Vietnam has been ranked the fifth largest rubber exporter in the world however; limitation in producing rubber products resulted in the reduction in adding value to these products.
Tran Thi Thuy Hoa, general secretary of Vietnam Rubber Association (VRA) stated that in 2005, the government issued Decision No 243?QD-TTg regulating about developing rubber trees, with the target of setting up the complexes of producing and processing rubber products.
However, until now, the consumption level of rubber product in Vietnam is still at low level, with limitation of producing car tyres, tyres and inner tubes of bicycles.
Tran Van Rach, vice director of Tay Ninh Rubber Joint Stock Co admitted his company has average production output of 13,000-14,000 tonnes per year in a long time, however, most of the products are preliminarily processed.
Vietnam’s rubber industry is in need of cooperation with foreign investors, especially in the field of processing, in order to raise the added value in the industry.
Hoa added that many Vietnamese rubber companies have called for investment capital. The foreign investors may invest in Vietnam’s rubber industry via purchasing shares of local rubber firms such as Tay Ninh Rubber JSC (coded TRC), Dong Phu Rubber JSC (DRC), and Hoa Binh Rubber JSC (HRC).
In the recent conference held in HCM City with theme of “How to improve the added value in rubber products”, many foreign investors still expressed their doubts about making direct investment in growing rubber trees in Vietnam.
In addition, some investors were worried about the bad effects from the fact that the US was imposing import tariff on China-originated rubber products on Vietnam’s rubber export industry, as most of Vietnamese rubber products have been exported to China so far.
As a result, although there’s a reduction in China’s export volume in general, it’s predicted that the country’s car-making will continue increasing, balancing the rubber demands in China’s domestic markets. Therefore, Vietnam’s rubber export to China has only dropped slightly.
Vietnam’s rubber industry has certain advantages such as abundant raw materials, and low-priced human resources. However, Vietnamese rubber firms have weak point in processing.
Therefore, if the domestic rubber producers can cooperate with the foreign investors to apply modern technologies in the processing period of rubber materials, producing new types of rubber products that may not only make contribution in the industry’s development process, but also reduce the country’s import volume.
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