14:45 | 17/01/2014 Trade
(VEN) - Investing in production technology and using different kinds of materials to make the same products is considered to be a band-aid but reasonable solution helping businesses save materials while creating differences and increasing the added value of bamboo and rattan products for export.
Data from the Ministry of Industry and Trade show that in 2013, Vietnam exported 227 million worth of bamboo, rattan and sedge products, a rise of 7.2 percent compared with 2012 and exceeding the yearly plan. However, the export growth of 2013 was lower than that of 2012, 10.5 percent. Businesses attributed this situation to a decline in the import demand of foreign markets, especially the EU, and difficulties in terms of materials.
Nguyen Van Trung, Director of the Hoa Son Handicrafts Company Limited in Phu Vinh, Chuong My, Hanoi, said that the company did not face a lack of materials but the costs had rapidly increased, by about 20 percent compared with previous years. Just about 10 bamboo varieties can be used as materials to make products for export, but they are available in different areas, making it difficult for businesses to purchase.
Nguyen Van May, Director of the Phu Tuan Import-Export Company Limited in Phu Tuc, Phu Xuyen, Hanoi, said that production and trading activities of the company in 2013 did not bring in desired results. Sales decreased by about 10 percent compared with 2012. Input expenses, especially material costs, increased, raising the cost of production and reducing the company’s revenue.
Material-related difficulties have become a problem facing bamboo and rattan businesses because domestic bamboo and rattan resources have been spontaneously used for many years and are now available only in remote and mountainous areas. This makes it difficult to collect the materials and increase the transportation cost, thus raising the production cost. Meanwhile, businesses cannot sell their products at higher prices and have to compete with bamboo and rattan exporters such as China, Indonesia and Thailand. Therefore, domestic bamboo and rattan businesses have to accept lower profits or selling their products at breakeven prices or even losses to maintain their market shares.
In fact, the government has paid attention to seeking a solution for this problem. In 2011, the Prime Minister promulgated Decision 11/2011/QD-TTg regarding incentives for bamboo and rattan businesses. Under the decision, organizations and inpiduals involved in planting, collecting, processing bamboo and rattan and purchasing products made of these materials are offered many preferences in terms of tax, investment and land rent.
However, according to Vietnam Handicraft Exporters Association President Le Ba Ngoc, the implementation of this decision has not created changes desired by businesses.
Some businesses have worked out plans to plant bamboo and rattan in large areas, but they still lack capital and received little support from relevant state authorities. Many rattan planting models have been developed but just in the form of experimental projects. Some small-sized rattan production areas have been formed but fail to meet the practical demand.
To help bamboo and rattan businesses overcome difficulties, in the opinion of Le Ba Ngoc, relevant ministries and sectors must promote the implementation of Decision 11/2011/QD-TTg to ensure sufficient and stable material supplies for making products for export.
On their side, Le Ba Ngoc said that businesses must invest in technological innovation and get updated on consumption trends in foreign markets. They must persify products, save materials and increase the value of Vietnamese bamboo and rattan products. They can use different kinds of materials to make the same products to make them different from others. In addition, businesses should cooperate in planting bamboo and rattan so that they can be self-sufficient to some extent in terms of materials./.
By Bui Viet