Local firm to turn trash into treasure in Vietnam

Viet Ngo says the garbage-to-compost plant he's building will be good for Minnesota, too.

By NEAL ST. ANTHONY, Star Tribune

A $53 million garbage-to-compost plant developed by a Minnesota company with Vietnamese roots will open in several weeks about 35 miles northwest of the former Saigon.

"This has been a very long and hard undertaking,'' said Viet Ngo, chief executive of Minneapolis-based Lemna. He is a South Vietnamese immigrant and University of Minnesota-trained engineer. "An international effort in my native country ... and it will be great for Lemna, Minnesota and Vietnam."

The Lemna project, built on tunnel-infested ground that 40 years ago witnessed horrific fighting between American and Vietnamese troops, spanned nine years. It evolved from an international development study that found that what is now Ho Chi Minh City must divert garbage from open sewers and two huge, fly-invested landfills to a facility that could turn the problem into rich organic fertilizer.

"This was a long pregnancy," said Poldi Gerard, Ngo's spouse of 29 years, business partner and general manager of the 4-acre project. She has spent most of the last several years in Vietnam. "This project is about economics and environmentalism. It also will be the flagship for others we will do. We keep garbage out of the landfills, do something useful with it and, eventually, make a profit."

The project broke ground in early 2008. Dozens of construction workers fabricated pilings on-site that were pounded into the ground by huge pile drivers, the first footings in a complex that will employ 600 workers by 2011. They will process 1,200 tons of garbage daily into compost for sale to farmers. The business is expected to cut Vietnam's imported-fertilizer bill by tens of millions of dollars annually.

Nothing moves fast in Vietnam, save the darting motor scooters and bicycles on the streets of the former Saigon. The financial credit crisis of 2008-09 halted construction and one financial partner backed out. In the end, Lemna's equity contribution totals nearly $11 million, matched last fall by a $5.6 million investment by VINA Capital, an American concern that operates Vietnamese investment funds, and about $36 million from lenders.

Saigon, as it is still commonly known, is the commercial hub of the fastest-growing country in Asia behind neighboring China to the north.

The Lemna plant, operated by Lemna's Vietstar subsidiary, lies in the Cu Chi District, a fairly tranquil area of farms and forests. But during the war, Cu Chi was synonymous with close-quarter combat. Miles of tunnels provided shelter and safe routes for local Viet Cong and North Vietnamese troops entering South Vietnam from Cambodia, about 15 miles to the west.

Since 1995 and the normalization of relations with the United States, Vietnam has opened itself to business with the West and moved 65 percent of its 83 million people from poverty to working-class status through manufacturing, agriculture and information technology, particularly around Saigon and Hanoi.

Although belatedly, the country is now determined to pace its economic growth with progressive environmental management, Pham Van Hai, a scientist who heads the Center for Environmental Science and Sustainable Development, told me in an interview last year.

The Lemna-Vietstar plant is evidence of that.

General Electric just announced plans to build a wind-turbine manufacturing plant, oil-exploration firms are prowling coastal waters off Vietnam, and the country is moving to overhaul its aging power-generation and distribution systems.

The Vietstar project is the first to turn organic garbage into fertilizer, said Do Thu Ngan, the CEO of Saigon-based Sacombank Leasing.

Vietstar will be paid $6 to $12 per ton for fertilizer under an agreement with the city of Saigon.
Paper, cardboard, wood, metal, glass and just about everything but organic garbage is recycled by scrap merchants and industry in Vietnam. That leaves small blue bags of organic waste left outside households that are picked up a couple of times a week by garbage trucks.

"Vietnam now imports fertilizer and plastic, DoThu Ngan said. "The garbage becomes fertilizer and the plastic from the bags will be recycled into pellets that will be sold to the plastics industry. 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 pollution. That and past slash-and-burn agriculture, deforestation and soil degradation have caused the government to plot 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," Gerard said.
Lemna, headquartered in the elegant old mansion on Park Avenue that once was home of the Brooks family that made its fortune in timber, was founded by Viet Ngo in 1983 as a wastewater treatment facility designer. The company has expanded into energy and other projects from the Midwest to Vietnam and Nigeria. It has built 300-plus pond-based municipal and industrial treatment facilities that rely largely on biological, low-cost systems for treating wastewater pollutants.

Bob Bannerman, an official with the U.S. Commercial Service in Vietnam until he moved to Rome in 2008, helped Lemna approach the Saigon government after a U.S. Trade and Development Agency study in 2001 said Saigon was threatened by sewage-related pollution.

"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," he said. "The city government was 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."

Nothing moves fast in Vietnam, save the darting motor scooters and bicycles on the streets of the former Saigon. The financial credit crisis of 2008-09 halted construction and one financial partner backed out. In the end, Lemna's equity contribution totals nearly $11 million, matched last fall by a $5.6 million investment by VINA Capital, an American concern that operates Vietnamese investment funds, and about $36 million from lenders.

Saigon, as it is still commonly known, is the commercial hub of the fastest-growing country in Asia behind neighboring China to the north.

The Lemna plant, operated by Lemna's Vietstar subsidiary, lies in the Cu Chi District, a fairly tranquil area of farms and forests. But during the war, Cu Chi was synonymous with close-quarter combat. Miles of tunnels provided shelter and safe routes for local Viet Cong and North Vietnamese troops entering South Vietnam from Cambodia, about 15 miles to the west.

Since 1995 and the normalization of relations with the United States, Vietnam has opened itself to business with the West and moved 65 percent of its 83 million people from poverty to working-class status through manufacturing, agriculture and information technology, particularly around Saigon and Hanoi.

Although belatedly, the country is now determined to pace its economic growth with progressive environmental management, Pham Van Hai, a scientist who heads the Center for Environmental Science and Sustainable Development, told me in an interview last year.

The Lemna-Vietstar plant is evidence of that.

General Electric just announced plans to build a wind-turbine manufacturing plant, oil-exploration firms are prowling coastal waters off Vietnam, and the country is moving to overhaul its aging power-generation and distribution systems.

The Vietstar project is the first to turn organic garbage into fertilizer, said Do Thu Ngan, the CEO of Saigon-based Sacombank Leasing.

Vietstar will be paid $6 to $12 per ton for fertilizer under an agreement with the city of Saigon.

Paper, cardboard, wood, metal, glass and just about everything but organic garbage is recycled by scrap merchants and industry in Vietnam. That leaves small blue bags of organic waste left outside households that are picked up a couple of times a week by garbage trucks.