From zero to hero: A downsized worker who owns a million-dollar factory

The company currently enjoys an export turnover of $4 million per year.

On the days leading up to the Lunar New Year, Lap Phuc Co.’s factory of more than 10,000 square meters in Ho Chi Minh City was still busy with the final stages of an automobile mold order for export to the United States.

Factory worker Vo Nhut Han stared intently at the control panel, a satisfied look on his face as the machine operated smoothly.

After graduating from a vocational school with a diploma in mechanical engineering, Han, a young man from the Mekong Delta’s Tien Giang Province, joined Lap Phuc. Over the past 15 years, he has become one of the factory’s skilled workers, earning a monthly income of about VND20 million (US$850). Thanks to the stable income and savings, he and his wife managed to buy land and build a house in the city. “I’ll probably work at Lap Phuc until I retire,” said Han, 38.

Operating the machine together with Han was Nguyen Van Tri, the factory’s general director.

“Each working day, I only spend an hour on management work, and the rest of the day is spent down on the factory floor working alongside my fellow workers,” said Tri, who is now in his 60s. For him, it’s as if being a worker runs in his blood.

Factory worker Vo Nhut Han (L) works on a machine at Lap Phuc Company in HCMC as its general director Nguyen Van Tri observes, January 2023. Photo by VnExpress/Le Tuyet

Tri is the eldest son in a family of 10 children. The day the country was reunified in 1975 was also the day that he finished vocational school. In order to earn enough money to help his parents raise his siblings, he applied for a worker position at the Southern Agricultural Machinery Company in Bien Hoa Town, nearly 40 kilometers (25 miles) from home. While many were concerned that the distance was too far, he persistently worked at his job. In order not to be bored, he spent the three-hour bus trip to and from work reading books on mechanics to improve his knowledge.

Thanks to his hard work and eagerness to learn, after a few years as a worker Tri began to be promoted to managerial positions with the highest position being workshop foreman. In 1994, the company downsized and he lost his job at the age of 35, after 18 years of working there. Despite knowing many mechanics-related jobs, he decided to start up his own business in the mold industry as he thought the manufacturing of any tool would require a mold. With a good mold, he thought, the products will look better and be of higher quality.

At that time, the mold industry was dominated by the Chinese. In order not to be “crushed to death” by the competition, he chose a separate branch focusing on making molds for clocks and fans instead of household appliances. To have the best products, he borrowed $120,000 from his relatives to buy a CNC milling machine, a very modern piece of equipment imported to Vietnam 25 years ago.

In 2002, Tri’s production facility was officially registered as a company. However, the turning point in Lap Phuc’s development came in 2005, when the company managed to borrow VND6 billion ($380,000 at the time) from the city’s stimulus fund to buy machinery from Switzerland. With new technology, the company could move away from manufacturing low-end molds.

With Colgate as its first major customer, Lap Phuc started expanding the customer base to include domestic FDI companies with investment from Europe and the United States. Eight years ago, using a stimulus loan of VND40 billion ($1.9 million at the time), he invested in more machines and built a standard factory to jump into the car mold industry for export to the U.S. market. After nearly 30 years, his business went from a small mechanics workshop, to a company with an export turnover of $4 million per year.

Fierce competition

However, the road to bringing Lap Phuc’s products to the international market was far from smooth. The company faced fierce competition from Chinese companies, which were the big brothers in the industry.

“When we first started, Chinese factories had already established a solid foothold so it was extremely difficult to squeeze in,” Tri said.

Tri explained that when two products are of the same quality and price, customers will choose the Chinese supplier because they will prioritize the one with more experience. In order to compete, he determined that his products must be cheaper and of higher quality, meeting the standards of Japanese firms.

Nguyen Van Tri inspects the equipment at his factory, January 2023. Photo by VnExpress/Le Tuyet

Taking advantage of his background as a skilled mechanic, Tri bought old Japanese machines and repaired and improved them to run the first stages of production. For the finishing stages, the products were made completely on new machines to achieve the most precise and beautiful molds, contributing to reducing the production cost.

In recent years, as the United States started imposing high tariffs on goods from China, Lap Phuc benefited since the tax on its products was only a quarter of the tax on molds from Chinese factories. As a result, orders for the company were abundant, even during times when the whole world entered a recession.

Not only having to overcome the fierce competition for orders, Tri also had to find ways to retain workers. Lap Phuc currently has 180 employees with incomes ranging from VND10-40 million per month depending on position (new worker, skilled worker or engineer). In order to retain them, he had to first ensure their income.

“No matter how good we are, if the wage is not enough for them to live, they will leave,” Tri said. He also said that it was also necessary to build a proper factory and raise Lap Phuc’s standing so that the employees could have faith in the sustainable development of the company.

According to Tri, many people in this industry want to hide their trade secrets or clearly divide the production stages so that the workers cannot know how a factory operates to create a product. However, in Lap Phuc, if a worker wants to learn more about the trade, know all the production stages or how to calculate product prices, they will receive support and guidance. Many employees after having improved their skills and gained experience have moved on to start up their own businesses or find job opportunities elsewhere.

An automated workshop at Lap Phuc Company. Photo by VnExpress/Le Tuyet

“I’m not saddened by that, on the contrary, I’m happy that the mold manufacturing community in our country will grow stronger,” Tri said. For him, the competitors at the moment are the Chinese, Japanese and Korean bosses and not the Vietnamese workers eager to learn.

Over the years, Lap Phuc has become a training workshop for many colleges and universities that teach mechanical engineering.

Do Phuoc Tong, chairman of the HCMC Association of Mechanical and Electrical Enterprises, said that Tri has gone from being a worker, to becoming a good business owner, whose factory has many high-quality product lines. Lap Phuc is one of the few Vietnamese enterprises that are investing heavily in technology and machinery in order to enter the big playing field of G7 countries, especially in the automotive molding industry.