The Business Opportunities in Vietnam Aren’t for Everybody

Though the 19-year U.S. trade embargo against Vietnam has been lifted, business leaders should not rush headlong into new ventures there, according to Thomas M. Timberman, a Washington-based writer and author of “Vietnam: The No BS Business Guide.”

Much research and preparation is required to take advantage of opportunities there, he says. In an interview with Times correspondent Debora Vrana, Timberman offers advice on how to do business in Vietnam, identifies which companies are likely to benefit and sounds a warning on potential pitfalls, such as picking a joint venture partner.

Question: What advice would you give a local business person eyeing opportunities in Vietnam?

Answer: The first thing you must do is research. The last thing you should do is get on a jet plane and go to Ho Chi Minh City, formerly known as Saigon. There are lots of sharks, and you will be gobbled alive.

You need to see if there is a niche for you. And very likely there is a niche for your company, because this is a country that needs everything.

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Q: Which companies are particularly poised to benefit?

A: What you hear most about is oil. And there is no doubt that oil is a biggie. They have the largest undeveloped oil field in all of Asia. Obviously, your average Southern California business person is not going to go in there and get a piece of the field.

But there are a whole range of associated industries needed. If you have a successful transportation company or you make cleaning products for oil companies or machine parts for oil rigs, you have a big shot at one of the largest undeveloped oil fields in the world.

If you go beyond the oil, you’re looking at every kind of business you can think of, whether it’s repairing computers or selling fax machines and cellular phones.

Construction, next to oil, is probably the single biggest opportunity. Everything needs to be rebuilt. And this is not a small country. It won’t take many contracts for the Southern California construction firms to be successful.

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Q: What’s the downside?

A: It’s a developing country--some would say an underdeveloped country--with all the frustrations that come with that.

It’s got a climate that can only be called really, truly dreadful. You’re only dry a few months of the year. The transportation is also a downside. If you’re importing or exporting, you have to cope with a Victorian railroad and port system. Movement of goods is a problem.

Then you come to the bureaucracy. If you take a communist bureaucracy and plunk it down in a tropical climate and mix in residual ill will from 40 or 50 years of war with the West, what you get is not a whole lot of fast-moving efficiency. They not only march to a different drummer, they probably don’t have one. It can be terribly frustrating.

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Q: Say you’ve done your homework and determine that opportunities exist for you. How do you start?

A: Well, then get on the plane and go to Ho Chi Minh City, but go via Hong Kong or Bangkok. The business people in those two places are deeply involved in Vietnam and have had years of experience you can draw on. Make some appointments there, maybe with the Hong Kong-Vietnam Chamber of Commerce.

But one of the things you must do before you leave the United States is hire an interpreter-guide. Now, this is not a tourist guide, this is a 30- to 40-year-old, well- educated person, usually male. You find these people through the network of American organizations and law firms that have representatives in Ho Chi Minh City. You need someone to grease the skids and get you through the linguistic barriers. That’s the most effective way of introducing yourself to Vietnam.

And remember, never go to Vietnam the first time for less than three weeks, or you’ll never get anywhere.

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Q: I’ve hired a guide. Now what can I expect?

A: Then get the all-important car and negotiate the price. If you are a foreigner, you are not allowed to drive. You have to have a Vietnamese driver. You can take a taxi, but if you want to get out of the cities you need a car. The trains are nightmarish, and the buses tend to do things like turn over and roll off mountains because they are overcrowded. And if you showed up on the bus to meet a Vietnamese business person, it would be the last time you ever saw them.

So it’s best that you just have your guide you’ve already hired meet you at the airport with the Toyota--air-conditioned, of course.

Now, there is an organization I have not mentioned yet that is very important: the State Committee on Commerce and Industry, always abbreviated as SCCI--no one ever says the full name. They watch foreign investment and business and will arrange an interpreter. But we caution people not to forget this is a communist country. It still has an active secret police with an extensive network. So when you hook up with the SCCI, you are stuck with the person they send you.

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Q: Where should a business person stay?

A: The hotel is very important. That’s where you send your faxes, use a secretarial service and translate documents. It’s important for your image that you stay in one of the best hotels. That can get pricey, as the most expensive hotel in Ho Chi Minh City is $400 a night. Now, you don’t have to stay there, but you have to stay in one of the top five, or they will think you aren’t worth bothering with.

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Q: What are some key business faux pas you could make in Vietnam?

A: In Vietnam, a stranger would begin a business conversation with an introductory speech, telling where they came from and about their family. The last thing you ever do is get down to business. If you push and rush, you will find yourself ostracized.

Also business cards. You can’t just take someone’s business card and put it in your wallet. The custom is to raise it up in the air and say something, such as “Oh, you work for this company.” Then put it in your pocket, never in your purse or wallet. It’s that level of detail.

Losing your temper is one of the worst things you can do. Coolness and correctness, cool fire is as much as you can do.

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Q: What is the worst mistake you could make?

A: If you decide that indeed there is a real opportunity there, the biggest decision will be the selection of a joint venture partner or a Vietnamese associate.

But you have to be terribly, terribly careful about selecting them. The worst thing would be to select the wrong partner. We very strongly advise people to be cautious about taking into partnership a Vietnamese American. They are wonderful as consultants before you go, but if you want someone on the ground in Vietnam, you get someone who is a Vietnamese, not someone who comes with all this background.

If they left the country before 1975 and haven’t had an association with the place in more than 19 years, their contacts are limited. Also, the people there have been suffering significantly, so they don’t have a special feeling for these people. You should think about this twice or maybe three times. Our advice is to opt for the Vietnamese who has grown up under this current system.

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Q: What about the business culture there?

A: You have to remember that doing business or commerce was never highly regarded. That’s still somewhat of an issue. Also, the business person must deal not only with the national government, but with local governments, and these do not only overlap, they contradict. It’s very unpredictable.