CSR - Hearts, minds & the bottom line

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THP’s heir apparent Tran Uyen Phuong (Photo: THP)

Passion to build a world class business drives Vietnamese family to go the extra mile -- literally

When Tran Uyen Phuong breezes into the Central Hong Kong office of her public relations agency at the end of normal business hours, the wave of energy emanating from the deputy CEO of Vietnam’s biggest maker of herbal teas and sports drinks is inescapable. Just as well: fresh from the airport, she jokes that she should have saved the expense of her hotel bill because she’s flying straight back home after a packed agenda of meetings and interviews.

Which is odd, because listening back on the taped interview reveals a full hour in which the eldest daughter of the Tan Hiep Phat Beverage Group founder regaled the room with jokes and humorous anecdotes about the company, her family and their mission to create a world-class Vietnamese organization that can slug it out toe-to-toe with giant rivals such as Coca-Cola and PepsiCo.

We watch a video of Tran’s gala performance at THP’s annual charity event -- so large that it is broadcast on national TV. Check it out on www.youtube.com/watch?v=h_X1woTtpvsShe -- note the outfit sporting images of the group’s beverages as she sings a song composed by an employee in THP’s IT department (more on that later).

Tran is engagingly frank about the challenges of working under the iron will and demanding supervision of her father, Tran Qui Thanh. An iron will that denied younger sister Ngoc Bich of her place in the first Vietnamese team to conquer Everest -- which the company nonetheless sponsored. To mend her sister’s broken heart, Tran tells how she helped divert her energy into training for the Iron Man ultramarathon -- a regime that saw Tran pound out a few mini-marathons of her own as moral support.

And then, the hour is up, and Tran gets set for her second interview. Oh, and did she mention that she’s also writing a book? Her second. Where, you might wonder, does she find the time, let alone the energy.

Part of the answer lies in the lore and legend of THP itself -- a classic tale of homespun David taking on multinational Goliaths. And part can also be gleaned from Tran’s quixotic portrait of her father. Written out in black and white, a reader might imagine a tyrannical despot whose overbearing ambition has made life hell on earth for his downtrodden daughters. But Tran peppers her stories with self-deprecating wit and what is clearly a deep and genuine affection for a stern and demanding father, and it becomes clear that his mission has become the whole family’s.

“It’s not about responsibility, it’s a way of being,” she says. “If you’re being the owner, you will look at everything differently,” she says, outlining a worldview that seems to best fit the modern notion of “stewardship.”

Serial entrepreneur Tran started the company in 1994 by buying over an old production line from Saigon Beer, and refurbishing it himself -- helped by his training as a mechanical engineer. Growing up in an orphanage after his mother passed away when he was nine taught Tran to fend for himself, and he applied that survival instinct, as well as sheer graft, to his business -- forging an iron discipline that has clearly passed onto his children.

“We had tough love,” his eldest daughter said. “My father is very tough on everything.”

The company’s success – it now supplies drinks including herbal and green teas, sports and energy drinks, soya milk and water across Vietnam as well as in 16 other countries including China and Australia – has attracted the attention of global brands, with Coca-Cola, PepsiCo, Universal Robina Corp of the Philippines and Japan’s Ito En approaching it over the years with a view to forming partnerships or acquiring a minority stake.

Talks with Coca-Cola ended without a deal because, Tran says, the Atlanta-based giant would have clipped THP’s wings -- and the Trans’ ambitions to build a national champion to compete on the world stage. That ambition fuels the family’s determination to create a professionally managed company that cleaves to global standards not just in its manufacturing process but also in terms of corporate governance -- which includes each daughter having to earn her right to a role in the group.

“We had to work like hell in order to come up to the position,” she said.

So, THP proudly touts its investments into state-of-the-art technology in its production, packaging and distribution processes. That includes surveillance systems to prevent any recurrence of the 2015 scandal in which a customer complained he had found a fly in his drink. A government inspection cleared THP of that charge -- and earned the accuser a stint in gaol -- but underscored the vulnerability of the company’s brand in the communist country’s new economy.

MNCs like Coca-Cola and PepsiCo have learned hard lessons about the need to engage with all their stakeholders in the markets where they operate -- think India and water shortages. Companies in developing countries, especially manufacturers, and even more so family-owned ones, tend to be preoccupied with reaping profits -- sometimes at the expense of the environment, workers and the long-term viability of the business. That’s a failing Tran is determined to root out.

“For us to grow the business we always have to have a separation between family and business. If not we will make the same mistakes as all the other family businesses,” she says. “We need to make it sustainable. CSR is part of this sustainability. It’s not like, without me, it’s not going to work.”

Charity begins at home…

So THP’s Dream Bridge Program connects isolated rural communities that otherwise faced dangerous river crossings. It also helps the group’s products to reach more of the nation’s 100-million strong consumer market.

The group also promotes Vietnamese art and culture -- a particular passion of the hyperactive Tran. That has included sponsoring Vietnam National Drama Theater’s production of Hamlet and Vietnamese Kitchen Gods in Singapore.  

Sports are the third pillar of THP’s CSR. Aside from the Everest assault, the group named ultra-marathon runner Thanh Vu as brand ambassador for its Number One energy drink as she sought to become the first Southeast Asian woman to complete the 4 Desert Grand Slam.    

Winning hearts and minds of employees is core to the company’s success, Tran says. “They spend two-thirds of their lifetime with the company, so they if they don’t like it, it’s torture.”

Investing in staff has its own and sometimes unexpected rewards, she says, citing the winning songwriter at last year’s event.

“I discovered a very nice song, written by my IT staff,” she said. “He wrote the song about nine different herbs [that are the essential ingredients in the company’s products] which my marketing department couldn’t do. We’ve been looking for someone who could do it … He told me that it took him five years.”

Tough love

Hewn from the same stone… THP founder Tran Qui Thanh with his daughters Uyen Phuong (left) and her ultra-marathon running younger sister Ngoc Bich. (Photo: THP)

Patriarch Tran Qui Thanh set up THP in 1994, the year that US President Bill Clinton’s administration lifted its trade embargo on its former Cold War foe. Two years earlier, the ruling communist party had introduced market-led economic reforms that enabled entrepreneurs such as Tran to expand and modernize their businesses.

Tran was an early mover in Vietnam’s private-sector, starting a small yeast maker in 1977 -- just two years after the Viet Cong took control of his native Saigon and ended the US-backed South Vietnamese regime. A combination of US sanctions and a centrally controlled economy made a tough tutor for the country’s businessmen: Tran survived several booms and busts as the economy lurched through periods of stagnation, hyperinflation and currency instability.

Tran was sent to an orphanage in South Vietnam after his mother died in a car crash when he was aged nine. Conditions were harsh, he told the Financial Times, recalling being caged overnight with pigs as a punishment for fighting another boy: “No food, no clothes and they put me in a pig’s cage … I learnt that I must fight if I want to survive.”

THP began when Tran took over a production unit of Saigon Beer, branching out into soft drinks and flavored teas in step with the evolving tastes of Vietnam’s burgeoning middle class consumers.