Creating Development Momentums for Handicrafts

This information was released at a press conference on international standards for Vietnamese handicraft sector held in Hanoi on January 6. The event was part of the programme “Supporting effective operating business associations for dynamic and inclusive development in Vietnam” funded by the Government of Australia and administered by the Asia Foundation.

 

Vietnam now has over 1,500 handicraft producers and exporters which bring in nearly US$1.7 billion of exports annually.

 

Mr Le Ba Ngoc, Vice Chairman of the Vietnam Handicraft Exporters Association (Vietcraft), said international standard compliance played an important role for enterprises in general and handicraft enterprises in particular in the context of integration. Conformance requirements are one of very important conditions imposed by importers. Specifically, 6- 10 years ago, only 20 per cent of customers placed compliance requirements but the rate has climbed to 67.4 per cent now.

 

According to a survey participated in by 100 international importers in the framework of the project “Supporting effective operating business associations for dynamic and inclusive development in Vietnam,” most of them confirmed they will work with suppliers complying with standard regulations on quality, society, environment and security in the next five years.

 

Up to 100 per cent of international handicraft importers affirmed that at least 30 per cent of their suppliers have to meet compliance standards in the next five years and 75 per cent of importers require at least 50 per cent of suppliers to meet compliance requirements.

 

This is a strategic change which Vietnamese handicraft exporters need to satisfy to maintain and enhance their competitive positions in the international market.

 

Nevertheless, he said, there are a lot of issues needed to address to meet standard compliance.

 

According to companies, the biggest difficulty is finance. To meet international compliance requirements, a company must spend hundreds of millions of Vietnamese dong a year. This is a big amount for handicraft companies, most of which are small and medium-sized. Besides, independent production makes it hard for them to apply uniform compliance.

 

In addition, companies’ knowledge of compliance and its benefits as well as the level of their employees are worrying issues. Many exporters said that they face difficulty in finding information on compliance as such kind of information is not really popular and not widely circulated in Vietnam, even if it is difficult to understand and comply.

 

Giving an optimistic outlook to the future, Mr Ngoc said that compliance will be certainly placed a greater importance in the future against the backdrop of deeper integration trend. Many companies expect their higher sales after applying international standard compliance and generate more jobs for their employees, particularly their changes to corporate governance and market targeting.

 

Regarding the business support project, he affirmed that, after more than one year of implementation, Vietcraft conducted surveys to gauge many conformance demands of Vietnamese companies as well as conformance requirements of international importers in order to work out practical guidelines for domestic companies, organise training activities, advise on compliance regulations to raise their awareness and support them to adopt and apply compliance.

 

Currently, the project also supports Vietcraft to build sector standards for three industry groups of bamboo and rattan, ceramics and lacquer.

 

To date, 350 enterprises have known about the standard compliance while 25 enterprises were instructed to apply these standards to meet requirements of importers.

The project is continued to ensure development of new designs conforming to the industry standards and connecting Vietnamese firms with international clients before proposing appropriate policies suitable with sector standards.