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Technology, raw materials holding back handicraft sector
Vietnam's handicraft exports grossed US$308 million in the first half of 2006, up 13 percent from a year earlier, making its possible to obtain the years goal of $660 million, according to the Ministry of Trade (MoT).

However, handicrafts export potentials have yet to be fully tapped due to a dearth in available technology and lack of materials to support large-scale production.

Shortcomings

Experts said Vietnam lacks raw material zones serving the handicraft industry, although there was an available supply of naturally occurring materials like rattan, bamboo or clay.

He added these resources could be exhausted in the future due to insufficient fresh resources and cultivation projects.

The sector urged the government to set up a fund to support material cultivation.

According to some foreign importers, small-scale production, little contact with potential foreign customers and virtually no Internet access to e-commerce limits industry development.

Advantages

Unlike other sectors such as the apparel industry, which relies on imported materials, handicraft manufacturers could develop adequate supplies of local materials.

The sectors import materials make up only 3-5 percent of the value of a handicraft item.

According to economists statistics, if $1 million in added value was generated by handicraft makers, the garment sector would have to obtain revenue of $4.7 million to earn an equivalent value.

Additionally handicrafts exports are not subject to quantitative restrictions by importing countries.

MoT reported that Vietnamese handicraft shipments to the European market have grown incredibly recent years, accounting for one-tenth of EU imports behind China and Thailand.

The sector has also moved into new markets such as Africa and Southwest Asia with shipments there growing steadily into the easy-going markets.

Targets

The handicraft sector has set an ambitious plan to export $1.5 billion worth of handicraft products by 2010 with annual export growth of over 20 percent, according to MoT.

To obtain the target, MoT Vietnam Trade Promotion Agency (Vietrade) in co-ordination with the International Trade Center has implemented a project o support trade promotion and export development with a greater focus on handicraft exports.

The project has assisted the sector work out a plan to develop raw materials and study latest processing technology.

Additionally local handicraft enterprises would be encouraged to market their products overseas and seek new potential importers as well.


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