The past decade has seen a rapid rise in business activities with Vietnam, in large part due to the country’s attractive economic prospects and labor costs. With the signing of the TPP and the EU Free trade agreement, investors can expect to see even more favorable conditions for operating within this frontier market. We are privileged to have spoken with Andy Watt, Director of Asian sales for J&J Log and Lumber, who has been operating in Vietnam since 2001. Andy shares some of the key lessons he learned in his years of experience, as well as the future he sees for foreign businesses venturing into Vietnam.
Would you mind telling our readers a little bit about what you do?
We are manufacturers with sawmill and kiln facilities in New York, Pennsylvania, Virginia and West and Virginia (under the names of J&J Log and Lumber Corp and Blue Ridge Lumber Company). Our strengths are in the production and shipment of North American hardwood kiln dried lumber and logs. I started in this business in 1972 when I first began my college career.
How does your education relate to your business?
I ended up going to graduate school (after receiving two forestry degrees) at the School of Environmental Science and Forestry at Syracuse University in 1977. During my college career, I worked at our J&J sawmill headquarters located in Dover Plains, New York. I learned how to work; simple as that. I became a lumber inspector, worked on all sawmill machinery in production, learned how to control kilns, I became the log buyer and eventually I ran a sawmill and kiln facility in Pine Plains, New York where I was also responsible for sales (I was 27 at this point).
In the 1980’s, I began exporting to Europe, and then followed the markets to Asia and the Middle East. Currently, I am the director of Asian sales for our group of sawmills. I typically travel two or three times per year to Asia where I have developed long term relationships with my customers based on consistent quality, timely shipments and trust.
How did Vietnam become a part of your business?
I came to Vietnam in 2001 after the US and Vietnam became trading partners. I traveled in July from Hanoi to HCMC, where I settled – it was the place where the majority of factories were being built that use hardwoods in their furniture and flooring production.
Vietnam is now the second biggest market for my lumber (second to China). Many of my Taiwanese and Chinese friends were building factories around Ho Chi Minh City due to factors that they did not have to deal with in China.
Can you share some of the key lessons you learned during your years operating in Vietnam?
Lessons are many but the biggest for me is always dealing with trustworthy customers where payment is not going to be an issue. I started in the early 2000’s with over two hundred potential customer factories and now have 16-17 partners who I deal with on a daily or weekly basis. This process did not happen quickly. When I started in Vietnam, the majority of factories were making outside furniture, the process of learning to use kiln dried with gluing in factories was not easy for some. Most of my customers are still either of Taiwan or China ownership.
Where do you see Vietnam in 5 years as it relates to your business? What would you tell young people interested in doing business with Vietnam?
I only see Vietnam continuing growth similar to Taiwan in the 1980’s. The economy will continue to improve and the labor will continue to become more expensive so the furniture/flooring/cabinet manufacturers might again move to Laos/Indonesia/India or the like. Young people will have no difficulty working in Vietnam as many expats work in Vietnam already. Because of my age (as I could have been in the Vietnam War), I was slightly nervous in 2001 when I arrived but the people (both young and old) have treated me with nothing but respect.
What are some negative and positive attributes about doing business in Vietnam that you feel most US executives do not appreciate?
Most executives would very much appreciate the use of road signs – get a good driver who speaks English for sure. I have been using the same car and driver for some time now. Do NOT think you can drive yourself! Traffic is not easy and many road infrastructures need continued improvement. I live always in District 1, on an early visit to Ho Chi Minh City, my driver went down a road of approximately one quarter mile….seven times…before we saw a small sign for the large factory that I needed to visit.