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 Updated: 9 / 3 / 2010

Please refer monthly update for fuel surcharge on September 2010: 14 %

 Updated: 8 / 2 / 2010

Please refer monthly update for fuel surcharge on August 2010: 15 %

 » Handicraft Industry in Vietnam
 Updated: 7 / 16 / 2010

Vietnamese have always produced substantial hand-made products.  It is both cultural and also a matter of necessity in what has been till recently a very poor but also very art and culture loving society.  Promoting a rapidly growing handicraft industry in Vietnam is a part of the Vietnamese government’s plan to foster economic development across all regions of the country, reducing unemployment, especially in the rural areas, and raising exports. With more than 1500 ancient handicraft villages, Vietnam is gradually revealing both its potential and the wide range of its products to the international handicraft markets.

While most handicraft villages cluster around the Red River and Mekong Deltas in the North and the South, Central Vietnam is also blessed with abundant natural materials and thus, has been targeted as a major supply center. The handicraft industry has created millions of jobs for local workers, elevating their living standards while helping to preserve ancient traditions. Handicraft villages also bring about benefits as tourism destinations, attracting an increasing numbers of tourists every year (Asia Science and Education for Economic Development Organization).

One of the Oriental countries with cultural origins that trace back thousands of years, Vietnam has been amazing the international markets with both the variety of its handicraft items and its handicraftsmen’s and women’s skills. Valued craft items from Vietnam include wooden furniture, porcelains, lacquers, embroidery, candles, jewelry, imitation flowers and glass products. Although the export turnovers from the handicraft industry does not compare to other industries such as oil & gas or textile, handicrafts have an advantage of low overall production costs (production costs account for about 35% of the export value). In 2005, handicraft export turnovers were valued at $565 million. According to the Ministry of Trade, the target for this year is $800 million, and turnover is expected to reach $1.5 billion by 2010.

Currently, the three major export markets are the US, Japan and the EU. Since the US government imposes no tariffs on handicraft imports, the handicraft industry appears a potential factor to enhance the trade relationship between Vietnam and the US. Vietnamese authorities have acted to take advantage of this fact: the US has remained the number one importer of Vietnamese home decorations and handicrafts for the last three years. Especially in the furniture sector, according to Vietnam Economy News Online (August 9, 2004), more and more US enterprises are seeking partnerships with Vietnamese furniture enterprises to meet the increasing demand of furniture products in the US. Japan and the EU have also made their moves to promote their own imports of Vietnamese handicrafts by increasing marketing and directly discussing existing issues with Vi markets, the handicraft industry in Vietnam still is confronting fierce competition from other countries, including China and Thailand. In addition, foreign customers have also commented on Vietnamese handicraft producers’ limited production capacity and lack of information on the market’s current demand, which leads to insufficient and outdated designs, styles, and production. However, these above issues are solvable as Vietnam is also working on bringing technology to even the most rural areas.

Foreign business people interested in this sector should keep in mind that in Vietnam, large producers tend to be either cooperatives or to have a less typical business organization.  The remainder of producers is often smaller family run companies, which often produce excellent quality products but sometimes need more lead-time to produce in large quantities.  In dealing with either form of company the importance of having a knowledgeable person on the ground to assist you can be critical and Runckel & Associates has considerable expertise in this area.


 » Handicrafts eye post-crisis opportunities
 Updated: 7 / 16 / 2010

The Handicraft and Wood Industry Association of HCM City will help its members capitalise on post-crisis opportunities to boost exports and expand their domestic market, its chairman has said.

Handicrafts eye post-crisis opportunities

Speaking at a meeting held last week to review the association’s performance last year, Nguyen Chien Thang said the association had played an important role in the last several years by acting as a bridge between the Government and businesses, communicating the Government’s policies to enterprises and conveying the latter’s demands.

It had held professional training courses, trade promotions and seminars to help members strengthen their competitiveness and expand their markets, the meeting heard.

“Its up-to-date website has gradually become a key source of information for businesses,” Nguyen Thanh Phong, Hawa general secretary, said.

This year it would organise more seminars, fairs, training courses and trade promotion programmes to support its members, Thang said

It would also continue to gather opinion to provide the Government inputs for effective policy-making, he added.

Tran Quoc Manh, Hawa deputy chairman, said four to five exhibitions on wooden products would be held this year, offering members the opportunity to introduce their handicrafts and wooden products to the market and seek partners.

The association would also co-operate with relevant agencies to organise trade promotions and foreign market-research trips, he said

“If our trade promotion programmes are methodical and long-term, our products will surely become more popular around the world.”

There had been a recovery in recent months with the situation expected to become brighter, he added.

Nguyen Quoc Khanh, another deputy chairman of the association and chairman of AA Corporation, advised companies that hope to expand domestic sales to invest more in developing professional design staff and researching into consumers’ demands and tastes.

Wooden exports were worth US$2.55 billion last year, 8.9 per cent down from the previous year, according to the Ministry of Industry and Trade.

Timber imports were worth $888 million, down 19.1 percent.

Hawa, which was established in 1991, has 325 members.

VietNamNet/Viet Nam News

 » Handicraft producers seek road to Japan market
 Updated: 7 / 16 / 2010

Handicraft producers and exporters are showcasing products at an exhibition which opened in Hanoi on April 14 with the aim of boosting exports to Japan.

As many as 26 handicraft importers from Japan visited and made transactions at the exhibition which was held under an initiative by Vietnam-Japan Special Friendship Ambassador Ryotaro Sugi.

The organisers had previously invited two design and marketing experts from Japan to help 46 domestic handicraft companies get a handle on the demands of Japanese consumers and ways to penetrate this market.

As part of the Vietnam Expo 2010, the show was co-organised by the Japan External Trade Organiation (JETRO), the Vietnam Trade Promotion Agency (Vietrade) and the Vietnam Chamber of Commerce and Industry (VCCI).

 » Vietnam Becomes 2nd Most Attractive Destination for Japan SMEs
 Updated: 7 / 16 / 2010

Vietnam has become the second most attractive destination in Asia for Japanese small and medium enterprises (SMEs) next three years behind China, the Voice of Vietnam Radio reported, citing a survey by Japanese financial institution.

The survey covering 700 Japanese SMEs by Shoko Chukin Bank showed that 30% of total enterprises will select China to invest in the years to come and 21% of the figure also will boost investments in Vietnam soon.

Meanwhile, just 11% of the interviewees voted India and nine percent for Thailand, the survey indicated.

Shoko Chukin Bank also said that Japanese companies now choose Vietnam for its potentials for market development, instead of abundant labor force and low production costs in the past.

Japan External Trade Organization (JETRO) said Vietnam is among the most appealing places for the Japanese investors at least for the next two years, despite high office rentals.

As of April 20, the Japanese companies invested $19.34 billion into 1,211 projects in Vietnam, ranking the third among foreign investors in the Southeast Asian country.

 » Hanoi to host CG Meeting 2010
 Updated: 7 / 16 / 2010

The Consultative Group (CG) Meeting 2010 will take place in Hanoi, according to the Government Office.

The office said the Prime Minister has assigned the Ministry of Planning and Investment to work closely with the World Bank and relevant agencies in organising the event.

Previously, the mid-term CG meeting was held in Rach Gia in the Mekong delta province of Kien Giang on June 9-10.

The CG meeting has to date become an annual forum for the Vietnamese Government and international donors to discuss Vietnam’s socio-economic development, assess the implementation of official development assistance (ODA) commitments, and work out coordinating measures to raise the effectiveness of the use of ODA.

 » Int’l Home Décor and Gifts Fair opens in Ho Chi Minh City
 Updated: 7 / 16 / 2010

More than 200 Vietnamese and foreign businesses are showcasing their products at the Vietnam International Home Décor and Gifts Fair which opened in Ho Chi Minh City on April 22.

There are more than 700 displaying eight categories of goods including home décor and handicrafts, tabletop and house wares, furniture and furnishings, home textiles and embroidery, gifts & ethnic items, garden accessories, personal accessories, and supporting services.

There will also be professional seminars on developing handicraft and wood products for exports.

The event, jointly held by the Vietnam Trade Promotion Agency and the Vietnam Handicraft Exporters Association, is part of Vietnam’s national trade promotion campaign.

The four-day fair will close on April 26.

 » FIEs grumble about labor shortage, power cuts
 Updated: 7 / 16 / 2010

apanese investors say they have been impressed by the changes in Vietnam’s investment policies, but they are also worried about labor shortages and electricity cuts across the country.

“After last year’s fact-finding trip to Vietnam, many businesses have considered investments in Vietnam,” revealed Investment and Tourism Division of Aichi province Director Masanori Ito.

Production recovery in foreign-invested enterprises can be seen in the export revenue increase of 39.5 percent in the first six months of 2010.

Labor shortage

Vietnam has clearly become a destination for many Japanese investors. In the first half of 2010, Japanese investors registered investment capital totaling 1.22 billion in Vietnam. Japan now ranks fourth among foreign investors in terms of disbursement, according to Foreign Investment Agency Head Do Nhat Hoang.

While “believing in the policies of Vietnam,” Ito admitted that Japanese investors still have many worries.

“The labor shortage is the most burning issue, occurring not only in the southern provinces, but also the north,” commented Koichi Takano from the Japan External Trade Organisation (JETRO).

Labor shortages do still pop up across Vietnam, even with 48 million people of working age and 1-1.2 million people joining the labor force every year.

“It is necessary to establish more vocational centres and set up policies to encourage workers to move from villages to big cities,” Mr Takano suggested.

In response, Le Xuan Thanh, a senior official from the Ministry of Labour, War Invalids and Social Affairs, argued that Vietnam has been very ‘open’ in allowing workers to move from rural to urban areas for work. The State has also spent 10 billion dong on a long-term program to train laborers.

The number of labor disputes has also risen.

“It is a real problem that the number of strikes has not decreased. As far as I know, in the last several months, 5-6 strikes occurred, especially in June,” estimated Koichi Takano.

“Some large strikes in China recently caused big losses for Japanese companies and the country’s Government worries that enterprises will move to other countries to make investment,” the JETRO’s representative said, implying that any such moves would be to Vietnam.

Electricity cut – the burning issue

Japanese enterprises have most especially complained about power cuts.

“They (EVN) said they would cut power, but they did not. Then, several days later, they cut power without giving advance notice,” Mr Takano criticized, citing the many complaints sent to JETRO.

“As a production company, we need to be informed in advance about power outages so that we can form reasonable production plans. The Ministry of Planning and Investment needs to have a say in this,” he protested.

Kazuo Sato from Inuoe Vietnam Company calculated that the total time of power outages thus far is about 200 hours.

Deputy Director of the Foreign Investment Agency Nguyen Noi pointed out that the volume of commercial electricity has increased by two-fold in comparison with the GDP growth rate, but Vietnam still lacks enough electricity for production firms.

“The Government is trying to settle the problem. It is now calling for investment under the mode of BOT (built-operation-transfer) for power sector projects,” he revealed. “Some power plants with very big investment are being considered, and once they become operational, they will help reduce the difficulties caused by the power shortage.”


 » Diplomat says Myanmar offers export, investment opportunities
 Updated: 7 / 16 / 2010

Myanmar is a promising market for investment and export, the Vietnamese ambassador to that country told a meeting in HCM City yesterday.

Chu Cong Phung said with its population of 56 million, Myanmar is a large market for consumer products since its local production only meets 13 per cent of demand.

Two trade fairs held to promote Vietnamese products in Yangon last September and April were very successful, with everything selling out in two days, he said.

Many Myanmarese importers want to import Vietnamese products because of their quality, range, and reasonable prices, he said.

Myanmar has abundant natural resources, including land, water, forests, natural gas and coal, petroleum, minerals and marine resources — its rubies are among the best in the world — but most remain untapped, he said.

The country also has good human resources that are relatively skilled and adapt quickly to new working environments, while English is commonly spoken, he said.

He urged Vietnamese firms to study investment opportunities by making business trips to Myanmar, which needs investments in many fields, including services and tourism, he added.

Tu Minh Thien, director of the HCM City Investment and Trade Promotion Center, agreed saying it is a good time for Vietnamese companies to promote trade and investment to Myanmar.

He said among sectors they can invest in are mining, forestry exploitation, agriculture, aquaculture and processing, telecommunication, tourism and health-care services.

Myanmar also has a large demand for electrical and electronic products, pharmaceutical, and medical equipment, steel, plastic products, building materials, and others, he said.


Phung admitted, however, there will be hassles like tortuous import licensing procedures and difficulties in getting payments when doing business in Myanmar.

US and EU sanctions against that country pose difficulties in making or getting payments, he explained.

But to get around the problem, Vietnamese firms should strictly follow guidelines from the Vietnamese embassy in Myanmar and the Ministry of Industry and Trade and do financial transactions only through designated banks, he said.

The Bank for Investment and Development of Viet Nam has opened a representative office in Myanmar, he said, hoping it will be permitted to run banking services after elections end in the country later this year. That will smoothe the way for financial transactions and boost investment and trade between the two countries, he said.

Trade between the two countries was worth just US$74 million last year, low compared with other countries, according to Bui Ngoc Trung of the Ministry of Industry and Trade.

It topped $58 million in the first half of this year, with Viet Nam’s exports being worth $16 million, he said.

Myanmar’s main exports to Viet Nam are wood and forestry products, natural rubber, and seafood.

It imports steel products, cement, processed foods, plastics, pharmaceuticals, and electrical goods and appliances.

According to the Association of Vietnamese Investors in Myanmar, Vietnamese enterprises have pledged investments of nearly $1 billion in Myanmar this year. — VNS

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