The Vietnam Singapore Industrial Park is a partnership between the governments of Singapore and Vietnam. At the industrial park, corporations can take advantage of a consolidated government office which greatly simplifies licensing and other legal business matters. They also receive on site customs, which can save time because the lines are very long. Companies in VSIP also receive a lower corporate tax rate than they do in other areas of Vietnam in order to entice them to move to VSIP. The main function of VSIP is to develop the properties in a set area so that businesses can lease them. They build easily modifiable factories and employ a marketing team to sell foreign businesses on the benefits of VSIP. One of the most attractive selling points that they use is the low wages in Vietnam.
The more interesting site visit today (at least to me) was II-VI, which is one of the engineering focused parts of the trip. The level of technical detail was very high and so it was hard for everyone to understand exactly what went on. We also could not take pictures while viewing the company floor so it is hard to document the exact steps that II-VI takes. II-VI is an almost billion dollar corporation which designs and builds optics for uses in manufacturing, military, and medical industries. Their advantage is in the material used in their optics which they produce in America. II-VI starts with a piece of glass and cuts the glass into shape, bevels it, polishes it, and inspects it in order to make a lens. They work on the nano scale and use a laser to map the surface of the glass to ensure that it is smooth.
The workers at II-VI are all green-meaning that they know nothing about the business or the process and are trained and certified by the company to do a specific task such as polishing or measuring. The tasks can be very tedious and are very high stakes. If an employee is working at the end of the production line and does anything improper to the lens then the entire value invested into that lens is wasted. The training process is very long and can take 6-8 months. The main advantage that II-VI has for locating a part of their business in Vietnam is the low labor cost, however they interestingly pay their employees an efficiency wage. The reason for this is because of the intensive training involved. They must encourage their workers to stay and so the time training them is not wasted. The efficiency wage that they pay their workers is still less than what they would pay in other countries and so the low labor cost that makes Vietnam so advantageous still exists.
Another part of II-VI which we observed was the manufacturing of an electrical device which is heated when a positive voltage passes through it and cooled when a negative voltage passes through it. The amount of tedious work required to produce this product was immense and workers had to move a tiny element on the microscopic scale into small holes. The product is used to cool optics in cars and other electronics and was able to allow a Tesla to run with 200 less pounds.
II-VI was my favorite site visit of the trip and there was too much to say about it to fit fully into one blog post. I was super glad to get to see an engineering business even though it was very technically complex. As long as one was not intimidated by it, it was okay.
We also went to the top of one of the skyscrapers and so one of my pictures is the view from the top of that.