Monday, March 10, 2008

Viet Nam aims at German market

Viet Nam’s commercial attache to Germany, Nguyen Minh Gon, spoke to Thoi Bao Kinh Te Viet Nam (Vietnam Economic Times) on export matters concerning Vietnamese enterprises and the German market

Could you give me a rundown on Vietnamese enterprises’ exports to the German market last year?

According to the statistics of the German Customs Office, Viet Nam’s export turnover to German was US$2.5 billion, but the Viet Nam Customs Office’s statistic is just $1.8 billion. The difference is the result of certain goods being imported into Germany through a third country bearing the "Made in Viet Nam" mark and still being considered Vietnamese goods.

Presently, Viet Nam exports 230 items and groups of items to Germany. Apart from items with high turnover like textiles, footwear and coffee, items such as mam tom (shrimp paste), manhole covers and handicrafts also have been exported in large quantities to the German market.

What do you think about the possibility of increasing export turnover to the German market this year and in years to come?

Annual goods purchasing power in Germany is $550 billion. At the moment, goods from Viet Nam account for only 0.2 per cent of the German market demand for imported goods. That means that the German market holds potential for Vietnamese exporters.

In addition, the market is in need of almost every item. The goods needed are not only to serve the German market but also those of other European countries, as Germany is a prominent partner in the European Union and in Europe in general.

I know many Vietnamese enterprises claim that German partners are hard to work with. In my own experience, however, they are difficult to work with only at first, due to their firm principles. Once both sides get used to each other’s work style, relations become easier.

What would you advise Vietnamese enterprises about dealing with German partners?

I recognise that most Vietnamese enterprises export various items to the German market, without focusing on particular specialty items. That’s why most Vietnamese enterprises lack special trademarked goods. I strongly recommend Vietnamese enterprises specialise in certain kinds of goods and enhance their staffs’ professional skills and foreign language capabilities.

Viet Nam is the 150th member of the World Trade Organisation (WTO), and it should offer goods with quality that rivals other WTO members’ exports to the German market. Yet we should offer even more reasonable prices in order to compete.

Most exports from Viet Nam to the German market are textiles and footwear. However, most of them enter the market through subcontracts, whereby Vietnamese enterprises make the goods for foreign companies, without any trademark.

Coffee is the second-largest exported item from Viet Nam to the German market, but most of the coffee is unprocessed.

In addition to specialising in certain products, Vietnamese enterprises should process the products further to increase their quality and create trademarks for the products and the enterprises as well.

How do you think we can help enhance the role of Vietnamese enterprises through promotional activities by commercial associations in the German market?

I think we should promote trade through commercial associations with a clear focus on certain products. For example, Vietnamese tea is popular in Germany. But Vietnamese enterprises now directly export only 2,000 tonnes a year. German enterprises import the rest from Viet Nam via British traders.

When I asked German traders why they didn’t import all the goods directly from Vietnamese enterprises, they answered that they would like to do so to reduce their costs. By importing Vietnamese tea through British traders, however, they could avoid risks. For example, if they have signed contracts with Vietnamese partners to import tea at certain prices, the international market price rises, and Vietnamese enterprises do not want to transport the goods anymore. This will harm both sides’ reputations. — VNS