a living, can mate you in lessthan 30, but can't break 100 for the life of me. You
Follow (359)
Michael Noer, Forbes StaffI read, write and think for a living.
8.4kFollowFollow
+ show more
Why Toy Startup GoldieBlox's HistoricWhy Toy Startup GoldieBlox's Historic$4 Million Super Bowl Ad Win Matters$4 Million Super Bowl Ad Win Matters+75,286 views
Congratulations To Seattle SeahawksCongratulations To Seattle SeahawksCoach Pete Carroll, The NFL's GreatestCoach Pete Carroll, The NFL's GreatestFailureFailure +70,472 views
'24: Live Another Day' Wins The Super'24: Live Another Day' Wins The SuperBowl With Its Debut TeaserBowl With Its Debut Teaser +70,438 views
Seahawks QB Russell Wilson Is A SuperSeahawks QB Russell Wilson Is A SuperBowl Champion And A Future $100Bowl Champion And A Future $100Million ManMillion Man +64,304 views
10 Ways Companies Drive Away Talent10 Ways Companies Drive Away Talent+59,469 views
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2/3/14 7:46 PMVietnam's First Billionaire And The Triumph Of Capitalism - Forbes
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Vietnamese Donald Trump. He’s now also the firstbillionaire in the history of Vietnam–FORBESestimates that he’s worth $1.5 billion based largelyon the 53% stake he owns (both indirectly anddirectly) in Vingroup, his real estate developmentfirm and the fifth most valuable company on theVietnamese stock exchange.
Still, Vietnam remains saddled with hundreds ofinefficient state-run enterprises, rampantcorruption and bouts of runaway inflation. The 8%-a-year growth of a decade ago is a distant memory,and an austerity policy is in full effect. Yet Pham’sstory personifies the post-Vietnam War story of thisnation, a capitalistic achievement in a country thatremains, nominally, communist.
PHAM WAS BORN IN HANOI in 1968, the sameyear as the Tet Offensive, the most momentous yearin the war that still shapes Vietnam today. Hisfather served in the North Vietnamese air defenseforce; his mother ran a sidewalk tea stand. Whilethe North won the war and united the country, theylost the economic battle; the national finances werein ruins, and the country’s leaders were married torigid five-year plans, with few allies outside ofSoviet Russia. Pham’s family at one point survivedsolely on his mother’s meager earnings. “My dreamat the time wasn’t big,” says Pham. “I just wanted tosupport my family.”
Pham escaped his circumstances through books. Heproved himself something of a math prodigy,earning a scholarship to study the economics of rawmaterial extraction at the Moscow GeologicalProspecting Institute. Just as the timing of his birthwas fateful, so was his 1993 graduation. Thecollapse of the Soviet Union had given way to a swirlof chaos, crime–and opportunity. And back home,Vietnam had begun experimenting with Doi Moi , ormarket-based reforms within the ongoing socialiststructure.
After marrying his college sweetheart Pham decidedto remain abroad to try to take advantage of post-Soviet opportunities. The young couple made theirway to another nation struggling in its capitalistic
infancy, Ukraine. Pham’s first venture harkened back to his mom’s tea stand:After scraping together $10,000 from family and friends, he opened aVietnamese restaurant in Ukraine. Sensing a demand, he also began making
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and drying ramen noodles using a production line he imported from Vietnam.The concept of instant noodles was completely new to Ukrainians–and aninstant hit. Recalls Pham, “Ukrainians were very poor–and very hungry.”
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So Pham took a risk: Rather than run a small noodle shop, he bet everythingby borrowing money at a criminally high interest rate–8% a month–andexpanding his production to the dehydrated mixes that Vietnamese chefstraditionally use to season noodle soup. He primed the virgin market byproducing a half-million small packages and giving them away withVietnamese-themed calendars.
The locals quickly became hooked on flavored instant noodles, and Phambecame Ukraine’s processed-food king. By 2010, when he sold the companyfor an estimated $150 million to Nestl?, Pham’s noodle company, Technocom,had revenues of $100 million.
This highly unconventional post-Soviet success story was about to get a twist.For years Pham had been slowly funneling the money from his Ukrainenoodle empire back into projects in his homeland, in an attempt to create aneven bigger post-communist fortune.
PHAM’S VIETNAM FORAY had started innocently enough. At the turn of themillennium he took a trip to the beach city of Nha Trang. The economy wasbooming: Vietnam had dodged the 1997 Asian Financial Crisis, normalizedtrade relations with the U.S. and reaffirmed the economic role of the privatesector. Between 2000 and 2006 Vietnam’s GDP would grow–albeit from asmall base–at least 6% each year.
Feeling the lift, Pham figured he’d engage in a small local project. Why notturn the undeveloped island just off the coast and develop it into a luxuryresort? The result was the 225-room, ultraluxe Vinpearl Resort Nha Trang.
Again Pham found quick success. The next year he introduced Vincom CenterBa Trieu, the first commercial tower complex in Hanoi. Three years later headded 260 more rooms to Vinpearl, along with a 2-mile cable car connectingthe island to the mainland. He followed with several high-end townships inHanoi, including Vincom Village, a luxury development with hundreds ofvillas. Vincom, comprising his commercial and residential real estateinterests, went public in 2007, while he maintained Vinpearl as a separatecompany for his luxury resort business. Last year Pham merged the twocompanies to create Vingroup.
As his wealth grew, so did Pham’s reputation. While he has acquired a few ofthe trappings of a billionaire–a beautiful mansion nestled between man-made
2/3/14 7:46 PMVietnam's First Billionaire And The Triumph Of Capitalism - Forbes
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hills in Vincom Village, a Bentley, his own charitable foundation–by allaccounts he lives modestly, watching martial arts movies rather than toolingaround in his luxury car and sticking with vacations at his own resort in NhaTrang. Yet as someone who had made money in eastern Europe, stories havealso abounded about shady connections and crooked money. Pham, whoremains youthful and energetic, simply shrugs. “According to the rumors, I’vedied at least four times in the last year,” he says. “First story: Moscow killersflew in and shot me to death. Second story: I visited Moscow and was shot todeath by Russian mafia. Third story: I was shot in Ukraine. Last year I didn’teven visit Ukraine or Russia! The most recent story: I have died because ofcancer. I am doing this well, and they said I got cancer!
“So as a saying goes, ‘The dogs bark, but the caravan goes on.’ I just need tofocus on what I do.”
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2/3/14 7:46 PMVietnam's First Billionaire And The Triumph Of Capitalism - Forbes
Page 5 of 8http://www.forbes.com/sites/michaelnoer/2013/03/04/vietnams-first-billionaire-and-the-triumph-of-capitalism/
This guy is a son of a communist. From there draw your own conclusions.
They (the communists) steal the money (rampant corruption) from the people and builttheir own fortune, send their kids to school in America, Australia or Europe.
Reply
He is the pride of Vietnamese people.
Reply
This sounds like envy… This man build his own business, used no money fromothers. The only thing i feel for this is respect.
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Anon 10 months ago
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Xoan Kitty 10 months ago
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Tony Simon 10 months ago
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2/3/14 7:46 PMVietnam's First Billionaire And The Triumph Of Capitalism - Forbes
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Nothing wrong with being the son of a communist. The U.S owed China over a$1 trillion, and every U.S companies is in China making or profiting offcommunists Chinese. Anon, sounds to me like another South Vietnamese Phoowner living in America. I’ll be pissed off too if I was forced to sales Pho for aliving.
Reply
You obviously know nothing. Pho owners in America are rich. I’d be more thanhappy to peddle Pho. First of all, I wonder how can there be billionaires incommunist countries. What happened to even distribution of wealth amongcomrades that is eschewed by communism, as opposed to a rich classcontrolling most of the wealth and everyone else working for them? There isnothing to be proud of to be living in one of the most corrupt countries in theworld, where the average monthly wage of less than $200. The guy selling Phoin America is so better off not having to drink bottled water or avoid eating rawvegetables at every meal.Anon is stating a widely held belief. Choose to ignore it if you want. If theaverage monthly wage is $200, who in Vietnam can afford to send their kids toAmerica? Duh, it probably helps that he is the son of a communist. In whatcountry does not having connections help?
Reply
Hero or Criminal?
Reply
So Pham took a risk: Rather than run a small noodle shop, he bet everything byborrowing money at a criminally high interest rate–8% a month LOL 8% a month
Reply
Pity they aren’t investigative Journalists to see the move from noodle shop to Billionaireand money laundries for Russian Mafia.
Please for my safety don’t let anyone find a link to my name.Rob
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As the article said, there are a lot of rumors regarding famous people.
As far as I know, he is a very good businessman.
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yousucks 10 months ago
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Guest 10 months ago
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Benjamin Ngo 10 months ago
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Thai Hoang 10 months ago
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2/3/14 7:46 PMVietnam's First Billionaire And The Triumph Of Capitalism - Forbes
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I agree. A lot of rumors regarding famous people.
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