Vietnam’s FPT to Appoint New CEO to Lead Global Expansion
FPT Corp., Vietnam’s largest listed telecommunications and technology company, is poised to hire a new chief executive officer this quarter as it positions itself to expand globally, Chairman Truong Gia Binh said.
Binh, who has been filling in as the CEO since Truong Dinh Anh resigned the post last September over “differences” with the board, said in an interview in Hanoi the company has conducted a global search for a new leader.
FPT and other Vietnamese technology companies are vying to compete with regional software developers such as India’s Infosys Ltd. (INFO) and emerging Chinese companies, capitalizing on Vietnam’s low labor costs and tech-savvy workforce. The new CEO will be charged with helping FPT significantly expand its outsourcing business in the U.S., Binh said yesterday.
“Adding a new CEO shows the company is confident and moving forward,” Lam Nguyen, a Ho Chi Minh City-based analyst at technology research firm International Data Corp., said in a phone interview yesterday. “Fresh management, new ideas, new personnel -- I think that’s a plus for FPT.”
Shares of Hanoi-based FPT fell 0.2 percent to 43,600 dong as of 1:36 p.m. on the Ho Chi Minh City Stock Exchange after rising as much as 0.7 percent.
FPT has rallied 24 percent this year, outpacing the 20 percent advance in the benchmark VN Index. (VNINDEX) Binh said he expects the company will achieve a revenue target of $1.3 billion this year, compared with $1.2 billion in 2012.
The leadership shift comes as FPT, one of Vietnam’s largest private companies, moves to provide more cutting-edge services in areas such as cloud computing, big data and mobile technology. It operates offices in 11 countries.
A new CEO represents a generational change at FPT, said Lam. Binh, who co-founded the company in 1988, said he will remain chairman. He served as chief executive officer for 20 years before stepping down in 2009.
“I would like to transfer it to a second generation of leadership at FPT,” said Binh, who is 57 years old.
The new CEO will share the company’s “vision” for further global expansion and a strategy to develop higher-end technology services, he said. Earlier this year, FPT opened a research and development center in Silicon Valley. The company has partnerships to globally deploy the technology of Microsoft Corp. (MSFT) and SAP AG (SAP) to clients and is looking to develop similar relationships with other technology companies, Binh said. FPT is also providing services to companies using Amazon.com Inc.’s cloud technology.
Gaining a bigger slice of the worldwide information technology outsourcing market, which Gartner Inc. (IT) estimates will be $288 billion this year, is “very challenging,” said Ankita Somani, an analyst at Angel Broking Ltd. in Mumbai. Indian outsourcing companies enjoy repeat business from 90 percent of their clients, she added.
“It will take time to get into the big league,” Somani said in a phone interview today. “You can’t jump into large projects. You have to start with smaller ones. That’s how you scale up your capabilities.”
Binh’s presence at the company has been reassuring to investors, Lam said.
“He spearheaded the company into what it is today,” Lam said. “He’s kind of like the spirit of FPT.”
FPT’s eight subsidiaries employ about 16,000 people. The company in March set a target for pretax profit to increase 10 percent to 2.65 trillion dong ($125 million) in 2013. The company has exceeded its first-half goal, Binh said, without giving specific numbers.
FPT is looking to expand its U.S. outsourcing revenue to a total of $100 million by 2016 from $22 million, Binh said.
“We target very high growth there,” he said. “It’s a big chance for FPT.”
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