A wave of new construction projects is ushering in a new growth cycle for the construction industry. How do you view this opportunity?

For a long time, the construction industry has struggled with excess building capacity relative to market demand, particularly in the aftermath of the Covid-19 pandemic. With more contractors competing for a limited pool of work, competition has largely centered on price. To secure contracts, companies have been willing to submit low bids, sometimes accepting razor-thin margins or even losses simply to maintain a pipeline of projects, keep their workforce employed and sustain operations.

Contractors have also faced highly unfavorable contract terms, particularly the absence of payment guarantees. In some cases, project owners have pressured contractors to carry out additional work when they were not approved yet. Without effective payment safeguards, contractors can commit substantial resources to projects without recovering their costs on schedule. Prolonged cash conversion cycles then compound financial pressure, undermining their ability to sustain operations and take on new projects.

However, since last year, a surge in project kickoffs has begun to change market dynamics. Labor and construction materials have become scarce, leaving some projects without sufficient workers and making it harder for project owners to secure contractors through bidding.

This shift gives contractors an opportunity to strengthen their negotiating position with project developers. It is a clear opening to establish more sustainable contracting practices, with transparent cost structures that include an appropriate profit margin for contractors.

The opportunity is clear, but the construction industry still faces major challenges, including heavy receivables and rising labor and material costs. What solutions do you see?

A stronger negotiating position does not mean contractors’ difficulties will be resolved anytime soon. At Hoa Binh, labor costs and many other expenses have risen sharply, with some doubling. This puts significant pressure on legacy contracts signed at lower rates, particularly those without adequate price-adjustment mechanisms.

Contractors must therefore manage pressure from existing contracts while developing more sustainable terms for new projects. Even a large contract can deliver poor returns if its pricing fails to cover costs or payments are delayed.

Construction is a capital-intensive business that requires substantial working capital. Expanding revenue while cash flow remains constrained can increase financial strain. The ability to select the right contracts, control costs, manage construction schedules and collect receivables will therefore determine how effectively companies turn market opportunities into business results.

To regain their footing, contractors must strengthen management capabilities, from cost estimation and schedule control to selecting commercially viable projects. This is also essential to avoid repeating a familiar mistake: chasing revenue and taking on too many projects without securing adequate profits and cash flow.

At Hoa Binh, we have implemented the ISO 9000 quality management system since 2001, progressively standardizing processes and strengthening construction quality control over the past 25 years. We have also made this system available to our subcontractors, enabling them to apply it in their projects, including those for other main contractors.

However, companies cannot solve these problems alone. I believe the construction industry needs clearer mechanisms to protect contractors’ rights, particularly regarding payment obligations and construction regulations. When contractors bear most of the financing and payment risks, their ability to maintain quality and ensure stable project execution is compromised.

As Vietnam enters a new phase of development, how do you assess the prospects for Vietnamese construction firms expanding overseas?

Domestic workloads are currently substantial, so this may not be the most favorable time for construction companies to expand abroad. Nevertheless, they should prepare for the eventual saturation of the domestic market.

Having experienced several decades of ups and downs in the construction industry, I believe Vietnamese companies have enough expertise and capabilities to compete internationally. We have delivered projects with low defect rates, few accidents and fast construction times. Vietnam’s construction capabilities are highly competitive.

Even so, companies seeking to expand overseas must continue to improve their technical expertise, construction quality and ability to meet international standards. Entering foreign markets would not only expand revenue but also generate foreign-currency earnings for the country and increase the construction sector’s contribution to the economy.

However, success will depend on more than individual companies’ efforts. In my view, the industry needs a national development strategy, starting with providing market intelligence, identifying suitable destinations, and assessing Vietnamese companies’ capabilities before they enter new markets.

Workforce standardization is another priority. To deploy Vietnamese engineers and construction workers overseas, the country needs a training strategy alongside efforts to secure international recognition of professional qualifications and certifications.

Vietnamese workers may receive rigorous training and possess strong technical skills, but if their qualifications are not recognized in destination markets, their employment prospects remain limited. This underscores the need to improve training quality, standardize curricula, and expand mutual recognition of professional qualifications. Licensing requirements and foreign-worker admission rules in individual countries are additional barriers that must be removed.

Singapore, for example, has mechanisms for admitting workers from countries such as Malaysia and Indonesia, while deploying large numbers of Vietnamese workers there remains difficult. One reason is the lack of sufficiently comprehensive bilateral arrangements, particularly in construction. Although Vietnam has signed numerous agreements with other countries, greater attention is needed to strengthening cooperation and facilitating the entry of Vietnamese construction companies and workers into international markets.

How far has Hoa Binh recovered, and how long will it take to return to pre-pandemic levels?

Changing market conditions are creating opportunities for contractors generally and Hoa Binh in particular. The group’s business performance is showing signs of improvement, although cash-flow constraints remain a key issue to resolve.

Our current workload has doubled from last year, and we expect it to increase by around 50% in 2027. I believe the company’s revenue could return to pre-Covid-19 levels by 2028. Profitability, however, is likely to remain under pressure in 2026 due to price escalation and a sharply rise in labor costs and other expenses.

Meanwhile, tourism is recovering strongly, and resort projects are being restarted. This has traditionally been one of Hoa Binh’s core strengths, making me very confident about the company’s outlook.