The site visit for today was unique because it was an industrial park rather than one business office. Coming to the site, I had very little knowledge of what an industrial park actually was given that they don’t exist in the United States. Vietnam Singapore Industrial Park, or VSIP, is a place with all of the infrastructure put in place in order for foreign companies to lease the space for their factory and manufacturing needs. Driving through the property, it was amazing to see the sheer size of the land with how many huge factory buildings are being occupied. What makes this more than just a field with factory buildings is that there are also large residential, commercial, and entertainment areas for both the workers and others who wish to live in the park. VSIP began as a government initiative in order to bring jobs to the Vietnamese people and boost the country’s economy. In fact, the sites have created over 250k jobs, some requiring a high level of training and technical skill, for the Vietnamese citizens. Although the company started as a government initiative, it became a for profit company after beginning some park projects. With this, VSIP builds and develops the infrastructure in the industrial parks and only makes profit off of the rent foreign companies pay to use their land and amenities. All taxes associated with manufacturing in the country are paid to the government and profit from product exported belongs to the company alone. The ability for the workers to live and reside in the parks makes them a somewhat self sufficient community, however VSIP puts much emphasis on the integration of the parks with the surrounding communities. The idea behind the buildings of these industrial parks is really interesting to me because it makes it incredibly easier for foreign companies to establish a presence in Vietnam and in turn, help the country’s citizens and economy as a whole.
We were able to see first hand what it is like manufacturing in the park with our tour of the manufacturing company II-VI. Headquartered in Pennsylvania, II-VI manufactures thermoelectric, presiction optic, high precision ceramic, and metal matrix composite component pieces for companies around the world in several different fields of work. These types of products are used in gaming systems, medical equipment, defense equipment, automotive systems and many more. II-VI is one of the leading companies when it comes to producing these types of products. Companies like Microsoft, Sumitomo, and even the United States government give engineers at II-VI designs of what they want done and II-VI manufactures and quality controls the product. Each design is unique to the company and specialized equipment is required to meet the needs of II-VI’s customers. Some of the products they manufacture are incredible because they require pieces that are comparative to the size of a human hair. Although much of the technical and chemical explanations of how these products are made went right over my head, I do understand the importance of the product to the final device as well as the benefit of outsourcing for foreign companies. And of course, the added benefit to outsourcing in Vietnam.
The two visits from today go hand in hand in that VSIP provides the space and ease for II-VI to begin manufacturing in Vietnam for their benefit as well as the country’s. Having the opportunity to see II-VI, being a company that utilized the competitive space in the industrial parks, gave the perfect real life application of how manufacturing companies benefit from the high skill and low wage workers in Vietnam. From a business standpoint, the idea of a park that has the infrastructure and policies with the government built and stable, is such a genius way to both profit from the land as well as help the country grow as a whole. With the several VSIP parks already in place as well as those in the future, Vietnam can very quickly become one of the worlds main manufacturing hubs because of the ease provided by the parks. VSIP has considered building parks in surrounding countries as well which would help both in growing economies and increasing standards of living in this area of the world. Overall, it was very interesting to understand (or at least pretend to understand) what these companies do individually and how they are integrated with each other in the industrial park.