Sitting in his spartan office in the middle of Vietnam's bustling business center of Ho Chi Minh City, Lai Anh Viet talks about a business strategy that sounds familiar to plastic executives everywhere: find more technologically intensive, higher-margin business.
Some might consider it odd that Lai, the general director of injection molder Saigon Plastic Co., would espouse that, given that Vietnam right now is getting attention as a place whose competitive strength is that its wages are even lower than China's.
But Lai said his company, which switched from state-owned to being jointly government and privately owned two years ago, needs to become more efficient to handle the competition expected as his country opens and joins the World Trade Organization and regional trade pacts.
In a sense, SP's transformation mirrors that of Vietnam's, which is trying to keep its economic growth going by opening up to world trade. Lai said the firm enjoyed special government support when it was owned by the state, but those are being removed as it has moved toward at least partial privatization.
The company is a midsize molder for Vietnam, with 150 employees and 10 injection presses pumping out commodity items like garbage cans, pallets, storage bins and traffic cones, markets whose profitability depends more on fluctuating resin prices than cheap wages.
But it also has a division that builds fiberglass boats, where Vietnam's wages, which can be about US$60 a month for an unskilled worker, help its competitiveness, he said in a Nov. 16 interview.
``We want to develop higher-value-added products,'' Lai said, speaking through a translator. ``We are looking for foreign partners with new technology ... and to sell to foreign markets.''
Some of the ideas he is exploring seem far removed from molding garbage cans: Lai said the firm is looking at unspecified opportunities in nanotechnology molding to find a way to take advantage of Intel Corp.'s decision earlier this month to triple its investment in its Vietnamese factory, to US$1 billion, to package and test microchips.
Saigon's specific investments are more down to earth, though.
The firm has the largest injection press in Vietnam - 3,000 metric tons - and plans to buy another, even larger press. It recently invested in Austrian recycling equipment, to find a way to cut resin costs that have doubled in two years.
Vietnam's plastic industry is particularly susceptible to resin price increases: It imports more than 85 percent of its raw plastic, which has prompted industry leaders here to urge the Vietnamese government to step up investments in petrochemicals to boost their competitiveness.
He said the company is keen to find new sources of raw materials such as recycled resin, and form technology or investment partnerships with foreign firms.
It's interested in boosting exports, including to North America, which now account for only about 10 percent of sales and are concentrated in Asia, he said.
Lai said he considers his firm competitive (it achieved ISO 9001:2000 certification in 2002), and it is investing in training for its workers.
While he said switching away from complete state ownership has given the firm more flexibility to respond to the market, Lai concedes it won't always be an easy transformation.