This information was shared by Mr. Nguyen Van Thien, Chairman of the Board of Directors of Binh Duong Water and Environment Corporation – Joint Stock Company (Biwase), in relation to the company's selection as a strategic partner by numerous water supply companies.
Mr. Nguyen Van Thien, Chairman of the Board of Directors of Binh Duong Water and Environment Corporation - Joint Stock Company (Biwase)
Biwase Collaborates with Water Supply Companies for Development
Speaking about mergers and acquisitions (M&A) at the Vietnam M&A Forum 2023, Mr. Nguyen Van Thien expressed his disagreement with the common perception that M&A equates to hostile takeovers, or "big fish swallowing small fish.
"They don’t collapse, and it benefits everyone. This is about sharing. If they lack governance knowledge or capital, we can help. Currently, I sit on the board of directors of several companies in the same industry to support them with governance experience, service development, and improving their water supply systems, while reducing water losses," Mr. Nguyen Van Thien emphasized, viewing M&A as an opportunity to extend a helping hand, supporting struggling companies so that they can overcome challenges, retain their businesses, and preserve their assets.
Mr. Thien further explained: “When Biwase invests capital, the company participates in the board of directors of the investee company. We help improve services and support the company in development, without engaging in hostile takeovers.”
In practice, Biwase has encountered many cases of businesses passionate about the water sector. These companies invested capital to build water plants upon learning that the water supply industry is relatively stable. However, despite their enthusiasm for investment, they did not develop a complete water supply network or service, which led to difficulties and losses. In such cases, Biwase stepped in to co-invest, develop the network and systems, and provide professional services, thus enabling these businesses to grow alongside Biwase.
"Water supply and infrastructure contribute to poverty reduction. Supplying clean water improves public health, reduces illness, and consequently helps alleviate poverty," Mr. Thien remarked, emphasizing the role of clean water provision in promoting poverty reduction.
"Thanks to our well-structured and efficient service and investment strategies, many companies in the water supply sector have chosen Biwase as their strategic partner. The company will continue its strategy of expanding water supply activities in other provinces," Mr. Nguyen Van Thien proudly shared regarding Biwase's recognition as a strategic partner by several water supply companies.
Biwase, originally a state-owned company, has focused on customer service since its privatization, continuously improving its technology. The company has made significant advancements, exceeding regulatory benchmarks such as achieving a very low water loss rate, approaching the levels seen in Singapore. Through these improvements, Biwase has accumulated capital, which is reinvested annually to expand the water supply system, even reaching rural areas within the company's operational regions.
Mr. Thien noted that many companies have the capacity to produce water and have built water plants but lack the ability to provide and distribute services, which can still lead to losses. However, when Biwase enters, the company supports these businesses by enhancing their service and water distribution capabilities.
"We must excel in service delivery because customers are willing to pay for quality," Mr. Nguyen Van Thien stressed, highlighting the importance of developing water supply services.
Regarding post-investment governance, Mr. Thien stated: "After the acquisition, we change governance practices. In some cases, prior to the handover, there were issues that adversely affected workers. Upon taking over, we ensure job security for the workers, and they dedicate themselves to their work. If salaries are too low, we may adjust them and review the workers' living conditions, investing additional resources to improve their quality of life, which in turn boosts the company's productivity.
Biwase Becomes a Major Player in the Water Supply Industry
Under the leadership of Chairman Nguyen Van Thien, Biwase has seen continuous growth.
Formerly known as the Binh Duong Water Supply Center, the company was established in 1975. After undergoing privatization in 2016, it was listed on the Ho Chi Minh Stock Exchange (HoSE) in 2017, and by 2023, it officially changed its name to Binh Duong Water and Environment Corporation – Joint Stock Company (Biwase).
Biwase’s ongoing efforts to reduce water loss rates over time stand as a clear testament to its strategic investments and effective use of ODA funding to develop water pipeline infrastructure. While water loss rates were as high as 60% in 1994, since 2021, these rates have fallen and stabilized at just 5%. This places Biwase among the water supply companies with the lowest water loss rates in Vietnam and the region.
Having successfully reduced its water loss rate to below 5%, Biwase is now actively sharing its successful practices with other entities. Since 2022, Biwase has been expanding its business beyond Binh Duong Province by investing in equity and acquiring shares to collaborate and further develop its core competencies.
As part of its long-term growth strategy, Biwase has announced that, should favorable opportunities arise in the water supply and waste treatment sectors, particularly in areas with high potential, and within the company’s available capital resources, it will continue to invest in its core business sectors.
In recent years, Biwase has pursued investments and share acquisitions. In April 2022, Biwase increased its stake in Can Tho Water Supply Joint Stock Company 2 ( Can Tho Water Supply 2 Joint Stock Company) to 48.86% and acquired 24.64% of the charter capital of Can Tho Water and Sewerage Joint Stock Company (Can Tho Water and Sewerage Joint Stock Company). These two companies became affiliated entities of Biwase. In November 2022, Biwase completed the acquisition of the Minh Hung Water System in Chon Thanh District with a capacity of 5,000 cubic m3/day from Binh Phuoc Water Supply and Sewerage Joint Stock Company, increasing its water supply capacity to 40,000 cubic meters per day for the Minh Hung Industrial Park.
In 2023, Biwase’s share acquisition activities intensified. On May 30, 2023, the company increased its ownership to 90.09% in Biwase – Long An Water Joint Stock Company (formerly known as DNP Long An Water Infrastructure Investment JSC) and 99.8% in Can Duoc Water and Environment Joint Stock Company. On July 1, 2023, Biwase raised its ownership to 76.96% in Bang Tam Water and Environment Joint Stock Company, 97.27% in Can Giuoc Urban Projects Joint Stock Company, and 96.06% in Chau Thanh Urban Projects Joint Stock Company.
The total investment in these five new subsidiaries in 2023 amounted to 612.2 billion VND, generating goodwill from the consolidation process amounting to 277.86 billion VND.
In the first nine months of 2023, Biwase also made three additional investments in affiliated companies, with a total value of 408.23 billion VND under the equity method. This includes a 38.06% stake in Long An Water Supply and Sewerage Joint Stock Company (106.15 billion VND investment), a 41% stake in Quang Binh Water Supply Joint Stock Company (97.61 billion VND investment), and a 17.5% stake in Vinh Long Water Supply Joint Stock Company (204.47 billion VND investment).
Clearly, since privatization, Biwase has leveraged its experience and expertise in its two key areas: water supply and waste treatment. The company has established a dominant position in the water supply market in Binh Duong Province and is expanding into other potential markets. With this momentum, Biwase is poised to become a leading company in the water supply and waste treatment sectors across southern Vietnam and, in the near future, across the country.
Source: https://baodautu.vn/ma-la-cung-chia-tay-de-giu-duoc-doanh-nghiep-giu-duoc-tai-san-d203998.html