Today, I visited Vietnam Singapore Industrial Park (known as VSIP). The project was started in 1994 by the Prime Ministers of Singapore and Vietnam in an effort to boost the economies of the two countries. Since then, Singapore and Vietnam have been working together to make the industrial park project as successful as possible. This is a unique partnership, as the government of Vietnam does not often enter into these kinds of agreements with foreign countries.
VSIP constructs industrial complexes and townships for companies. It builds factories, housing, and infrastructure facilities such as sewage drainage systems and roads. Most of its funding for projects comes from foreign investment, which it brings in with its one-stop business model that is attractive to investors. Working with Singapore allows Vietnam to have an international connection, and it improves its foreign investment relations.
In the afternoon, I visited one of the companies that operates within VSIP, II-VI’s Vietnam location. One large problem with an American company operating in Vietnam is the language barrier. The chief engineer of the company does not know any Vietnamese, and he is unable to communicate directly with his workers. He instead has to use his bilingual employees to translate. II-VI, among many other American companies, has chosen to set up locations in Vietnam to take advantage of the reduced labor costs. II-IV produces components for electrical products, and the location I toured focuses on glass parts for both large-scale and small-scale electronics. Some of the products it produces are not unique, but it also produces some products that no other company does. This is the distinguishing factor between II-VI and other companies of its kind, and it is what allows it to stand out in the market for electrical components.