VIPs in VSIP

After much excitement, I finally got to visit the business in which my small group did our pre-departure presentation on, Vietnam Singapore Industrial Park. This park was established based upon an agreement between the Vietnamese and Singaporean governments to aid in the development of Vietnam. During the presentation, our group was shown pictures of the area before the creation of the park and after, the industrial park brought transformation that was much needed. The Vietnamese government engages in many similar arrangements with other foreign governments including South Korea, India, and China. There are many advantages to this industrial park including customs on sight and tax incentives. VSIP also struggles because their location requires a long travel time from Ho Chi Minh City, and if the company were to expand there would be little room for addition. VSIP is a “one-stop-shop” for manufacturing companies which are interested in cutting costs.

In the afternoon, we attended a second site visit at II-VI, a chemical company based in Saxonburg, PA but has a manufacturing plant in the Vietnam Singapore Industrial Park. II-VI faces many problems with their Vietnamese workforce as around the Tet holiday nearly every employee returns home for a two-week break. As a company, they must provide many benefits to their employees, such as higher wages, bonuses, and birthday parties, to keep their employees happy and retention rate high. The company also find training employees difficult as universities do not prepare students in the way II-VI requires. Even though they are headquartered in Pennsylvania, their Vietnamese location provides many advantages such as low labor cost, tax incentives, and a central location. II-VI produces photo optics and thermoelectrics that have many applications. The labor force is entry level and skilled workers that need to be trained by II-VI which is a challenge. They have a wide variety of products ranging from photonics to laser solutions.

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