“It is difficult to talk precisely about the market size of elevators and escalators in Vietnam, but Ho Chi Minh City’s market has grown more than 40 per cent in 2010 compared to previous year”
Vietnam is becoming a more strategic market for Otis Vietnam. Otis Elevator Company president Didier Michaud-Daniel talked with VIR’s Minh Thien about its development strategy and some points of view regarding Vietnam’s elevator, escalator and moving walkways market during his recent four-day working visit to Vietnam.
What is the purpose of your visit to Vietnam?
Vietnam is a really promising market for us now and that is the reason for our visit this time. I want to meet local customers and introduce our environmental commitment “The Way to Green” which incorporates our energy efficient Gen2 elevator. I will also visit Bitexco Tower, Ho Chi Minh City’s highest tower and an iconic building, which we are very proud to be providing elevators and escalators to.
What do you think of Vietnam’s elevator and escalator market?
It is difficult to talk precisely about the market size of elevators and escalators in Vietnam, but Ho Chi Minh City’s market has grown more than 40 per cent in 2010 compared to the previous year.
I want my colleagues from China, Korea, Japan to come to Vietnam and see the construction here. Now is time for us to think about the latest products which could be sold in Vietnam. We are selling products from Korea in Vietnam, but a lot of new technologies can be sold here. Of course, the main construction sites are still in China.
You said Vietnam is a strategic market like China. Can you elaborate on this?
I said China was a strategic market because the worldwide market today is around 500,000 units units, but 250,000 units are sold in China. So China is more than half of the world’s market. And when I look at markets moving ahead as China is today, I think of Russia, India, Vietnam and some countries in the Middle East, some African countries like South Africa. So it is strategic for us to work with Vietnam because it is growing and it has 85 million people, most of them young. Also, more people are working in the cities now. Vietnam needs more apartments, office buildings and commercial centres.
It has been three years since former Otis president Ari Bousbib’s visit to Vietnam in 2007 when he said Otis would be dedicated to change its position in Vietnam. Is this still true?
I am not sure whether Otis is the elevator leader in Vietnam or not because we do not know exactly the market size, but we will be the leader in the next few years. In 2010, Otis generated revenue of $11.6 billion with over 60,000 employees. We are doing well in China and Korea, and I believe we will do well in Vietnam.
What is Otis Vietnam’s development strategy for 2011-2015?
Otis Vietnam’s development strategy is to be sure that we are the market leader. To do that, we need to address the different types of customers within Vietnam. For example, we need to be sure that we can provide competitive products to all types of customers from towers like Bitexco Financial Tower to smaller residential properties. We need to be sure that we can cover all the market because it is going to grow faster. Apart from elevators, we see this is also a big market in terms of services for elevators and escalators which contribute 60 per cent of revenue for Otis versus 40 per cent from new equipment. I think we could make acquisition of a company in Vietnam or some joint ventures with Vietnamese companies to develop our presence in Vietnam. But, to be sure of continuing to grow, we need to work with Vietnamese companies.
Could you share some ways that OTIS makes elevators and escalators greener?
We use flat belts and gearless machines that do not require additional lubricant, making the system cleaner for the environment. Secondly, we have devices called ReGen drives, which together with the Gen2 system, reduce energy consumption by up to 75 per cent and redistribute energy that is normally wasted as heat during breaking. Moreover, our customers have green options when it comes to lighting with LED offerings that last up to 10 times longer than conventional lighting. And with auto-shut-off mode, LED lighting is up to 80 per cent more energy efficient than conventional lighting. Also, the innovative belts allowed Otis to redesign the elevator’s key components into a compact gearless machine that eliminates the need for a machine room. In fact, more than 95 per cent of materials used in the Gen2 system are recyclable.