Among the major Vietnamese agricultural export products, rubber is the country’s third largest farm produce export item after rice and coffee. The Vietnamese rubber industry has encountered a lot of difficulties and challenges in boosting rubber exports,
Although prices of rubber exports have doubled from 2001 to 2005, the export value has seen only a slight rise over this time.
The situation was attributed to the fact that 80 per cent of the rubber exports are raw material, rather than finished products, according to the General Director of Vietnam General Rubber Corp. (Geruco) Tran Ngoc Thanh.
The local rubber processing industry remains underdeveloped, said Nguyen Thanh Chau, director of Dong Nai Rubber Co, adding that 60 per cent of the locally-processed rubber products are in less demand on the global market. To overcome such problem, changes in production structure should be in accordance with world demand. But the solution is not simple at all, according to Mr. Chau.
Rubber processors in Vietnam, the world’s fourth largest rubber exporter, are currently facing many difficulties in their businesses despite the high price of rubber in the world market, benefiting only domestic rubber exporters.
Danang Rubber Company (DRC), the country’s leading tire maker, has turned its back on several orders from foreign countries, which should have brought in an annual earning of US$10 million to the company, due to a hike in the world rubber price.
Poor and ineffective trade promotion programs have additionally been blamed for the low value of rubber exports, said an official from the Geruco’s Trade Promotion Office, Nguyen Bao. Trade promotion, meanwhile, is considered as a vital activity in determining the results of each company’s business strategy.
Many measures have been put on discussion with a view to helping the local rubber industry boost up exports in the coming years.
According to Tran Ngoc Thanh, Vietnam should reduce its exports of rubber products as raw materials in line with the demand of the global market. In particular, it is essential for the government to work out a proper policy to create favourable conditions encouraging local rubber firms to improve their finished rubber products.
However, the biggest problem is that Vietnam lacks an overall and long-lasting trade promotion strategy for its rubber industry.
P.V
Vietnamese
