Currently, the sector contributed about US$300 million to the country's total export turnover per year, as Viet Nam's bamboo and rattan products are sold in 120 countries and territories.— Photo maytrehienduong

HA NOI (Biz Hub) — Although it has the potential for development, Viet Nam's bamboo and rattan sector is still facing challenges, particularly a shortage of raw materials and capital.

Luu Duy Dan, chairman of the Viet Nam Trade Villages Association, attributed the lackadaisical performance to poor strategic planning in the domestic handicraft sector while talking with Thoi bao Kinh doanh (The Business Times) newspaper.

The indigenous development of the craft businesses, backward technology and poorly-designed products made it difficult for Vietnamese bamboo and rattan items to compete with products from other countries in international markets, he explained.

Dan said poorly designed policies and schemes for raw material development for the sector also led to problems in the production of bamboo and rattan products, including training, labour problems and environmental pollution.

Currently, materials for bamboo and rattan products are being gradually exhausted. Many firms may have to import materials to fuel their production. So far, there is no feasible programme to resolve the situation.

Importing materials from foreign countries, including Indonesia, Laos and Cambodia at high prices, has pushed prices of finished products on Viet Nam's market higher than the original production cost.

In addition, the growing area of bamboo and neohouseaua are often located far from the producers, thus increasing the cost of transportation.

Nguyen Van Trung, director of Hoa Son Handicraft Ltd Co, noted that most of the Vietnamese bamboo and rattan items for export were interior decoration products that are not as competitive as products from other regional countries.

In addition, investments in the domestic craft businesses remain subdued. The businesses are poor in applying modern technology, leading to products with low added value. About 95 per cent of locally made products are produced in craft villages. Most of them are small-sized businesses with limits on competitiveness and innovative capacity.

A representative of a craft village from former nothern Ha Tay Province remarked that despite high demand in the market, especially for high-quality products, craft businesses are unable to further invest in expanding their production. They also face difficulties in accessing loans from banks.

According to the Import-Export Department of the Ministry of Industry and Trade (MoIT), most of the handicraft businesses are small-sized and do not have sufficient capital to upgrade their technology and expand their production scale.

As a result, their product designs are poor and not competitive in both the domestic and the international markets.

Industry insiders add that the shortage of capital and raw materials is still a large challenge for the domestic bamboo and rattan processing industry.

Nguyen Ton Quyen, general secretary of the Viet Nam Timber and Forest Products Association, said the association has formulated policies to develop the sector, however, to resolve the existing problems there still is a need for raw material planning, tax preferences and bank loans.

The Ministry of Agriculture and Rural Development noted that the country is now home to more than 2,000 craft villages. Out of these, the highest number is that of bamboo and rattan craft villages.

Currently, the sector contributed about US$300 million to the country's total export turnover per year, as Viet Nam's bamboo and rattan products are sold in 120 countries and territories. — VNS