O.C. Companies Ready for Push Into Vietnam : Trade: Some have already laid groundwork in Communist nation. For now, opportunities exist in construction, medicine, mining and travel.
Orange County companies are ready to start building everything from hotels to oil refineries in Vietnam and to begin marketing a wide range of products and services.
“The Pacific Rim is our next frontier,” said Jeff D’Eliscu, a spokesman for Irvine-based Allergan Inc., the world’s biggest manufacturer of eye-care products. “It’s one of our top corporate priorities.”
President Clinton’s order Thursday ending a 19-year trade embargo against Vietnam gave the go-ahead to companies that have been laying the groundwork for months, even years, to build a new market.
OmniTrak Group, a market research firm in Honolulu, has been studying business opportunities in Vietnam for the past two years. “Our research showed strong demand for U.S. goods,” said Chris Stewart, managing director of the firm’s Irvine office.
Among companies that stand to benefit are engineering firms, including Irvine-based Fluor Corp., which builds oil refineries and power plants. “Vietnam has one of the world’s largest offshore oil reserves,” Stewart said. “And there are opportunities for high-tech companies like AST (Research in Irvine) that might want to take advantage of Vietnam’s highly skilled and highly educated work force.”
Here is how some Orange County businesses, large and small, plan to capitalize on the new trade opportunities:
Allergan Inc.
The company is set to begin marketing its medications in Vietnam within the year and already has licensing from the Vietnamese Ministry of Health to sell a number of its products, including eyedrops for glaucoma and a treatment for cataracts.
More than half of Allergan’s revenue comes from sales to foreign countries, most of them in Europe. The company will sell its products in Vietnam out of its bases in Japan and Australia.
Spokesman D’Eliscu said the company views its imminent expansion into Vietnam as not only financially beneficial but also humanitarian.
“In terms of population, Vietnam is a relatively small market,” he said. “But we make products that health-care providers and their patients really need. It doesn’t matter what size the market is--we have an obligation to bring these products to all the nations of the world.”
Fluor Corp.
The engineering and construction company is a prime candidate for projects in Vietnam. Fluor already works extensively with most of the major oil companies--including Mobil Corp., which has been exploring for oil off southern Vietnam.
“Fluor’s traditional approach in foreign markets has been to follow our Western clients,” spokeswoman Deborah Land said. “In a country like Vietnam, it is likely we would be valuable in the development of natural resources.”
Also in its corner, Fluor has a wealth of experience in the Far East. “It’s one of our most active areas,” Land said. Fluor is now building two power plants in the Philippines, an oil refinery in Thailand and a chemical facility in Singapore.
Last month, two Fluor representatives accompanied U.S. Sen. J. Bennett Johnston (D-La.) on a trade mission to Vietnam, signaling the company’s interest in the area.
Wimberly Allison Tong & Goo
The Newport Beach architectural firm specializes in the hotel industry and has designed major hotels in the Far East. It is now working on a Ritz-Carlton in Bangkok and a Four Seasons in Tokyo.
So the company has every intention of bringing its blueprints to Vietnam, as well. Hotel developers are eager to build in that nation, said Ron Holecek, president and chief executive officer of the firm. He expects to begin a project in Vietnam by year’s end.
“Vietnam has a shortage of lodging facilities, and there will be a great demand for hotels as business activity picks up,” Holecek said. “With the lifting of the embargo, there will be a lot of resort projects going up. Vietnam has some wonderful beaches and a tropical climate.”
Holecek noted that developers from other countries such as Australia already have a foot in the door in Vietnam. “The U.S. has been left behind, though probably for good reasons,” he said. “Now that the market has opened up to us, we have some catching up to do.”
That newly available market is a welcome opportunity for the U.S. hotel industry, which has been hit hard by the recession. “This is very good news for us,” Holecek said. “The hospitality industry has suffered severe setbacks because of the poor economy and the overbuilding in the 1980s.”
ICN Pharmaceuticals
ICN Pharmaceuticals Inc. in Costa Mesa began taking action last year to be one of the first U.S. companies to venture into Vietnam.
Teodor Olic, a vice president for international sales at the drug maker’s SPI division, was part of a four-member California delegation, led by Lt. Gov. Leo T. McCarthy, that made a trade mission to Hanoi and Ho Chi Minh City in October.
As a result of contacts made then, ICN has already shipped samples of some dermatology products and has signed a preliminary distribution agreement with Vietnam Medical Import and Export, a pharmaceuticals company in Ho Chi Minh City. Other agreements may follow.
Olic sees a huge potential market among Vietnam’s 71 million residents. “They need everything,” he said.
With that population base--more than twice the size of California’s--and its huge oil reserves, Olic said, Vietnam could be a Far East power in a few years.
Meanwhile, ICN’s early strategy will be to concentrate on basic medical products. It will likely make small shipments of antibiotics and other drugs to treat hepatitis and malaria, and also do trade through its Mexican subsidiary, which makes antibiotics.
In coming years, as the market develops, Vietnam could become a customer for ICN’s more sophisticated and costlier drugs. “The scope of business at the beginning will probably be symbolic,” Olic said.
He sees ICN establishing itself permanently in Vietnam as it has in China, where it has a profitable joint venture with a pharmaceuticals company in Shantou, about 250 miles from Hong Kong.
Biomed Healthcare
Sentiment as much as the profit incentive is behind a small Irvine medical supply company’s plans to start trading with Vietnam.
“I feel strongly we need to go there to do something to revive the country,” said Lloyd Tran, a Vietnamese immigrant who is president of Biomed Healthcare. “You might not make a lot of money. You (have to be willing) to invest and take a low margin.”
Tran left his homeland in 1974, a year before the fall of South Vietnam. He said he was fortunate to have been in New Zealand, going to college on a scholarship, when the collapse came, so he was not part of the exodus of refugees. He has kept in touch with friends in Vietnam, though, and has seen how desperately medical supplies are needed.
Tran said he expects to travel to Asia in the next few weeks to make the contacts he needs to start trading in Vietnam.
His company’s basic medical products, like infusion pumps and intravenous solution bags, will likely be more in demand now than highly technical equipment and magnetic resonance-imaging machines, Tran said. Still, he does not expect to do as big a business in Vietnam as he does now with countries in Europe and South America.
He hopes to start trading with Vietnam by year’s end, he said, but “you have to go through the right channels.”
Travel World
The Garden Grove travel agency hopes to be the first to book Vietnamese visitors on flights to the United States. And the company is well-positioned to accomplish that aim: It already has licensing from the Vietnamese government to hang its shingle in Ho Chi Minh City, formerly Saigon.
“We can set up an office there next week,” Manager Michael Tran said.
Last year, Travel World arranged trips to Vietnam for about 15,000 customers, making the 14-year-old firm one of the largest specializing in Vietnamese vacations.
“Our goal is to do the same thing for the Vietnamese people who want to see the U.S.,” Tran said. “A lot of people here have family in Vietnam they would like to bring over for a visit.”
Tran, who fled Vietnam with his family as a teen-ager in 1975, when Saigon fell to Communist forces, said Travel World will hire a staff of local people to run the Vietnam office. He expects business there to start out slowly--about 20 customers a month--and pick up over time.
“This opens a whole new market for us,” he said.
Times staff writer Greg Johnson contributed to this report.
