Vietnamese Goods Landing Fast in US Market

Vietnamese Goods Landing Fast in US Market

Viet Nam earned US$10.3 billion from exports to the US in 2007, a rise of 39 percent over 2006. This year, exporters expect to raise the number to US$13.1 billion, up 28 percent.

Viet Nam exports to the US, mainly apparel, footwear, wooden furniture and seafood, have seen minimum export growth of 15 percent per annum over recent years.

Wooden Furniture Dominates First

Wooden furniture exporters quickly penetrated the US market and earned US$1.1-1.2 billion last year, nearly 50 percent of all wood-product exports.

The sector exceeded seafood to rank third in terms of export turnover after apparel and footwear.

Since US importers began switching to Viet Nam from China in late 2006, Vietnamese producers have built and reequipped more factories to serve only this market.

Saigon-Vientianne Import-Export Corporation (Savimex) invested over US$1 million to build four more factories in the third quarter of 2007 to supply furniture only to the US. The new factories have created jobs for 300 more workers.

Savimex Deputy General Director Nguyen Hoang Vu said early this year his company signed contracts with US importers worth US$10 million to export mainly bedroom furniture.

AA Corporation, a furniture and interior design contractor, just renewed a contract for US$6 million, 70 percent higher than its previous contract, to provide a US hotel chain with wooden furniture.

AA Director Chad Oven said, once having approached and penetrated the US market, exporters will gain new opportunities to develop their businesses if they deliver commodities on time and with good quality as pledged in their contracts.

Clothing Cleaning-Up, Too

The US is Viet Nam's biggest apparel importer. Clothing exports to the US accounted for 60 percent of US$7.8 billion in total exports in 2007.

As much as 60-70 percent of Vietnamese clothes exported in the first quarter of 2008 will go to the US.

Phong Phu Co. Export Director Pham Thi Minh Huong said her company has signed contracts worth US$8 million to export fabrics and towels to the US during the first half of 2008.

She said, "Compared to India and Pakistan, fierce competitors of Viet Nam's garment industry, Viet Nam's political stability is a major advantage appreciated by US partners. And it is undeniable the US is an attractive export market."

An unnamed garment expert said the sector's exports might exceed the US$5.4 billion target set by the Ministry of Industry and Trade, regardless of the US government's monitoring mechanism on garment and textile imports from Viet Nam which is to last to the end of this year.

Prestige and quality

Ho Chi Minh City Handicraft and Wood Industry Association Vice President Nguyen Quoc Khanh says American buyers highly appreciate Vietnamese workers' skills and Vietnamese products' quality generally exceeds that of Chinese products.

If compared with Malaysia, said Khanh, Vietnamese labor and production costs are of similar quality but cheaper.

Those are the reasons wooden furniture exports to the US have soared for three years after entering the market, he concluded.

Khanh added many companies who made wooden products for EU exports have switched to making wooden furniture for the thriving US export market.

Cadivi Sales Department Head Nguyen Loc said if companies want long-term business with US partners, they should offer the most competitive prices and satisfy all contract requirements.

He added Cadivi has seen steady growth of 20 percent per year after entering the US market in 2005.