Monday morning started early. We boarded the bus en route to the Bình Dương Province, home to a Vietnam Singapore Industrial Park (VSIP) site. VSIP is a joint venture between the governments of the two countries. There are nine sites throughout the country, and they drive development through foreign investment. VSIP provides ready made factories, plots of land, infrastructure, security, maintenance, and on-site customs to their tenants. Businesses from all industries reside and manufacture within the park. In addition to being an industrial park, VSIP also functions as an integrated township. Affordable housing options are offered as well as shopping centers, parks, and universities. Reiterating one of their main selling points, VSIP serves as a complete one-stop shop. They streamline every process to ease and facilitate foreign investments. VSIP has been incredibly successful and has become it’s own profit-generating entity, with plans to grow.
However, VSIP is not one-of-a-kind. There are 30 other industrial parks in just this province alone. There are many pros to these types of establishments. VSIP makes the lives of foreign investors much simpler, which is currently the force behind the improving economy of Vietnam. Companies are able to easily move from other countries in to the industrial park and take advantage of the many amenities, including Vietnam’s low wages. Not only does this allow businesses to lower production costs, it creates thousands of jobs locally. On the other hand, there are also some cons to industrial parks. First and foremost, they produce a tremendous amount of waste and pollution. VSIP recognizes this and places a high value on the environment, which is reflected through their many initiatives.
I was thoroughly impressed by the sheer size of the industrial park. It is essentially like a small city. VSIP seems to have the upper-hand in the industrial park competitive sphere, not only because they have significant government support, but also because they provide incredible infrastructure and services that are not common in the developing Vietnam. This becomes evident by driving through the park. Just from my own knowledge and what I saw today, VSIP seems like a top-tier place to invest, and clearly it has connected Vietnam globally.
After spending some time in the enormous VSIP shopping mall, and taking a spin on the “tutu” train, we visited the site of II-VI Incorporated. II-VI is a manufacturing company that occupies a site in VSIP. I am not an engineer, so some of what they do is over my head, but they mainly produce different electric and optical components for things such as semiconductor equipment and military use. The presenter at II-VI explained an attractive feature of investing in Vietnam that I had not heard much of up to this point. There are huge tax breaks for foreign companies, and they are able to take advantage of them for years and years. This shed some more insider light on why foreign investors are so eager to move to Vietnam.
Due to II-VI producing highly specialized products and using highly specialized equipment, it therefore takes quite a bit of training for employees. This can range anywhere from 3 months to a few years. After walking through the production floors, I completely understand why. I couldn’t believe the tedious work the employees were doing. I had always sort of known that someone had to be making everything all these years, but it was strange to actually see it live and in person. The labs were loud and industrial with weird lighting. I had no idea what any of the equipment was and it all looked so intensely technical. I couldn’t imagine doing that all day, every day. I am so glad I got to see it, for now I have a new respect for the industry and all factory workers across the globe. II-VI had really nice facilities, but I am sure there are many people doing similar tedious work in much worse conditions, which is why globalization is key. Improvements in quality of life are just as important as in the economy.
Most importantly, this site visit definitely taught me that I picked the right path in life. I’m a business student through and through. You will be able to find me in a fancy high-rise office, far away from any industrial production that may be going on!