5/14 VSIP, II-VI, and Recovery

Today we woke up early to leave for the Vietnam Singapore Industrial Park. This industrial park is an agreement between the governments of Vietnam and Singapore. The Vietnamese help Singapore by giving land and Singapore helps with the building of the parks and financing. Similar agreements exist between Vietnam and other governments as these parks are a great opportunity for foreign investment. The parks also provide services such as an internal management board, on site customs, and tax incentives. The internal management board is helpful as it allows the businesses to deal with the government in an easier way. On site customs save a bunch of time as companies don’t have to deal with lines that form at shipping terminals and airports. Finally tax incentives lower the costs for companies and encourage them to choose VSIP as a place to do business. It was interesting to hear that the company relies on word of mouth a lot to get their name out. Also I was impressed how they said that in Vietnam, VSIP has now become synonymous with industrial park.  VSIP has been very successful since it started in the 1990s and has been a key factor in getting high tech companies to come to Vietnam. We later got to visit one of these high tech companies in VSIP called II-VI. II-VI is a PA company whose specialty is optics. They have a manufacturing plant in Vietnam because the cost of operating there is very low due to low wages and tax incentives. Also having the onsite customs is very helpful for II-VI because they import and export a lot. At the Vietnam factory, II-VI produces many of their parts for lasers in Vietnam. The skills of the workers depend on what part of the process they work on. Jobs like coating take much more skill as they are done farther into the process. Therefore, messing up this step would result in much more lost time than messing up the initial cutting of glass, which lower skilled workers do.   The skilled positions are trained by II-VI in Vietnam. An important goal for the company is employee retention because they don’t want to have to train lots of people just to have them leave. When they first started their factory in Vietnam, lots of workers left for the tet holiday and didn’t come back. II-VI solved this problem by offering incentives such as paying for travel back to the industrial park. However, they waited to reimburse the workers to make sure they returned first. Other problems the company faces is competition with cost. Vietnam has helped II-VI with this because the industrial park here helps them keep costs low. At the factory in Vietnam, II-VI produces a large amount of similar products. They mentioned that they have produced over a million of a certain type of laser. As we toured the factory, we were able to see how they were able to efficiently produce large amounts of lasers. It was interesting to learn that II-VI will deal with the raw materials, build the components, and assemble the lasers. It is rare that a company does all this without help. After we left II-VI, I was glad to return to the hotel, as the street food I had finally got to me and I felt horrible all day. Tonight hopefully I’ll recover so I can try a couple more meals before we leave. 

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