At midday, the sky is clear and blue. The air at the Pan Viet Company's demonstration banana plantation, located just to the northwest of Ho Chi Minh City, is still and humid, almost to the point of being stagnant.
In an instant, a layer of black clouds gathers, and pea-sized raindrops roll down. More than 100,000 banana trees are lined up like soldiers on parade, and the raindrops play an imposing accompanying drum roll on their emerald leaves.
In less than five minutes, the clouds have taken the rain back, and the air returns to its original state in the blink of an eye. The banana groves resume their silent vigil, with only a slight breeze left over that causes the leaves to roll like a wave headed straight into the sky.
The tropical climate of heavy rains and high temperatures typical of the Indochina Peninsula is a natural hothouse for banana growing. Vietnam's land, ten times larger than Taiwan's, provides broad spaces to roam, and Pan Viet chairman C.F. Chang moved quickly to seize the investment opportunity.
A blank blueprint: A son of the soil from Lungtan Rural Township, Chang knew from his early years that Taiwan's agricultural technology was highly refined, but that the small farmer system fragmented the land, so that with small plots and high manpower costs, production has become increasingly expensive. Thus he began to expand out-ward over a decade ago in search of a low-cost production environment. He has banana plantations in Thailand, the Philippines and Indonesia.
In 1988, which was the second year after Vietnam began to permit foreign investment, Chang came by himself to Ho Chi Minh City. Upon inspecting local conditions, he discovered that the natural surroundings in southern Vietnam closely approximate those in the banana growing areas of central and southern Taiwan. Moreover, since unification under the communist system in 1975, Vietnam has used collective agricultural production; though this has dampened enthusiasm for work among ordinary laborers, it has had the advantage of concentrating land, satisfying the economic requirement of large scale production. Thus there were great possibilities for the banana industry in Vietnam. "It was like a blank blueprint sheet, which could be mapped out from scratch in the most ideal way to maximize its potential," he says.
To be sure, three years ago this 120-plus hectare farm was just a design on a blueprint. Today there are not only 100,000 banana trees making up an impressive forest, all of the peripheral facilities that are necessary--a packaging factory, a dock and warehouse, and container shipping--are complete. And this demonstration plantation accounts for only 2% of Pan Viet's Vietnam operations. Six teen other farms in various states of development are sprinkled across four provinces, with the largest having an area of nearly 2,500 hectares.
Making something out of nothing, from going it alone to having more than 10,000 employees, C.F. Chang relies on more than just external circumstances such as the geography and climate of Vietnam.
Hiring 24 Vietnamese teachers: Most foreign businessmen coming to invest in Vietnam have their eyes on nothing other than the abundant natural resources and the cheap labor costs. Chang is no exception, but takes a somewhat different approach.
When most people first get to Vietnam and see such an excellent investment environment and market potential, they become charged with excessive expectation and rush off to fix a plan and set to work, fearing only that they will be left behind by competitors. But Chang, built like an athlete, fond of wearing sneakers, swift and fluid in motion, was not so easily moved to action. "I stayed in the hotel for a whole year, without doing anything," he reveals.
The fact is, he hired 24 retired Vietnamese officials with European or American educations to serve as teachers and guides, helping him find his way through Vietnam's laws and regulations.
"This was the equivalent of hiring a 24-man staff to help him do an investment climate assessment and evaluation," says Huang Chie-yien, deputy director of the Ho Chi Minh City office of the China for External Trade Development Council (CETRA). In this way Chang avoided a number of mistaken paths that are often taken because of lack of know-ledge of the law, and indirectly laid a foundation for government-business relations.
For example, in order to lower their tax rate, many Taiwanese businessmen choose to invest in a joint partnership with a local state-run enterprise. But Chang discovered that the provisions of the foreign investment law related to such joint operations excessively guaranteed benefits for the Vietnamese side. He was instead willing to give up taxfree or reduced tax incentives in order to have full operational control and retain his autonomy. As a result, while many joint ventures end in squabbles or are dragged out in implementation because the local partner doesn't come up with enough capital, Pan Viet has been able to move full steam ahead without looking back over its shoulder. As for the high taxes, Chang is pragmatic: "As long as I'm making money, who's afraid of paying taxes?"
Going against the current: Chang has also taken a quite different path than other Taiwanese businessmen. Manufacturing industries which invest in Vietnam usually have their eyes on the labor force, and focus on the cities (like Ho Chi Minh) where the population is most concentrated and the level of education relatively high. But he went straight to the countryside--in fact, to the special economic zones or agricultural collectives where productivity has been very low.
Besides the consideration of low land costs, the concept of "bringing Taiwan's experience in agriculture together with Vietnam's natural resources" is just right for what the Vietnamese government--stuck with backward local production methods and an urgent need to close the gap between city and country--wants and needs. It has thus won their strong support.
This demonstration farm, located about two hours drive from Ho Chi Minh City, was his first successful model experiment.
The forerunner of this plantation was a collective farm. "Well, they called it a farm, but actually it was overgrown with weeds and brush and the soil was in terrible condition," recalls Chang of its status at that time. But this was no problem for him, as "it was really easy to improve the soil quality using Taiwan's agricultural technology." He reworked the land, repaired the irrigation system, developed sprouts, planted bananas. . . . it's been only three years and this is the second season of harvesting bananas.
The greatest headache in communist societies has been labor efficiency. But this improved greatly with his "foreign company" policy of high wages and his "platoon leader" management methods.
Climbing up onto an observation platform at the farm, banana trees are lined up in meticulous ranks one after another in the square and regular groves. More unusual is that each and every tree is upright and green, with hardly a single withered leaf to be found. "Each worker is only responsible for a single task, and each is assigned an area of responsibility, so wherever a single withered leave appears, we can find out who is responsible at once just by checking the layout," he notes.
Setting up a research institute to develop sprouts: He has also imported a great deal of agricultural technology. In a white building in a suburb northeast of Ho Chi Minh City, more than 50 white-clad researchers are quietly busy in their labs slicing, splicing, and disinfecting. This first ever such center in Vietnam is his secret weapon for employing agricultural technology and raising the value of production.
Bananas are harvested once a year. After the annual haul, it is necessary to cut away the old trees and plant new sprouts, so there is a huge demand for the latter. Traditionally banana trees were grown with the "sprout transplantation method." Mature trees naturally produce shoots and sprouts for other trees to grow, and farmers would simply cut off the sprouts on the trees in their groves and replant them.
Although this method is easy and has no over-head, it spreads diseases easily, which affects the harvest as well as quality. The newly developed "organized cultivation method" raises sprouts using the asexual reproduction techniques of biotechnology. The quality of the trees is insured by going through the lab's rigorous control of the cultivation environment and process.
Chang uses the organized cultivation method. You only see workers cutting off a tiny basic cell from the starting point of the banana tree, and adding in just the precise amount of nutrients. After high temperature disinfecting and growth stimulation, a tiny little whitish-green sprout pops up after just a few days. After repeated division and cultivation, nearly 60,000 sprouts can be raised. Thus he has a continual supply of banana tree starter kits.
Spirit of a farmer, methods of a businessman: The success of his commercialized form of operation has won the trust of Vietnamese officialdom. Thus, when he planned to extend his production techniques to other products, like pineapples, mushrooms, potatoes, and other cash crops, local governments from a variety of provinces competed to offer land. Taiwan Central Trading and Development Corporation later entered the investment ranks. His plantations opened one after an other, going all the way up into central and northern Vietnam. The name of "C.F. Chang--King of Agriculture" began to spread.
Despite this, Chang's method of heavy investments and rapid expansion inevitably put him in a high-risk, slow-return position. It's not that he doesn't understand this situation, it's just that he can't stop himself.
Not only does he personally enjoy "the thrill of expansion," his investments are worth 100,000 employment opportunities to the Vietnamese government. They are also precious in upgrading the local agricultural economy and balancing out development across regions. "Right now neither side wants to call a halt," explains Chang. Chang has the habit of smoking when he's thinking about a problem, and there's virtually never a time when he's not got a cigarette in hand.
Fortunately, under that businessman exterior, Chang says there still beats the heart of a farmer. "When there's too much trouble, or some insoluble problem, I just run off to the cultivation center," he laughs. "When I see how one thin cell can be divided to grow tens of thousands of little sprouts, all my troubles disappear, and I feel boundless hope."
[Picture Caption]
C.F. Chang has transplanted Taiwan's experience in agriculture to Vietna m, resulting in this vast expanse of banana trees.
After the banana tree sprouts are removed from the cultivating dish, the y must still spend ten days in the sprout planter before they're ready t o adapt to life outdoors.
Bottle after bottle of banana tree seeds provide the basis for the uninterrupted proliferation of the groves, and are also a result of the courage to invest in agricultural technology.
Check it out--do these crystallizations of sweat and tears have any defects?
"We're going to wrest the global banana market away from the Philippines," boasts C.F. Chang.
After the banana tree sprouts are removed from the cultivating dish, the y must still spend ten days in the sprout planter before they're ready t o adapt to life outdoors.
Bottle after bottle of banana tree seeds provide the basis for the uninterrupted proliferation of the groves, and are also a result of the courage to invest in agricultural technology.
Check it out--do these crystallizations of sweat and tears have any defects?
"We're going to wrest the global banana market away from the Philippines," boasts C.F. Chang.