Today was our last day of company visits – weird to say. Time has truly flown on this trip and Saturday we already return home! Today’s agenda involved two different company site visits – the first to VSIP, Vietnam Singapore Industrial Park, and the other to II IV (as in “two six”).
VSIP, or the Vietnam Singapore Industrial Park, is a developer with their main projects being an industrial park and an integrated township. The first industrial park was located about an hour outside of HCMC, but since then the company has also built industrial parks and townships in North and Central Vietnam. They pride themselves as a “one stop shop” in terms of providing services and resources for their clients – post offices, customs offices, schools, a power plant, etc. Companies who are interested in having a location within the industrial park have two options : buy a pre-made factory from VSIP, or buy a plot of land from VSIP and build their own facility upon it.
As the name suggests, the business was initiated by the Vietnamese and Singapore Governments as a partnership to build a place for businesses that wasn’t in rapidly filling HCMC. The government of Singapore actually owns 11% of the company, and VSIP itself uses Singapore-style management organization. The partnership with Vietnam then provides VSIP, with its Singapore style management, a skilled and plentiful labor force that they wouldn’t necessarily have access to in Singapore itself. In this way, VSIP’s existence as a joint venture between the two gives the company the best of both worlds. The success of the company highlights the good relationship between the two nations and the continuity of this relationship for future development projects.
The Vietnamese Government, as the rulers of a developing nation, seem to have a tendency to reach out to their Asian neighbors for assistance in developing. Besides the VSIP enterprise, we’ve been told / seen on multiple occasions that the Japanese government has leant Vietnam money to build a new subway system in HCMC set to be completed in 5 years (although are these things ever really finished on time…). Japan also gave Vietnam a very low interest rate and a decent amount of time to pay back the loan, so that they are able to meet the payments.
After we finished our visit with VSIP, we also had a site visit with a business located inside VSIP’s industrial park – II VI. II VI is a materials engineering company who gets their name from the significant-to-engineering compounds made of groups II and VI of the periodic table. They are actually headquartered in Saxonburg, Pennsylvania but have several international branches including II VI Vietnam. This Vietnam branch specializes in lasers and optics (include the sapphire optics sense for the Lockheed Martin fighter jets.. thats my mom’s company!). They had several motivations for opening a branch in Vietnam. They were facing competition from foreign markets, downward price pressures, and their shift from the domestic to the international market in terms of the products they were producing. To get cheaper but still skilled labor, since the work they do is highly technical and requires great skill, it was natural for them to open a branch in Vietnam.
However, their location in Vietnam poses some originally unforeseen challenges due to the culture. Tet is a major holiday in Vietnam because it is the lunar new year. Workers all over Vietnam take a week or a week and 1/2 and travel back to their (typically rural) hometowns for the holiday. Its just like American Christmas in that sense, but here’s the cultural difference – often the more skilled workers will live off the money they’ve saved over the past year and just take several months off after Tet, before re-entering the workforce. Because they are skilled workers, they easily find another job after their hiatus is through. Therefore, employee retention has been a big challenge for II VI. Not only the superficial rates of employee retention, but actual operations after Tet can be endangered by this trend. If the company needs 100 employees to run and only 60 come back after Tet, that is a glaring problem and could stunt production for quite some time. To combat this, II VI times their bonuses for after Tet as an incentive workers to return. Additionally, the company will pay for transportation for the employees’ travels home.
After our full day, we ended with an amazing dinner and a BEAUTIFUL restaurant planned by our UEF friends. The restaurant had live music, twinkly lights, outside tables, and traditional Vietnamese food. It was perfect. This day felt like maybe the longest day of the trip, but as I write this post, I wish I could go back and do it over and over again just so I could stay a little bit longer in this country and with all of these amazing people…