HO CHI MINH CITY, VIETNAM — Dow Chemical International Ltd. quietly has set up a sales office in a country whose people once were victims of war defoliants developed by the company during the Vietnam War.
But to the handful of local staff working at Dow's representative office in Ho Chi Minh City (the former Saigon), the Midland, Mich.-based Dow Chemical Co. is just another foreign investor contributing to Vietnam's economic growth.
``Let bygones be bygones,'' said Nguyen Quang Thanh Doan, 35, a commercial development executive at Dow Vietnam.
``I think in history, every generation makes mistakes,'' he said in a recent interview at his office in Ho Chi Minh City. ``The good thing is that we all come to a compromise.''
Thirty years ago, Dow was one of several chemical companies that developed and produced Agent Orange and napalm — toxic defoliants that were used widely during the Vietnam War.
Presently, Dow's office in Ho Chi Minh City only sells limited volumes of middle-range resin products, such as polyethylene, mostly for use in Vietnam's fledgling film packaging industry. But Doan said he expects domestic demand for resins to rise by more than 20 percent during the next five years.
``We are looking for opportunities to penetrate the market in Vietnam,'' said the Moscow-trained chemical engineer.
Dow hired its first Vietnamese employee less than a year ago, and has yet to build up a distribution channel for the whole country, Doan said.
``Our main objective is to introduce the products,'' he said.
This is no easy task because Doan and his colleagues are selling high-quality products that most local processors cannot afford. He said Dow does not intend to compete on price against lower-cost suppliers in Singapore and South Korea.
The average price for a metric ton of Dow PE in Vietnam is about $950 — about 43 cents a pound — including cost, insurance and freight, Doan said. He added that the higher price is justified by less waste material during production, and higher tensile strength, compared with cheaper resins.
It usually takes two months for cargo from the United States to reach Ho Chi Minh City, so customers place their orders at least three months in advance.
But come 1999, Dow Vietnam will start to import PE from a 660 million-pound-per-year plant at Map-Ta-Phut, Thailand. The operation, called Siam Polyethylene Co. Ltd., is a joint venture with Siam Cement Group. The plant will be capable of making traditional PE resins, and metallocene resins using Dow's Insite single-catalyst technology.
Ordering from Siam Cement will cut down the lead time for orders from Vietnam to six to eight days, Doan said.
Most of Dow's customers in Vietnam are joint ventures between foreign firms and state-owned companies. Among them are the bottlers of Heineken and Tiger beer in Ho Chi Minh City, which together with firms in surrounding industrial provinces make up nearly 80 percent of Dow's domestic sales, Doan said.
The way ahead for Dow Vietnam looks bright to Doan.
``It's a free market now,'' he said.