Abundant resources, limited designs for Vietnam ceramics industry

Vietnam ceramics industry enjoys ample amount of resources but needs to invest more in product design.

Vietnam has substantial resources that enable its ceramics industry to thrive. It has high-quality mineral reserves, diversified materials, and excellent handicraft skills with readily adaptable labor force.

Due to a wide range of available materials, products are more decorative and have diversity. Suppliers make vases of various shapes, terracotta seats, large and small statues, pots, and jars.

However, many handicraft producers have limitations in terms of designs. Experts say companies are encouraged to invest in designing products with better functionality and customizing to suit different preferences of global customers.

Local enterprises have been improving their competitiveness in terms of product quality, research and development, and product diversification. Their initiatives include personnel training, quality control, increasing production capacity and equipment and machinery improvement.

Exports

Vietnam shares 1 percent of the global market for ceramic tableware, kitchenware and other household wares, and toilet articles, according to the International Trade Center.

During 2012-2014, the export value of Vietnam ceramic products increased by 8 percent on average.

Japan is the biggest export market of Vietnam pottery and glassware, accounting to 16 percent, according to the General Statistics Office of Vietnam. Following are Taiwan with 12 percent, the United States 10 percent and Thailand 7 percent of Vietnam's overseas market.

Porcelain producers in the provinces have planned to expand their export markets to potential countries in Europe and Asia, while promoting exports to the traditional markets, local associations said.

In order to expand their markets, the Association of Vietnam Handicrafts Exporters (Vietcraft), organized in 2011 an international gifts and home décor trade fair in the Southeast Asia. There were over 1,000 booths of suppliers from Vietnam and other neighboring countries, attracting about 2,000 buyers and visitors in the show.

The Vietcraft, together with other groups, collaborated in early March 2015 with the Centre for the Promotion of Imports from developing countries (CBI) organized a field trip for Hanoi suppliers of traditional handicrafts to Finland, Sweden, Norway and Holland to promote their production capacity and export items.

Vietcraft also launched a project to develop sustainable design and brand for Vietnam handicraft sector. The project is one of six sub-projects sponsored by European Trade Policy and Investment Support Project (EU-MUTRAP). It aims to improve thecapacity of small and medium enterprises and develop sustainable design to meet the European standards.

The Ministry of Industry and Trade has devised the master plan to develop the Vietnam ceramics sector for the next 14 years. Export value of ceramic housewares should reach $43 million, and $615 million for handicraft ceramics from 2016 to 2020, according to plan. Within the next 10 years, overseas income from ceramic housewares will be almost double, $85 million, and exported handicraft ceramics should weigh 1.55 million tons.

Competitive advantages

Vietnam has long established traditional ceramic crafts villages like the ones in Bat Trang, Hanoi city, Binh Duong province, and Vinh Long province.

Firms have adapted to advanced technology in production, gradually replacing heavy manual labor. There are machines that automatically accomplish kneading and mixing soil technology, and there are gas-fired kilns and modern transportation, among others.

With these advances, more high-quality products are made, thereby contributing to the nation's economic efficiency and expansion of export markets to name a few benefits, while the industry still keeps its traditional image.

Some suppliers have contributed to the country's steady overseas revenue from ceramics by actively exploring new markets and bringing their brands and products successfully to the international market.

Further, given high expenses of brand building and developing in international markets, many Vietnamese enterprises still invest more to bring their products to foreign customers. As a result, many new customers in foreign countries are gradually recognizing the unique characteristics of ceramics made in Vietnam.

Challenges

Most ceramics makers from Vietnam are facing restrictions in terms of production technology and trade promotion.

A large number of suppliers are small and medium enterprises, which have limited capacity to directly export. Therefore, some of them their products to trading companies in big cities like Hanoi and Ho Chi Minh.

They also face increased production costs of imported materials and transportation pushed them to increase their price or dilute their profit margin. Some suppliers still depend on imported materials, especially from China, preventing them from selling at competitive prices.

They also suffer from high lending interest rate and required reciprocal capital from banks. These problems hinder their production capacity for big orders and competitiveness.

Although Vietnam ceramics have unique designs and high aesthetics, they are mainly handmade in single set due to lack of modern technology. Suppliers have difficulty handling big orders.

Some manufacturers experience shortage of skillful labor.

This article and its contents are provided by the Hinrich Foundation, a partner of Global Sources in promoting trade acrossAsia. The products and the suppliers featured in this article are export assistance program beneficiaries of the Hinrich Foundation.

See a comparison table of ceramics suppliers on GlobalSources.com