As I was driving my now-familiar route from Fayetteville to Little Rock, a sign on a building caught my eye with words I hadn't seen since Southeast Asia.
A few Google searches later and sure enough, it was the site of the first Vietnamese company to open a manufacturing facility in the U.S.: Vinh Long. While they announced their expansion to Arkansas in 2013, it has taken them some time to juggle cultural and industry learning curves. They will finally start trial production this summer.
After a winding series of emails, I ended up meeting with the bi-national team that's been pulling Vinh Long Arkansas, LLC together. The site will produce wooden furniture, primarily for IKEA, though the leadership team has big dreams to expand their U.S. business quickly.
It was special to see these two worlds collide. Who would have predicted I'd be talking about bun cha and Phu Quoc in a warehouse in Morrilton, Arkansas?
Investment now $15M, Morrilton site gears for summer start
By Emma N. Hurt
In 2013, the state of Arkansas announced that the first Vietnamese company to open a manufacturing plant in the United States selected Morrilton as its new home. More than three years later, the plans conveyed in that news release finally are becoming a reality.
Vinh Long, a woven-products and furniture manufacturer based in Vinh Long province in Vietnam's Mekong delta, promised to invest $5 million at the site of the former Bosch factory on Telex Drive. It originally planned to begin production in 2014.
While that timeline has been extended, so has the size of the investment, to about $15 million. The more than 200,000-square-foot building has been extensively renovated, has a new coat of paint and is just starting to fill with new manufacturing equipment.
The company now employs 11 people and plans to begin trial production this summer with 25. Its owner, Phan Thi My Hanh, bought a house in the area.
"They are definitely determined to make this business work," said Jerry Smith, president and chief executive of the Morrilton Chamber of Commerce.
"The owner, Madame Hanh, is very much involved with it, and she takes everything about this project very personally," Smith said. "I appreciate that she is bullish, if you will, on Morrilton and the economy here. She really thinks this is a growing community."
Hanh has family members in Maumelle and purposefully selected Arkansas for its slower pace of life and ease of access to the wood needed for furniture, said Le Thai Tinh, Vinh Long's sales director who is coordinating the setup of the American operation. He has been back and forth from Vietnam about 20 times, so far.
"This is not only for business; it's not only to make money," he said of Vinh Long Arkansas. "Part of our mission is to create something here for the community."
Of the 11 employees in Morrilton, three used to work in the same building, when it was the Bosch plant. When Bosch moved its production to Mexico in late 2012, 140 people lost their jobs. Vinh Long has been working with the University of Arkansas Community College at Morrilton to coordinate internships, recruiting and ongoing training programs for employees.
"I think what Vinh Long is bringing in is a sense of high-tech," said Robert Keeton, division chairman of technical studies at the college.
"Everything they're doing is going to be automated. They're bringing in some state-of-the-art equipment over there. Once they're fully operational, I think they'll be a pretty significant employer in Conway County."
Of the delayed timeline, Smith said, "They have nothing other than the intention to do what they said. It's just taken them longer to adapt to the way things are done in the U.S."
Tinh said there was a steep learning curve between business in his home country and business in the United States.
Specifically, he noted that there had been some miscommunication involving contractors and the renovation of the building.
"The way of working with contractors here is very different. In Vietnam, they give you a quote at the beginning and that's what you pay at the end," he said. "But here, the price can end up being more or less than what they originally quoted."
Additionally, the operation in Morrilton -- particle board furniture manufacturing -- was an entirely new segment for Vinh Long. Until now the manufacturer primarily produced woven goods in a 700-person factory and a 10,000-person team of weavers in Vietnam.
Ninety percent of the company's business is done with furniture retailer Ikea.
Hanh decided to expand her company into wooden furniture with a new workshop in Vietnam and in the U.S. at the same time, learning everything from scratch. Vinh Long ended up hiring a German consulting company to help figure out what machinery to buy and how to lay out its new facilities, also contributing to the delay.
Smith said the company is "going first class on everything they do." He said that when people ask if it's ever going to open, "I say, 'They've spent too much money not to.'"
"I'm just really looking forward to when they get going," he said.
"It's good to see it all finally coming along," said Danial Evans, information-technology manager and Vinh Long Arkansas' third employee. "For six months when I first started we were just cleaning, painting and prepping. And all of a sudden machines are starting to roll in."
Marc Roberts is working at the plant through an internship with the college, where he studies industrial mechanics and maintenance technology.
"From what I can see here and from what I see of the people they're trying to hire, it's going to be great for the community and a great relationship between the two countries," he said.
Mike Preston, executive director at the Arkansas Economic Development Commission, agreed that there are "some learning curves along the way for any country to start doing business in another."
"It takes them a while to understand our customs and our traditions," he said. "Every country is a little different, and you're talking about a country halfway around the world."
Vinh Long was promised an incentive package from the state once it employs 75 people.
"Until then, we will help them however we can to get them to that point, as long as it's not monetarily," he added.
Preston said Vietnamese companies "are just getting ready to take off" and have "a world of potential" in terms of global investment. He said the commission has two offices in Asia to help foster relationships with that part of the world.
In 2015 Gov. Asa Hutchinson signed a memorandum of understanding with the chairman of Dong Nai province's People's Committee at a ceremony in Little Rock. The gesture formally declared a mutual desire to keep expanding the relationship between the state and the province just north of the country's capital, Ho Chi Minh City.
Tin Nghia Corp., a major Vietnamese company in Dong Nai, opened a trade office in Arkansas about the same time.
The Vietnam-U.S. trade relationship represented about $52 billion in both directions in 2016. It is the United States' 12th-largest import partner.
While Vinh Long posted $35 million in export sales last year, it has ambitious plans to make that $100 million by 2020. The company hopes to quickly start diversifying its business through other opportunities in the U.S. market.
"This is our future," Tinh said, gesturing to the Arkansas plant.
SundayMonday Business on 03/26/2017