Monday, April 14, 2008

Twin Cities firm grows in Vietnam

HO CHI MINH CITY, VIETNAM - One day last month, businesswoman Poldi Gerard, her project manager, engineers and bankers poked around a construction site about 25 miles northwest of town. Dozens of construction workers were fabricating pilings that were being pounded into the ground by huge pile drivers, the first footings in a $52 million complex that will eventually employ 600 workers who will process 1,200 tons of garbage daily into rich organic fertilizer for sale to farmers.
The town is Ho Chi Minh City, also known by its historic name: Saigon.
To most Americans, it is still the place from which the last U.S. troops pulled out more than a generation ago after 10 years of battling North Vietnamese and Viet Cong troops bent on unifying their country under Communist rule.
I've long been fascinated by Vietnam. So when I had the chance to travel there recently, with immigrant acquaintances born there, a former Army captain who fought there in 1967-68 and to visit a Minneapolis-based company building there, I jumped at the chance.
Today, Saigon is the commercial hub of the fastest-growing country in Asia, behind China.
Once a war-torn, dirt-poor nation, Vietnam, since 1995, has opened its economy to trade and investment with the West and moved more than half its 83 million people from poverty to working-class status through an explosion in manufacturing, agriculture and rapid development in Saigon and Hanoi. And Vietnam, although belatedly, is determined to pace its economic growth with progressive environmental management, said Pham Van Hai, a scientist who heads the Center for Environmental Science and Sustainable Development in Hanoi.
One big sign: the 2005 accord between Gerard's company, Minneapolis-based Lemna International, through its Vietstar subsidiary, and Saigon's Department of Natural Resources and Environment for Lemna to finance and construct a garbage-to-compost plant that will eventually consume 1,200 tons daily of the city's garbage.
"This project is the first in Vietnam to make use of rubbish," said Do Thu Ngan, the lead lender and CEO of Saigon-based Sacombank Leasing Co., and a graduate of the University of Washington. "Vietnam now imports fertilizer and plastic. The garbage becomes fertilizer and the plastic from the bags will be recycled into pellets that will be sold to the plastics industry," she said. "Both products replace imports, and this addresses an environmental issue in Vietnam."
Poor waste-management practices and inadequately lined landfills over the years have resulted in serious water pollution.
That and past slash-and-burn agriculture, some deforestation and soil degradation has caused the government to try to set a new course through public education, stricter environmental laws, penalties and incentives for environmental remediation and sustainable environmental projects.
"Composting is the perfect solution for tropical countries with monsoon seasons," said Gerard, a vice president of Lemna who has overseen the Saigon project since 2002.
Lemna was founded in 1983 by Gerard's Vietnamese-born husband, Viet Ngo, a University of Minnesota-trained engineer who arrived in 1970. It also expects to make a buck -- eventually.
The city will pay Lemna $5 per ton of garbage delivered to the waste-processing plant. The garbage will be processed in several large buildings and stored in rows, sifted and aerated under long rows of plastic covers until the goop converts over several weeks in the intense heat to nutrient-rich fertilizer. That $5 is not enough to cover operating costs. However, Vietstar will make money on the sale of fertilizer to farm-service companies. It also will operate an on-site facility that will recycle the plastic bags in which Saigon residents put their garbage, by washing, shredding and melting them into condensed plastic pellets that will be sold to Vietnam's plastic manufacturers.
The garbage sent to the landfill already has been relieved of most of the aluminum, steel, wood, cardboard and glass that are collected daily by street recyclers and sold to industrial users in a country where most everything is reused or recycled.
"We will be able to cover our costs and provide a profit," said Gerard, 55, a Macalester College graduate who lives with Ngo and the youngest of their three sons in Minneapolis. "The garbage bags will be the feedstock for our recycling business. And as far as the garbage, microbes will do most of the work in the heat. You just manage Mother Nature with moisture and oxygen."
The government is providing certain tax incentives to Lemna/Vietstar to encourage maximum employment, and Lemna purposely has limited some automation to create jobs at the plant, which Lemna/Vietstar is obligated to deed to the city in 30 years.
Bob Bannerman, an official with the U.S. Commercial Service in Vietnam until he moved to Rome last year, said Lemna is an entrepreneurial company that has earned credibility over lengthy negotiations with a government still getting comfortable with private operators. Lemna approached Saigon with the project after a U.S. Trade and Development Agency study that proposed a Lemna-style plant for the city in 2002.
"Saigon lacked any modern waste-treatment facilities," Bannerman recalled recently. "Virtually all household waste was simply dumped into sewers that fed eventually into the many canals, streams and rivers that are a part of the Mekong River basin. The city government was very interested in attracting foreign investment that would provide technical solutions to this problem, but they needed to be convinced that Lemna could deliver what it promised."
It didn't help that Lemna's Vietnamese engineers discovered in 2006, through soil tests, that the land selected by the city in the "Northwest Sanitation District" was essentially a deep swamp without any real solid foundation. Given the weight of the plant facilities, they feared that they could not construct the plant as originally designed. Lemna tried to negotiate for an alternative site, and almost lost its investment license and financial backers.
Eventually, Lemna went back to its original design and the city agreed to some tax concessions to cover additional costs involved in Lemna's initial construction, now underway, of 6,000 pilings driven deep into the watery soil to provide a stable foundation for the plant.
"Lemna has been a Minnesota company that goes where some others fear to tread," said Steve Riedel, an international trade representative at the Minnesota Trade Office.
Lemna, based in a century-old restored mansion on historic Park Avenue in Minneapolis, operates a wastewater treatment division that has installed more than 300 pond-based municipal and industrial treatment facilities that rely largely on a natural, low-cost system for treating wastewater with duckweed, a fast-growing plant that absorbs pollutants.
Ngo, who also is an artist and art collector, still gets rave reviews for a water-treatment facility at Devil's Lake, N.D., that opened in 1987. Best viewed from the air, it is 50 acres of wetlands and serpentine channels filled with duckweed that continues to attract artists, tourists, environmentalists and engineers.
Lemna/Vietstar contracted with the Vietnamese army to clear the several-dozen-acre tract of mines and unexploded ordnance left over from the war. The site, about an hour northwest of traffic-clogged downtown Saigon on mostly one-lane roads, is in CuChi District, the site of fierce fighting in the late 1960s between U.S. troops and Viet Cong and North Vietnamese army troops who followed the Ho Chi Minh Trail through Cambodia and entered then-South Vietnam 20 miles away. They found refuge during daylight hours in 150 miles of underground tunnels that doubled as sleeping quarters, crude hospitals, mess halls, and munitions dumps, and that even ran under some U.S. bases.
Where once U.S. and Vietnamese forces warred and destroyed each other and the environment with weapons, defoliants and booby traps, Minneapolis-based Lemna and Vietnam have joined to create commerce and a cleaner environment.
I toured the Vietstar site with Paul Smallwood, a Vietnam native who travels regularly to Vietnam, a Minnesota engineer and CEO of FlowSense Building Services of Maple Grove; and Bob Carlson, a retired Minnesota CEO, West Point graduate and Army captain in the Mekong Delta in 1967-68. Smallwood, 48, who grew up off a Saigon alley, and Carlson, 66, are survivors of much tougher days in Vietnam, when destitute refugees swarmed Saigon and savage fighting in what Carlson came to see as a mistaken, unwinnable war for the U.S., ruled the land.
Later, we toured nearby the CuChi tunnels, also the scene of old armaments, bomb craters and other remnants of a war that killed or wounded more than 100,000 Americans and as many as 3 million Vietnamese.
Everywhere we went, we were embraced as friends. These are better times in Vietnam.
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