Bamboo and rattan product export: Good Conditions Created to Raise Productivity

Bamboo and rattan products are very important in the non-wood forestry category and have played an important role in the arts and crafts export structure in the recent years. During the 1999-2005 period, the forestry product export turnover increased by over 2.3 times, meanwhile the export turnover of bamboo and rattan products is much bigger by nearly four times, from US$48.21 million in 1999 to more than US$211 million in 2007. The bamboo and rattan product export turnover in the first six months of 2008 was US$110.9 million. Many studies indicate that the productivity of this sector may reach US$250 million in value including the domestic consumption (revealed in a survey by MPDF in 2005). However, many businesses in the sector are facing up with a great deal of difficulty.

 

 

These kinds of products which were mainly exported to the former Xo Viet Union and the Eastern European countries (traditional market or market area I) in the 80s, now have become popular in developed countries. At the time being, Vietnam’s bamboo and rattan products have appeared in more than 90 countries and regions and tend to reach the wider world. These products have entered many choosy markets such as the US, EU and Japan. As evaluated by the Information and Statistics Centre under the Ministry of Agriculture and Rural Development, Vietnam’s bamboo and rattan products always take high and stable market-share in Japan and Taiwan: from US$13 million in 2000 to US$27.6 million in 2005. The US is a quite new but potential market for the products with dramatic growth. The export turnover of these kind of products to the US which stayed low at less than US$2 million in 2000 rocketed up to more than US$22 million in 2005, up be more than ten times and become the second biggest turnover in value following Japan. Among Vietnam’s top ten markets for bamboo and rattan products, Germany, France and Spain keep high positions.

 

 

Bamboo and rattan businesses take an important part and serve as key factor for the development of the sector. The number of businesses involving in the sector has non-stop increased in the recent years. The number of 742 businesses nation-wide in 2000 climbed to 2032 in 2006. The most note-worthy feature is that the average net revenue of businesses in the sector has gone up considerably from VND6 billion in 2000 to VND7.8 billion in 2005. Their fixed asset has also increased by one and a half from VND1.9 billion in 2000 to VND3 billion in the last two years.

 

The businesses in the sector are small in labour force. There is hardly any business with 5000 employees or more. The rate of businesses with 300 employees is modest at 1-2 percent. Most of the businesses are using less than 200 employees and businesses of less than 50 employees account for more than 44 percent.

 

Many kinds of products ranging from rudimentary ones like household and producing tools to skillful arts can be manufactured by the businesses. However, most of their products are traditional and manual-made. There are only some steps where machines are used such as bamboo and rattan splitting, electrostatic painting or sulphur drying to avoid mould…

 

The products are mainly manufactured in trade village model. After entering into a sales contract, businesses shall organise the production right inside their facilities to afford part of the order and have the big remain done by households or co-operatives in ordered design. Households, manufacturing facilities and employees who received the sub-order shall be given an advance of 60-70 percent of the contract value. However, capital is really a problem for bamboo and rattan businesses during the production phase. When signing a contract, businesses are paid a small advance which is much less than their payable advance to manufacturers and most of the loan is in short-term, that’s why they face the difficulty in current capital. Although this seem to be suitable with the current situation of the sector (processing contract under order), it is difficult to provide a sustainable product or market strategy in long-term.

 

Bamboo and rattan businesses also face a very big problem in material shortage. Nearly 90 percent of material for bamboo and rattan production in Ha Tay depends on the supply from other provinces so the businesses have to suffer high material price which consists of freight and contingency fee. Additionally, the businesses are immature in market research, brand development and trade promotion. At the time being, most of Vietnamese businesses suffer price pressure by foreign parties as they make products under or in imitation of foreign design or under processing contracts with foreign partners. They are also limited in participating oversea and domestic fairs due to modest financial capacity.

 

A planning is required for the development of bamboo and rattan sector. “First of all, it is advisory to review and adjust land use planning (if any) or to set up a land planning project; set up a project on land use purpose changing to submit to competent authorities for approval. Basing on the projects, detail land use plan and site clearance project shall be built to support demanding units.

 

Priority and more effort should be paid to vocational training to overcome the labour competition between bamboo and rattan trade villages and other businesses and industrial zones. The training must be carried out regularly in businesses and not only in the form of sampling training as usual. Only skillful workers can afford orders of high value. Trade villages and businesses must evaluate exactly the quality of the labour force who are keen on this career in order to set up a long-term labour training plan.

 

Besides, the authorities at province and district levels should give good conditions and provide necessary support for businesses to build material zones (allocating stable and long-term forestry land, taking part in production forestation projects/programmes…). Especially, favorable condition must be given to businesses in getting bank loan and credit. “Sale contracts must be accepted as highly legal pledge for credit loan. The value of the businesses’ leased land should also be considered for pledge”