Gelex emphasizes risk management as priority

By Ha Linh - Mar 30, 2024 | 10:11 PM GMT+7

TheLEADERIn a strategic shift following years of extensive mergers and acquisitions across diverse sectors, Gelex is set to revamp its governance structure in the upcoming years.

Gelex emphasizes risk management as priority
Gelex and Frasers Property Vietnam have joined forces to embark on the development of high-end industrial centers. Photo at the courtesy of Gelex

Gelex Group aims to optimize its subsidiary companies' advantages while forging partnerships with foreign entities to drive enhanced value creation.

At the group's recent annual general meeting for 2024, Nguyen Van Tuan, a board member and the company's CEO, underscored the paramount importance of establishing a robust governance framework in the company's forthcoming trajectory.

Having spearheaded numerous mergers and acquisitions as an investment powerhouse over the years, Gelex has ventured into various sectors. These acquisitions have targeted companies with solid fundamentals, substantial growth potential and ample room for expansion.

However, fully capitalizing on these opportunities necessitates a coherent strategic direction and effective management.

Looking ahead, Gelex intends to sustain its M&A momentum while conducting holistic evaluations of investment opportunities, prioritizing partners' profitability potential and governance effectiveness.

Tuan singled out Cadivi, a key Gelex subsidiary specializing in electrical cables, as a case in point. Despite its prominence in the cable industry, Cadivi's untapped potential remains considerable, particularly in the northern market.

He said with a robust management framework, Cadivi could seize opportunities to broaden its market presence and product portfolio, thereby catalyzing revenue and profit growth.

"To chart a course for sustained advancement, we must lay a solid foundation. Gelex has been actively engaging with major partners, with a focus on bolstering governance, optimizing the performance of our subsidiaries, and fostering collaborations with foreign counterparts to unlock higher value.

Our future M&A activities will prioritize entities that align seamlessly with the group's overarching ecosystem," Tuan emphasized.

Concurrently, Gelex is poised to make significant investments in research and development, spanning human resources, policy mechanisms, and infrastructure.

Notably, the company will place particular emphasis on human capital management, financial oversight, internal controls, and risk mitigation.

In 2023, Gelex commenced the implementation of its management strategy through partnerships with leading multinational corporations such as Frasers Property and Sembcorp Industries.

In a specific instance, Gelex divested 49 per cent of its equity and increased its capital contribution at Titan Corporation in collaboration with Frasers Property Investment, embarking on industrial projects in the northern region with an initial investment of VND6,000 billion ($240 million).

Moreover, Gelex is poised to divest stakes or capital contributions in energy projects in conjunction with Sembcorp Industries, totaling 245 MW, presently operated by Gelex's member companies in Quang Tri and Ninh Thuan provinces.

According to Tuan, these initiatives carry significance beyond their financial implications, offering invaluable management insights to Gelex as it navigates a post-expansion phase.

This strategic roadmap will continue to be intensified in 2024, positioning Gelex to actively participate in global value chains, expand and elevate value-added segments within core industries, boost exports and strive towards becoming a premier investment conglomerate in Vietnam.

This year, Gelex aims for consolidated net revenue ò $1.3 billion and consolidated profit before tax of $77 million, reflecting respective increases of 7.7 per cent and 37.5 per cent compared to last year’s figures.