Viet Nam Rubber Industry – Vietnam Value Program
Viet Nam has long been known as an agriculture-based country with a wide range of agriculture products. With this type of comparative advantages in the global trade market, the country has gained a well-deserved reputation as one of the largest and most credible producers and exports of multiple agricultural merchandise, one of which must be Vietnamese rubber – a world-renowned specialty of the S-shaped country.
Rubber is one of the most valuable industrial crops in Viet Nam besides pepper, coffee and cashew. Thus, the rubber industry has received huge attention from the government and the private sectors in Viet Nam. There are two main types of rubber in the market, natural and synthetic. In Viet Nam, the rubber industry mainly focuses on the production of natural rubber.
During 2020, Vietnam’s rubber industry has been focusing on both producing natural latex – Vietnam’s strong point already, and improving the technology for rubber latex processing, as well as developing catch-crop and high-tech rubber agriculture. Vietnam Rubber Group (VRG) also fosters partnerships among rubber companies in Viet Nam and between Vietnamese firms and foreign ones to find markets for the output. Until 2020, VRG has approved 2 high-tech agricultural zones and 13 high-tech projects with a total area of over 4,300 ha.
Viet Nam exports rubber to more than 60 markets around the world. In 2020, rubber exports were estimated at 1.75 million tons, worth US$2.38 billion, up 2.8% in volume and 3.5% in value compared to 2019, the average export price was at US$1,362/ton, up 0.7% compared to 2019.
Depending on each kind of rubber product, there were different strategic trade partners for Viet Nam. For instance, for natural rubber, the major export destinations in 2020 were China, India, South Korea, Taipei and the U.S – traditional markets for Vietnam’s rubber. Europe also emerged as a new market for Vietnam’s natural rubber such as Germany, Spain, Italy and Netherlands.
Vietnam’s main export products in 2020 were raw materials of latex, constituting about 78.4% while the remaining 21.6% was processed products namely tyres, gloves, accessories and soles of shoes. According to the Vietnam Rubber Association, in 2020, the export value of natural rubber was over US$2.38 billion, which was about 30.3% of the total export value of the industry whereas that of processed rubber products reached the point of roughly US$3.11 billion – about 39.6%. Viet Nam also exported quite a huge amount of rubber wood, whose export value hit US$2.36 billion last year, accounting for 30.1%. In 2021, global rubber output is expected to rise by 3-6 percent on an annual average, keeping pace with the increasing area under cultivation. Currently, Danang Rubber, Sao Vang Rubber, Southern Rubber Industry JSC (Casumina), and Inoue Rubber Vietnam are four major players in the local market, in all of which state-owned Vietnam National Chemical Group (Vinachem) has the ownership.
Thanks to the support of the The National Branding Program (called Vietnam Value Program), many Vietnamese corporations and businesses in general, and rubber companies in particular, have become aware of the importance of branding as the key to increase product value as well as corporate value. Enterprises have gradually created, developed and promoted their brands professionally, thereby improving their competitiveness and affirming their position in the domestic and foreign markets.
The National Branding Program (called Vietnam Value Program) was approved by the Prime Minister at the Decision 253/2003/QD-TTg dated 25th November 2003. The Ministry of Industry and Trade has been assigned to coordinate with other ministries and agencies to implement the Program. The symbol “Vietnam Value” is attached to trademarks of products and services that are qualified according to strict criteria of the Program. The selection of products and services is carried out every 2 years. The State does not only aim to build national brands itself but also sponsor the program’s partners to further develop their well-recognized brands of products and services, thereby setting a strong foothold at home and advancing their presence in the global markets. There are five rubber companies included in the Vietnam Values’s rubber companies: Da Nang Rubber JSC., Dau Tieng Rubber Corporation, Dong Nai Rubber Corporation, Tan Bien Rubber JSC. and the Southern Rubber Industry JSC. (Casumina).