Vietnam Export Seeks New Markets

Vietnamese main exports (garments, aqua-products and wood-based items) have decreased or met with difficulties in  two major markets: US and EU.  The most important outlet is the traditional Japanese market.

Opportunity remains

Vietnam is the third biggest exporter of wooden furniture and handicraft products to Japan, after China and Thailand. As Japanese demand in 2005 is forecast at 650-700 tonnes of wood-based items, Vietnamese businesses can continue to count on this market.

In fact, Japan is a traditional market for Vietnamese exports. After the breakthrough with the American market, many Vietnamese businesses rushed to this large market of big contracts. When facing the danger of anti-dumping lawsuit on wooden products in the American market, they returned to the Japanese market and found out that the Chinese giant was already there with a market share of 43 per cent. It explains why Vietnam is a traditional partner and the third biggest exporter of wooden products to Japan but makes up only 9 per cent in market share.

Mr Tran Quoc Manh, Chairman of Wooden Products Association, Ho Chi Minh City, observed that the Japanese market demands high quality products especially in soft wood. Japanese clients are hard to please but after being established the relationship is lasting well. With purchasing power of US$1,000/household/year for wooden products, Japan is a lucrative market for exporting countries. With the goal of US$1.6 billion in export value this year, the Japanese market is expected at 21 per cent. According to experts, Vietnamese exporters must meet the characteristics of the market "in small size and subdued colours".

Seafood, garments back to old markets

The goal of seafood export in 2005 is to reach the US$2.6 billion mark, but in the first six months, it attained only US$1.062 billion (less than 41 per cent). Due to the unresolved lawsuit, shrimp export the US decreased by 16 per cent compared to the same period last year. The task to achieve the plan in the remaining six months is heavy and the target is now the Japanese market. According to Mr Truong Dinh Hoe, Deputy Secretary General, Vietnam Seafood Association (VASEP), the Japanese market is leading with the export value of US$350 million in the first six months. The competitors of Vietnam are Indonesia and India. However, while India is stronger in prices and shrimp materials, Indonesia in processed products, Vietnam is superior in quality, the first importance to Japanese importers. And Japan remains a strategic and long-term market for Vietnamese sea products. It is important to ensure quality and food safety criteria to maintain the market. The seafood export value to Japan this year is expected at US$800 million, Mr Hoe added.

Similarly, the garment export to the US in the first six months was US$675 million and decreased by 20 per cent against the same period last year, the EU was respectively US$255 million down 5.37 per cent . While in Japan, the export value increased by 13 per cent. Vietnam Garment Association advised that Japanese clients are shifting orders from China to Vietnam, Vietnamese businesses should make use of the opportunity as with only 10 per cent of those orders, Vietnam can make US$1 million in export. Nha Be Garment Company disclosed that its Japanese partner has moved a jacket factory from the Philippines to Nha Be (Vietnam) and the production line is operating at full capacity for the Japanese market.

• P.V