Today, we visited the Vietnam Singapore Industrial Park (VSIP) and the optics company II-VI. VSIP builds and operates industrial parks where other companies come and build their factories. These companies enjoy many unique benefits that only VSIP provides. VSIP is partnered with the Vietnamese government which eliminates the need for a middle man in many required processes. Usually when a business is starting up in a Vietnamese province, they need to get permits from both local and national governments. However, VSIP provides a one-stop shop for its clients. They are allowed to issue these licencees as they are affiliated with the Vietnamese government. Also, customs is extremely streamlined. When most goods are shipped to Vietnam, they have to clear customs at the airport or the docks. However, VSIP has its own customs office so its clients don’t have to wait in line at the docks or airports. VSIP services a variety of customers and is a driving force in the globalization of Vietnam. VSIP has brought a lot of jobs to the Vietnamese people and thus helped to provide opportunities to the Vietnamese people.
Next, we visited a business in the Industrial Park. This Pittsburgh based company is known as II-VI. II-VI specializes is optics, laser components, semiconductor material. Their main incentive to move to Vietnam is Vietnam’s cost of labor. It’s super cheap. Vietnam has one of the cheapest minimum wages in the south east Asia. Thus, II-VI moved its high volume low cost products to their Vietnamese facilities. One of the major issues that II-VI faced is protecting its intellectual property(IP). The processes maintaining to their IP are kept in the US to avoid any issues with the Vietnamese government. The issue that II-VI faced is labor turn-over. Many Vietnamese people go home during the lunar new year known as Tet. The problem that arises with this is that many of these people do not return to work. Thus, II-VI had to develop ways to keep their employees coming back to avoid training new people. To do this, II-VI came up with different incentive programs and benefits to retain their employees. This is more cost effective than just hiring more new people as many of their jobs require multiple months of training and are often higher skilled positions. The products themselves are extremely numerous and are used in many different markets. The II-VI visit was extremely cool as we were able to tour their manufacturing plant and see their process first hand. The degree of precision was very cool to observe. Overall, it was a fun day and a nice start to the new week.