Monday, June 02, 2008

Made in Vietnam

Vietnam Time 7:45 AM Tuesday
DC Time 8:45 AM Monday

Yesterday was another overcast day in Saigon but that helps keep it cooler.

Today we had an all day meeting with the Phong Phu Textile Company. They are a state-owned company and a subsidiary of Viet Nam National Textile & Garment Corporation. They began in 1965 and now sell over $150m USD annually. The managing director, Madame Pham Minh Huong, was probably one of the most interesting speakers we've heard from yet.

Of the 40ish textile companies in Vietnam, only 3-4 are still state-owned, including Phong Phu. This means the country can make decisions that affect the company, though they rarely do. Phong Pho is in the process of privatization so that it may function completely independent of government jurisdiction.

They have seen a 13-20% growth over the past few years and employ over 7000 workers. Phong Pho, as well as most Vietnamese textile companies, has capitalized on the growing market left vacant by China, mainly in higher quality/lower volume textiles. China would work with best with Wal-mart, so Vietnam serves a different segment such as DKNY and Benetton or other companies that demand less volume but nice apparel.

You have most likely encountered Phong Phu, though under a different name as the sole supplier of Target’s towels. The company handles every process from spinning the cotton into yarn, weaving, dying, sewing & finishing, packaging and distribution. We took tours of the manufacturing floor and witnessed most of the processes.

Phong Phu pays these workers anywhere from $60-110/month depending on the skills required to do specific jobs. Sewing pays more than cutting towels; mechanics get paid more than box packers. They sponsor training programs to help increase skills and provide lunch to their workers for their 6-day work week. Yes six; that’s not a typo.

And this is one of the highly coveted jobs in the area because the benefits are considered very good.

Phong Phu’s biggest challenge is managing the supply chain for the goods and supplies required to stay in business. Everything from zippers, buttons, and mechanical parts can all hinder production in such a highly competitive industry if they are not kept in supply.

Recently, the Vietnam Textile & Apparel Association (VITAS) has been created, but these foreign associations have not mastered the lobbying or mass-marketing/educating that our US-based ones have. There is still too much competitive nature for the companies to work together to improve the world view that Vietnam is a rising player in the world of apparel or outsourcing textile functions.

Once the meeting was done, we were able to tour the War Remnants Museum. It memorializes the travesties done to the Vietnamese people during the war. Regardless of your thoughts on the war, it is extremely humbling (and a little uncomfortable) being in the country that your country fought with and seeing their devastation.

We walked back to the hotel and bought little things in each of the stores. Three of the girls are having dresses made. While clothing is fairly reasonable, I have opted not to get a suit or sport coat made. I don’t wear them enough to justify the expense.

Last night we hit the Amigo Steak House. OMG, do you know what it's like to have eaten for almost two weeks and not felt bloated-full? We all treated ourselves to a steak and baked potato. Just a nice change from always eating spring rolls and prawn soup.

It took us about 90 minutes to walk the 3 blocks because everyone was loading up on the great deals. Saigon has MUCH better shopping than Hanoi. Silk ties are $10, shoes and handbags are $5. Runners can be anywhere from $3-$9. Quality is iffy here and there but at these prices it doesn't really matter much.

I'm off to breakfast and then we meet with two companies today. Tonight is our Bonsai River Cruise so more on these events tomorrow morning.

The Vietnamese Mini-Van



Blogger Mrs. Chili said...

WHY do those babies not have HELMETS?!?!

9:43 PM  
Blogger JustDaddys.Net said...

HOLY COW. Your trip so far looks amazing. I will be checking back to keep up. I wanted to share with you the new site over at Its a place where fathers new and old, verteran and novice can come and trade tips, tricks, or just shoot the breeze. We are a growing community right now and I would love to have someone with your knowledge and experience get involved in on the ground floor and be a resource and a community leader. Thank you for your time and I hope to see you over at the boards.


9:19 AM  

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