Bennett Neo, CEO of Sabeco at the Vietnam M&A Forum 2022

I think Sabeco has a lot of pain points about M&A, trying to realise the dreams that everyday people try to justify and try to do what they have.

So far, many people have thought that we bought Sabeco without due diligence, but I must say that it is very hard to evaluate this result.

I had to comb through basically everything, almost like doing a mini due diligence by myself, going through the whole company to see where the values are, what are the biggest impacts down to the smallest factors, and what we can do in the short term all the way to the long term and then matching them to a three-phase strategy.

You must well understand the company then you can be able to extract, find out where the values are, and most of the time, you'll probably get from 80 to 90 per cent correct, but you will never get it 100 per cent correct.

I've also worked in the United States and Europe, Asia, into China, but being the CEO of Sabeco is the most difficult job I've ever had. The law is different here, which is difficult to adapt to.

For Sabeco, the company structure is different and complex because it is a state-own company. State-owned means it has its own processes. So state-owned companies have peculiar procurement laws and policies. So it's very different.

The people that work for state-owned companies are also very different from international commercial organisations with different training, education, and other issues.

It is a big problem for us to lead around 13,000 people in the Sabeco ecosystem to move together in one direction with a new mindset. Furthermore, we need high-qualified staff in our business. My experience is that you will really fail if you don’t have the right people with the right mindset even if you have the best equipment and the best process.

What we've done in Sabeco is to implement the first phase of transformation into seven pillars supported by Sabeco 4.0 project, including sales, marketing, supply chain production, people, and digitalisation.

For example, in digitalisation, we set up a system to manage all trucks in the first months after the M&A. After that was the warehouse management system and a control tower for the whole supply chain. And immediately after that we have the first efficiencies from digitalisation for the visibility and efficiency in managing the supply chain.

The second thing I look into is the management board. Management boards in Vietnam generally operate all activities of the company, and where I have stayed before, the boards are all at a more strategic level. The management board mostly focuses on strategic long-term plans for the company while lower management does the day-by-day tasks. I call this a “mismatch” here.

We have the seven pillars of SABECO 4.0, and we just started the second phase of transformation this year, and now we are implementing medium and long-term plans as well.

In the short term, for the first three and four years, we harnessed the low-hanging fruit. We did all the key things for a solid foundation. The second phase consolidates and further strengthens our foundation and governance process.

One of the interesting pillars we have is “unlock”, is to refresh all potential within the company that we have not yet exploited. So that's the second phase of the transformation process.

I told my employees that we would take another three or four years or even longer and then we would go to the third phase of transformation. In the next 10 years or more, Sabeco will become a professionally run and internationally respected company.

I don't want to be over-ambitious. I'll be very realistic. Changing a long-time state-owned company to an internationally respected company, I think will take 10 years. Of course, I want to do it faster, but it will not be easy.

So, if you asked whether the results that we had met my expectation, I would say that 70-80 per cent and I am happy to tell you that M&A deals are the start of the pain. At the end of the day, if you're able to realise the dreams of the acquirer, I think it’s worth it.

Apart from the business side, M&A must consider the cultural side. Every culture is different. I can't change the Vietnamese culture, but I can change the company culture. I try my best to get people who are working with us in the same direction. But finally, whatever culture you're in, it is about sincerity. If you're sincere about it, then you respect the culture, and it will work well.

It's very important that you genuinely respect and are sincere about all the changes and you care about the people. If you do that well, whatever culture you are, you’ll be able to succeed.