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LIXIL redefining corporate culture through transformation

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Satoshi Konagai, leader of LIXIL Water Technology – APAC. — Photo courtesy of LIXIL

LIXIL, a global leader in housing and building materials, and known in Viet Nam as a provider of global brands such as American Standard, GROHE, INAX and TOSTEM, has been able to nimbly adapt and transform during the COVID-19 pandemic. Satoshi Konagai, leader of LIXIL Water Technology – APAC, spoke to Việt Nam News about its growth strategies in the country and around the region.

What activities did the corporation undertake during the pandemic?

Last year was an interesting year for us all and I believe we have learnt a lot from dealing with this unprecedented pandemic, which has affected markets globally. Yet, we remained focused on our medium-term plan, which involved improving profitability and transforming the organisation to be more agile, entrepreneurial, and resilient to achieve sustainable growth – which are ever more relevant in these unprecedented times.

Most importantly our purpose-driven approach, focusing on pioneering water and housing products that solve everyday, real-life challenges, has contributed to our consumers’ health and hygiene. With COVID-19, the entire world is focused on hygiene, and that is what LIXIL already does better than most. LIXIL has responded to this major macro trend of health, wellbeing and multi-purpose living space by focusing on retail and accelerating development for touchless faucets and flushing, antibacterial finishes, water filtration, bidets, and shower toilets.

During the pandemic, we continued to build a platform-based, global product pipeline worth US$1 billion in sales across all our brands. This was key for us given the increased renovation demand with people now spending more time at home and using it for more and more daily functions like work, family time, exercising, cooking and other hobbies.

LIXIL’s products focus on pioneering water and housing products that solve everyday, real-life challenges, contributing to consumers’ health and hygiene. — Photo courtesy of LIXIL

How do you improve your business fundamentals in these trying times, and what is the main focus moving forward into a new normal?

At LIXIL, our purpose of making better homes a reality for everyone, everywhere requires a deep understanding of consumers – how they live and what they expect from their living spaces. And by fully understanding the evolving consumer needs as well as the importance of being data-driven, we took actionable steps to focus on LIXIL’s core businesses and to simplify our business structure, enabling our approximately $14 billion global corporation with operations across more than 150 countries to further drive growth.

We have a new ‘go-to-market’ strategy serving as a starting point for a comprehensive approach that will reinforce our industry leadership by moving away from a one-size-fits-all approach. New product launches are also specific to customer groups (consumer/professional) and their needs and preferences. 

We have also invested in technology, such as intuitive IoT-backed products, to bring not only better designs but also optimum hygiene, enhanced comfort and convenience.

GROHE Sensia Arena stands for intelligent care: enjoying innovative functions that are tailored to your personal needs.

Due to the effects of the pandemic, we are striving to put across the importance of hygiene, wellbeing and sustainability, especially when it comes to hospitality. Increased levels of hygiene will be a more fundamental expectation from consumers, and decisions by consumers on where to book will be influenced by the availability of touchless solutions and generally safer experiences, and so it is important to offer bathroom solutions that offer peace of mind.

There will also be an increased willingness by consumers post-pandemic to pay more for a luxury wellbeing experience that feels vastly different to home. With that in mind, we can place enhanced focus on sustainability through reduced water consumption, while maintaining the same strict levels of performance and cleanliness.  

What can the power of culture and purpose-driven approach bring about?

At LIXIL, our people are our biggest strength. Hence, we have embarked on a journey of transformation towards a more agile and empowering work culture. As an important first step in this journey, LIXIL decided to adopt a common, simple and unifying title of ‘Leader’.

LIXIL has redefined corporate culture through transformation towards a simpler, more empowered and non-hierarchical culture. This is a highly significant milestone. What’s important is the actual work individuals are responsible for, not the title or rank they carry. We are focused on strengthening agile, team-based work. Teams create value for the organisation by capitalising on the collective strengths and diversity of thought, which will be made possible when we have an environment that does away with deference to hierarchy, fear of consequences, and lack of transparency. We want the best ideas to win, rather than a person’s rank. My leadership team and I are committed to making this change a meaningful one.

This change in titles to ‘Leader’ is a visible change that will remind us every day of the promises we are making to ourselves and to all stakeholders – that what we do matters more than who we are, that everyone’s voice matters, that a leaders’ job is first and foremost to empower. This is how we deliver better in line with our mission, and continue to inspire and improve living and working solutions that touch the lives of 1 billion people every day.

There will be more willingness by consumers post-pandemic to pay more for a luxury wellbeing experience that feels vastly different to home. — Photo courtesy of LIXIL

What are the priorities in Việt Nam for the group?

Việt Nam is a fast-growing vital market for LIXIL in the APAC region, and in 2021 we will continue to build resilience and agility to cater to partners, developers, professionals and consumers with our latest innovations, creating better homes for everyone, everywhere. 

LIXIL is present in the Vietnamese market with our industry-leading brands American Standard, GROHE, INAX and TOSTEM, covering a wide range of bathroom, window and door product categories across all market segments, from the luxurious to the basic ends of the spectrum, while catering to different lifestyle preferences and local tastes. Already in Việt Nam for more than 25 years, INAX is one of the most important brands in the Vietnamese market, and launched in late 2020 the S200 Series – maximising comfort and functionality within compact urban bathroom spaces.

The INAX S200 LINE bathroom collection reflects the brand’s design values of essence, sophistication and thoughtfulness to transform the bathroom experience.

We believe we need to, and can, change perceptions of how bathrooms are used in this country, which is especially important post-pandemic. It is the correct time to change mindsets from those that think a bathroom is solely a simple and necessary function. Hygiene is ever more prevalent in people’s minds, even in a country that has prevented large outbreaks, and so it is right to focus on improving hygiene – and that starts at home.

This is our approach to staying fully committed to transforming the way Vietnamese consumers approach their living spaces and making better homes a reality for them, while balancing business needs to not only ensure business continuity but business growth amidst external challenges and disruptions. —

Source: https://vietnamnews.vn/economy/business-insight/926562/lixil-redefining-corporate-culture-through-transformation.html

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Citizens, businesses hurt as rising prices raise inflation concerns

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Citizens, businesses hurt as rising prices raise inflation concerns

A butcher cuts meat in a market in Ho Chi Minh City. Photo by VnExpress/Thi Ha.


Experts say the government will find it difficult to rein in inflation this year as surging food and materials prices hurt citizens and businesses.

Loan and her husband in HCMC’s District 5 spent around VND120,000- 200,000 ($5.22-8.70) per day last month on feeding their family of three, almost double that of the same time last year. They say the prices of vegetables and meat have been increasing since the beginning of the year.

Hoa, another HCMC resident, has seen her spending on family meals increase by 65 percent to VND5 million per month. She says the prices of cooking gas and many ingredients she needs have been rising.

“The prices of some products have doubled since the beginning of the year. I’m spending out of my savings.”

Ngoc Chau, head accountant for a construction company in Tan Binh District, has seen prices of a bowl of noodle soup rising nearly 20 percent to VND65,000 the past few months.

“I have been reluctant to eat out these days.”

In the first four months of this year, the prices of materials and ingredients have risen by 4.64 percent year-on-year, with the surge strongest in the agriculture, forestry and fisheries sector, up 6.77 percent, according to the General Statistics Office.

The GSO has cautioned that although inflation was 0.29 percent in the first quarter, the lowest in 20 years, keeping it under the targeted 4 percent this year won’t be easy as many economies including the U.S. have introduced economic stimuli to boost recovery.

The Ministry of Agriculture and Rural Development said that animal feed prices have surged 30 percent since the beginning of the year and is set to rise further in the second quarter.

Fuel prices, meanwhile, have increased by 19 percent since the beginning of the year.

Do Van Khuoi, director of supplies at Saigon Food, said that prices have been rising due to limited supply of goods domestically and shortage of materials globally.

There are signs that some suppliers are increasing their reserves to indulge in speculative pricing, he added.

“Disrupted supply chains due to difficulties in transporting goods amid the pandemic have also pushed up prices.”

Khuoi said that in recent months, the prices of spices have risen by 5-10 precent, rice and seafood by 5-20 percent and material for plastic production by 15-70 percent.

A spokesperson for food processor Vissan also said that many food companies were facing “headaches” because of rising material prices. Some suppliers have requested a 15 percent increase starting this month.

Most businesses say they are trying to look for alternative sources of materials and ingredients to lower prices.

Authorities have also been working to stabilize prices.

Pham The Anh, head economist of the Vietnam Institute for Economic and Policy Research (VEPR), said that Vietnam and many other economies face high risks of rising inflation this year as prices of some products like steel and fuel have been surging at around 20-30 percent.

Economist Nguyen Duc Thanh said that authorities are facing difficulties in controlling inflation, as keeping prices low will hurt businesses which are already hit by the Covid-19 pandemic, while allowing prices to rise will hurt low-income people.

The domestic department market under the Ministry of Industry and Trade said it has been working with businesses to ensure adequate supply to keep prices from surging suddenly.

It has also been working with customs and agriculture authorities to ensure the stable delivery of goods, especially between localities with a high number of Covid-19 cases.

Deputy Prime Minister Le Minh Khai has also ordered relevant government bodies to take keep fuel prices stable.

Source: https://e.vnexpress.net/news/business/economy/citizens-businesses-hurt-as-rising-prices-raise-inflation-concerns-4279567.html

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Great opportunity for Vietnam’s semiconductor industry

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The scarcity of chip supply that began in late 2020 has affected most manufacturing industries.

In 1970-1980, late professor Tran Dai Nghia cherished a plan to build a semiconductor industry in Vietnam. He ordered a production line of Thomson-CFS (the predecessor of Thales Group, France), but due to poor infrastructure, supporting industries and logistics at that time, his efforts were unable to deliver the desired results.

Later, Dr. Dang Luong Mo (a reputable Vietnamese scientist in the microchip field in the world) also gave many enthusiastic proposals and projects with the desire to build a foundation for the microchip industry in Vietnam, but the results were modest. However, his research works have contributed to opening a new direction for the fledgling microchip industry in Vietnam.

From the constantly increasing demand of the global supply chain, the semiconductor sector has become more exciting and has become a field that receives a lot of favor. When manufacturing industries slowed down due to the current shortage of microchip supply, new opportunities for Vietnam opened up, and the semiconductor industry is now forecast to enter a new “golden time”.

Semiconductors account for a large proportion in export turnover of high-tech goods.

In recent years, the Vietnamese electronics industry has grown into the country’s most important industry. The total export turnover of these commodity groups in 2020 amounted to US$95.8 billion, equal to one third of the total export turnover of Vietnam.

Currently, Vietnam ranks 9th globally in the field of electronics exports.

Statistics from the General Department of Customs show that, for 2020, exports of telephones and components reached $51.18 billion, a slight decrease of 0.4% compared to 2019. Of which, export revenue from China was $12.34 billion, up by 48.8%; the EU – $10.06 billion, down 18.6%; the US – $8.79 billion, down 1.2%; South Korea – $4.58 billion, down 11% from the previous year.

For computers, electronic products and components, the export value reached $44.58 billion last year, up 24.1% compared to 2019. Specifically, the Chinese market accounted for $11.09 billion, 16% increase compared to 2019; the US market with $10.39 billion, up by 71.7%; the EU with $6.51 billion, up 28.7%; Hong Kong – $4.19 billion, up 38.2%.

In December 2020 alone, the export value of mobile phones and components hit $4.61 billion, up 4.6% over the previous month. With an impressive growth rate of 11.9%, computers, electronic products and components reached $2.31 billion of export turnover in the same period.

It is said that in the era of IoT (Internet of Things), market demand for products in the semiconductor industry will be very high.

Cơ hội lớn cho công nghiệp bán dẫn Việt Nam-1

The era of IoT opens new opportunities for Vietnam’s semiconductor industry.

According to Research and Markets forecasts, the global Industrial IoT (IoT) market is expected to reach $263.4 billion by 2027, with at an annual growth rate of 16.7% in the period 2019-2027. With about 7 billion devices connected via the Internet in the next 2 years, this number could increase many times by 2025, according to Dr. David Bray, CEO of People Centered Internet (USA).

Dr. Bray also said that this is an opportunity for Vietnam to leapfrog not only in Southeast Asia but also in the world in the field of IoT. semiconductor industry will be an important platform because all IoT devices are chip-dependent. In the current global chip crisis, semiconductor factories are seeking an “escape” from China, and Vietnam can become an ideal destination for technological eagles to “nest”.

Is Vietnam the ideal destination for semiconductor investors?

In Vietnam, the semiconductor industry is considered a platform to support and promote the development of other industries, contributing to economic development in depth. This is an economic sector determined by the Government to have products in the list of 9 national products and is an important way to convert scientific and technological achievements into high value-added commercial goods.

Currently, with the influence of the 4.0 industrial revolution, the semiconductor market in developing countries is also growing strongly. In particular, Vietnam is known as an emerging market in Asia, highly appreciated by analysts and foreign enterprises with great potential for development. The increase in consumption demand is the direct cause of the strong growth of Vietnam’s semiconductor factories, attracting investment from many foreign corporations in recent years.

In the Government’s Action Program to implement the Politburo’s Resolution No. 23-NQ/TW dated March 22, 2018 on a national industrial development policy to 2020, with a vision to 2045, the Ministry of Information and Communications was assigned to submit to the Prime Minister for approval a program to develop the information technology, electronics – telecommunications industry to 2025, with a vision to 2030.

In particular, the Ministry is assigned to propose mechanisms and policies to prioritize development of a number of areas: software, digital content, hardware, and electronics – telecommunications at the world’s advanced level, meeting the requirements of the 4. 0 Industrial Revolution; and mechanisms and policies to increase the added value of domestic enterprises in the global value chain.

Will the semiconductor industry enter a new “golden age”?

Cơ hội lớn cho công nghiệp bán dẫn Việt Nam-2

Thanks to the policy and legal corridors that facilitate the investment and development of high-tech products, the semiconductor chip sector has become a top priority. Industrial parks and high-tech parks in Hanoi, Ho Chi Minh City, Da Nang, Thai Nguyen, Bac Ninh and Bac Giang… with favorable geographical location and abundant human resources have become attractive destinations for investors.

Most recently, Intel Products Vietnam Company (IPV, under Intel Corporation, USA) received a project adjustment investment certificate with an additional investment of $475 million to build the most modern chip test and assembling facility in the Ho Chi Minh City Hi-Tech Park (SHTP), bringing the total investment capital of Intel in Vietnam to $1.5 billion.

Samsung HCMC CE Complex (SEHC) has just been approved to shift from a high-tech enterprise to an export processing firm, which creates favorable conditions for supporting businesses in the supply chain of Samsung, especially those in the semiconductor industry.

The project of SNST & Finger Vina (South Korea), with the goal of designing integrated electronic circuits, with total investment of nearly $1 million, was put in operation in the first quarter of 2021.

Thus, the semiconductor industry in Vietnam has strong momentum to become a spearhead economic industry, in line with the global digital transformation trend today.

Diep Luu

Source: https://vietnamnet.vn/en/feature/great-opportunity-for-vietnam-s-semiconductor-industry-726566.html

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Is interbank rate climb worrisome?

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Interest rates are the most important focus of attention this year as many believe after a year implementing the loose monetary policy, the authorities concerned are going to tighten them.

 Will the recent surge in interest rates on the interbank money market (Market 2) exert adverse effects on the market between banks and their corporate and individual clients (Market 1)?

Is interbank rate climb worrisome?
When it comes to capital inflows, banks have considerably built up their charter capital in recent years and set out plans for drastic capital hike this year. – SGT Photo: Tran Ngoc Linh

Interest rates on the Interbank market, the channel allowing banks to lend and borrow money among them, suddenly surged in late April. More precisely, the overnight rate climbed to 1.2% per annum, the highest during this past year. Such a level is also nearly three times higher than in the preceding week, 4.5 times higher than in the beginning of the month and 100 basis points higher than in early this year.

Similarly, the interest rates for the one-week, two-week and one-month terms picked up 100-120 basis points against the beginning of the year, and 2.5-3.5 times greater than in early April. The hike worries quite a few people as they fear the liquidity pressure in the banking system is returning and the interest rate rise may send its ripple effect to Market 1, which means that banks may start to revise up their deposit rates again.

According to analysts, interest rates are the most important focus of attention this year, as many believe after a year implementing the loose monetary policy, the authorities concerned are going to tighten it. Recent reports by several institutions also forecast interest rates may start to rise again in the second half of this year, as a number of countries are showing signs of beginning their tightening monetary policy.

As per statistics of the General Statistics Office, credit growth in the banking industry as of March 19 was 1.47%, 2.7 times higher than the rate of only 0.54% in capital mobilization. The most up-to-date credit growth figure was 3.34% in mid-April, which might mean the demand for loans has further risen and the growth in deposits until now has probably failed to keep pace with the credit growth rate.

If this trend continues, it is inevitable that the system’s liquidity will further decline. If this is the case, one cannot rule out the possibility of banks competing for deposits once again. However, there are still factors that help stabilize interest rates, while the recent rise of interbank interest rates is probably just temporary.

Prior to any long holiday, interest rates on Market 1 often grow rapidly as banks are in need of capital to meet their liquidity safety and short-term solvency ratios. They will later slide back.

For example, in the latest surge, although the lending rates in Market 2 increased sharply for the shorter terms, there was hardly any change in the rates for the three-month, six-month and nine-month terms compared to the beginning of the month. Moreover, they even significantly went down against the beginning of the year. Therefore, if this demand for liquidity is only temporary, it will probably not exert any pressure onto the bank-to-customer market. 

Interest rates supporters

Meanwhile, at present and in the immediate future, there are factors that help interest rates remain stable as mentioned above. The first is inflation is still at a low level, evidenced by the fact that the consumer price index (CPI) in April recorded the second consecutive month of reduction compared to the preceding month, with a slight decrease of 0.04%. So far, the CPI has only picked up 1.27% against the beginning of the year and 2.7% year-on-year, far from the target of 4% for the whole year.

Notably, from the third quarter onward, a handsome sum of the dong will possibly be pumped out from the six-month foreign currency sales contracts that commercial banks signed with the State Bank of Vietnam (SBV) early this year. That amount of money may help stabilize the liquidity of the dong in the system. In recent years, the volume of the dong pumped out via the foreign currency buying activities carried out by the SBV has played a key role in supporting the liquidity of the system.

Faced with accusations of currency manipulation by the U.S. Department of the Treasury in late 2020, the SBV has switched to buying foreign currencies in a six-month term early this year, but basically this policy may be supportive to the liquidity of the system. In addition, the United States has lately removed Vietnam from her list of currency manipulators. This indicates the intervention in the market for foreign exchange spot transactions may no longer have to bear great pressure. In other words, the central bank may resume the policy on buying foreign currencies via both spot and forward contracts.

Another supporting factor is considering the fact that prices in the real estate market are on the constant rise in an unhealthy way in some localities, which means probably a certain volume of bank loans has been spent on swing trading in this investment channel, the agencies in charge will tighten their grip to cool down the steep housing prices. The SBV, meanwhile, will probably formulate other policies in a bid to limit the volume of credit poured into risky industries, such as real estate or securities, thereby curbing credit growth in the process.

When it comes to capital inflows, banks have considerably built up their charter capital in recent years and set out plans for drastic capital hike this year. Also, they have successfully issued long-term bonds and valuable papers, which helps reduce the dependence on deposits from individual customers, who often come only when offered high interest rates.

As per deposit rates, in April, whereas several banks lifted their deposit rates (up 0.6 percentage point for terms of six months or longer at GPBank, up 0.2 percentage point also for terms of six-month or more at VPBank, and up 0.2 percentage point for terms of 1-3 months at PGBank), some others further lowered such rates: down 0.1 percentage point for terms of six months or longer at Kienlongbank, down 0.2-0.3 percentage point for terms of 6-11 months at VIB, down 0.2 percentage point for 3-5 month terms and 0.1 percentage point for terms of 12 months or more at Techcombank, down 0.2-0.4 percentage point for all terms at MBBank, etc.

SGT

Source: https://vietnamnet.vn/en/business/is-interbank-rate-climb-worrisome-737677.html

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