VALUE CHAIN STUDY FOR BAMBOO AND RATTAN IN · PDF filecombines the core competencies of the...
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Crafting out of poverty
VALUE CHAIN STUDY FOR BAMBOO AND RATTAN IN PHU THO, HOA BINH, THANH HOA AND
NGHE AN, VIET NAM
NOVEMBER 2010
Prepared by: Tuong Trang Hieu National Consultant Alfons Eiligmann International Consultant
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While efforts have been made to verify the information contained in this document, the International Trade Centre (ITC) cannot accept responsibility for any errors that it may contain. The views expressed in this report can in no way be taken to reflect the official opinion of the MDG Achievement Fund, the Viet Nam Trade Promotion Agency VIETRADE, the Viet Nam handicraft exporters association VIETCRAFT and ITC. The usual disclaimers regarding responsibilities apply to this report.
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PREFACE
This value chain study is prepared by the International Trade Centre (ITC) within the context of the joint programme entitled ‘Green Production and Trade to Increase Income and Employment Opportunities for the Rural Poor’. Viet Nam has achieved impressive economic progress since the doi moi (renovation) process was launched in 1986. Since 1993, real GDP growth has averaged 7.5% per year and the poverty rate has been reduced from 58% in 1993 to 13% in 2008. Growth has been driven by accelerated international integration, market liberalization and job creation in the private sector. However, persistent inequalities and poverty remain, particularly in rural areas where more than 90% of the poor reside. In many areas, the income generated from farming is not sufficient for smallholder farmers to reach an income level above the national poverty line of VND 200,000 per capita/per month. Against this background, the joint programme works to increase income and employment opportunities for raw craft material growers/collectors and grassroots handicrafts and furniture producers. The collection and processing of natural raw materials from forest areas and handicraft production constitute the most important sources of additional income for rural households. In fact, it is very often the additional income generated from handicraft production or the collection of raw material that determine whether rural households can lead a life above the national poverty line. The programme targets about 4,800 poor farming and craft-producing households in four northern provinces of Viet Nam: Thanh Hoa, Nghe An, Hoa Binh and Phu Tho. These provinces were selected due to: (i) the high incidence of poverty, especially among ethnic minorities; (ii) the concentration of raw materials and local production of crafts; and (iii) the possibility to build synergies with past and ongoing development activities Within the four targeted provinces, the programme will focus on the five following value chains: (i) bamboo/rattan; (ii) sericulture and weaving; (iii) sea grass; (iv) lacquer ware; and (v) handmade paper. The programme’s approach is to develop better integrated, pro-poor, and environmentally sustainable “green” value chains, enabling poor growers, collectors and producers to improve their products and link them to more profitable markets. The complex challenges faced by the five value chains, ranging from sustainable raw material production, entrepreneurial skills development and cleaner production to market linkages and trade information deficits, can best be addressed by a joint programme which combines the core competencies of the relevant UN agencies: UNIDO, FAO, ILO, UNCTAD and ITC. The authors would like to thank Mr. Ngoc Le Ba, Vice Chairman of the national handicraft exporters association VIETCRAFT for his advice and guidance during the preparation of the report. Lastly, the authors would like to thank all sector stakeholders, including farmers, household craft producers, companies, and officials in Hoa Binh, Thanh Hoa, Nghe An and Phu Tho provinces for making their time available to the study team and openly sharing their knowledge and views. The joint programme is is funded under the Thematic Window ‘Development and the Private Sector’ of the MDG Achievement Fund. The ‘Development and the Private Sector’ Window seeks “to facilitate the achievement of the MDGs through interventions that promote the development of private sector, through enabling policy frameworks, the growth of inclusive markets and the establishment of pro-poor public-private partnerships that create and sustain decent and productive employment.” For further details on the present study, please contact Mr. Koen Oosterom, Senior Technical Adviser, at: [email protected] or [email protected].
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LIST OF ABBREVIATIONS AND ACRONYMS
ASEAN Association of South-East Asia Nations
CB-TREE Community-based Training for Economic Empowerment
CPC Commune People’s Committee
DARD Department of Agriculture and Rural Development
DOIT Department of Industry and Trade
FFS Farmer Field Schools
FU Farmer's Union
GDP Gross Domestic Product
HRPC Vietnam Handicraft Research and Promotion Center
GTZ Gesellschaft für Technische Zusammenarbeit
ILO International Labour Organization
ITC International Trade Centre
JP Joint Programme
KAB Know About Business
Lao PRD Lao People's Democratic Republic
MARD Ministry of Agriculture and Rural Development
MDG Millennium Development Goals
NTFPs Non-Timber Forest Products
PMU Programme Management Unit
PPC Provincial People’s Committee
SMEs Small and Medium Sized Enterprises
SWOT Strengths, Weaknesses, Opportunities and Threats
SIYB Start and Improve Your Own Business
TNA Training Needs Assessment
UNCTAD United Nations Conference on Trade and Development
USSR Union of Soviet Socialist Republics
VC Value Chain
VTIC Viet Nam Trade Information Center
WU Women's Union
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TABLE OF CONTENTS
Page
I. INTRODUCTION ....................................................................................................................... 7
I.1 DESCRIPTION OF PROGRAMME INTERVENTION AREAS ......................................................................... 7 I.2 MAJOR SOCIO-ECONOMIC STATISTICS .............................................................................................. 8 I.3 DESCRIPTION OF DIRECT PROGRAMME BENEFICIARIES ........................................................................ 8 I.4 SCOPE AND COVERAGE OF THE STUDY .............................................................................................. 9 I.5 METHODOLOGY .......................................................................................................................... 10
II MACRO-ECONOMIC CONTEXT AND VC POLICIES AT NATIONAL AND PROVINCIAL LEVEL .......... 11
III VALUE CHAIN ANALYSIS ........................................................................................................ 13
III.1 OVERVIEW ................................................................................................................................. 13 III.1.1 World Market Figures of Bamboo and Rattan Trade ..................................................... 13 III.1.2 Statistics of Viet Nam Bamboo and Rattan Export ......................................................... 13 III.1.3 Import of Raw Material .................................................................................................. 15
III.2 DESCRIPTION AND QUANTIFICATION OF VC ACTORS ......................................................................... 15 III.3 ECONOMIC ANALYSIS OF THE VALUE CHAIN ..................................................................................... 23 III.4 CONSTRAINTS ANALYSIS ............................................................................................................... 26
III.4.1 Input Supply Constraints ................................................................................................ 26 III.4.2 Market Access Constraints ............................................................................................. 27 III.4.3 Technology and Product Development Constraints ...................................................... 28 III.4.4 Organization and Management Constraints .................................................................. 29 III.4.5 Services Constraints ....................................................................................................... 29 III.4.6 Financial Constraints such as Access to Short- and Long-term Financing ..................... 30
III.5 SOCIO-ECONOMIC PARAMETERS (GENDER, WORK AND LABOUR STANDARDS) ...................................... 30 III.6 ENVIRONMENTAL CONCERNS ........................................................................................................ 31 III.7 MESO LEVEL SUPPORT INSTITUTIONS AND OTHER PROJECTS ............................................................... 31
IV VALUE CHAIN UPGRADING STRATEGY .................................................................................... 32
IV.1 MARKET OPPORTUNITIES AND COMPETITIVE ADVANTAGE ................................................................. 32 IV.2 VISION ...................................................................................................................................... 33 IV.3 SUGGESTED FACILITATION ACTIVITIES ............................................................................................. 33
V RECOMMENDATIONS ............................................................................................................ 39
VI APPENDICES .......................................................................................................................... 41
Appendix 1: Major bamboo rattan, sea grass, carpet and lacquer ware export markets
of Viet Nam in 2008........................................................................................................... 41
Appendix 2: Raw rattan material import to Viet Nam in period 2004-2007 ......................................... 42
Appendix 3: Area of bamboo by 3 types of forests in the four JP provinces ........................................ 43
Appendix 4: List of PPC-recognized bamboo and rattan handicraft villages in Nghe An Province ....... 45
Appendix 5: List of bamboo rattan handicraft trade villages in Phu Tho ............................................. 47
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LIST OF TABLES
TABLE 1: POPULATION SIZE AND POVERTY RATE BY THE YEAR 2008 .................................................................... 8
TABLE 2: LIST OF TARGETED DISTRICTS AND COMMUNES ................................................................................... 8
TABLE 3: RAW MATERIAL AND BAMBOO RATTAN WARE EXPORTS IN VIET NAM ................................................... 14
TABLE 4: OVERVIEW OF THE VC IN 12 TARGETED COMMUNES IN THE 4 JP PROVINCES ........................................ 15
TABLE 5: CALCULATION OF VALUE ADDITION FOR EACH ACTOR OF THE LUNG VALUE CHAIN ................................... 25
LIST OF FIGURES
FIGURE 1: GLOBAL BAMBOO AND RATTAN EXPORT IN 2007 ............................................................................. 13
FIGURE 2: STRUCTURE OF EXPORTED BAMBOO AND RATTAN WARE PRODUCTS IN 2008 ........................................ 14
FIGURE 3: THE VC MAP FOR BAMBOO/ RATTAN HANDICRAFTS IN PROJECT COMMUNES IN NGHE AN AND THANH HOA PROVINCES IN THE NORTHERN VIET NAM ............................................................... 19
FIGURE 4: VALUE ADDITION IN THE LUNG VALUE CHAIN IN THE NORTH, VIET NAM ............................................... 24
FIGURE 5: CRITICAL CONSTRAINTS OF THE RATTAN AND BAMBOO VALUE CHAIN AT MICRO LEVEL ............................ 26
FIGURE 6: CRITICAL CONSTRAINTS OF THE RATTAN AND BAMBOO VALUE CHAIN AT MESO LEVEL ............................ 29
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Programme Areas
I. INTRODUCTION
I.1 Description of Programme Intervention Areas The programme is implemented in four provinces in the North of Viet Nam: Thanh Hoa, Nghe An, Hoa
Binh and Phu Tho. These provinces were selected due to: (i) the high incidence of poverty, especially
among ethnic minorities; (ii) the concentration of raw materials and local production of crafts; and (iii)
the possibility to build synergies with past and ongoing development activities.
Phu Tho is a mountainous midland province situated at
80 km northwestern of Hanoi, and encompassed by Vinh
Phuc and Hanoi to the East, Son La province to the West,
Hoa Binh province to the South, and Yen Bai and Tuyen
Quang provinces to the North. The province has fairly
advantageous transport conditions: With the pass-by of
three great rivers (Hong river, Lo river and Da river); the
Hanoi-Lao Cai-Con Minh railway route; inland travel on
National highway No. 2 and the Asian highway which
bridges China to Viet Nam and other ASEAN member
countries.
Nghe An is located at the heart of the Northern Central
region, on the North-South transport route and Asian
East-West corridor. It is 300 km out of Hanoi. Following
the Road No. 8, it is 80 km from the Viet Nam-Laos border
and about 300 km from the Laos-Thai border. Nghe An is
integrated into all types of national transport: Inland
road, railway, waterway, airway and seaway. Having 419
km length of land border and 82 km coast, the province
also has the Vinh airport, Cua Lo port and the entire
infrastructure under improvement, extension and new
construction.
Hoa Binh war re-established in October 1991, sharing border with Hanoi and being the cross-section
amongst northwestern provinces, the Red river delta and the economic hub triangle Hanoi-Hai Phong-
Quang Ninh with a well-developed road network (National road No. 6, Ho Chi Minh trail, National road
12B, National road 15) and river transport (on Da and Boi rivers).
Thanh Hoa is the northernmost province of the Central region, at 150 km south of Hanoi, 1,560km
north of Ho Chi Minh City. It shares borders with Son La, Hoa Binh, Ninh Binh to the North, Nghe An
province to the South, Hua Phan of Lao PDR to the West and North gulf to the East. The province has
good access to the transport network through the north-south railway, Ho Chi Minh trail, and national
roads: 1A, 10, 45, 47, and 217 and the Nghi Son deep port and river system which ease the north-south
waterway transport within the province as well as to the Central region and international transport.
Currently, Thanh Hoa has built the Sao Vang airport and is planning to build another international
airport nearby the sea to serve the Nghi Son economic zone and tourism demand.
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I.2 Major Socio-economic Statistics
According to the most recent figures presented in Table 1, the average GDP per capita in 2008 in all
four provinces was below the national level of 17,180,000 VND. Of the four provinces, Phu Tho has the
lowest GDP per capita. The statistics also show that the percentage of poor households in the four
provinces is higher than the country’s average level of 13% in 2008 (based on the national standard for
poor households regulated by the Decision 179/2005/QD-TTg dated 08/07/2005, in which households
living in rural areas with equal or less than 200,000VND/per capita/month are considered to be poor
households).
Table 1: Population size and poverty rate by the year 2008
Provinces Population Number of
households
GDP per capita
(VND)
% of poor
households
Phu Thọ Province 1,364,522 274,908 8,842,097 18.41
Hoa Bình Province 788,274 174,198 13,090,660 19.34
Thanh Hoa Province 3,405,000 746,428 10,295,558 21.15
Nghe An Province 2,919,214 758,333 10,490,458 17.54
Source: The 2008 statistical year books of 4 provinces.
I.3 Description of Direct Programme Beneficiaries
In collaboration with provincial authorities, 4,822 poor farming and crafts producing households have
been selected in the four targeted provinces as direct programme beneficiaries. Criteria for the
selection of direct beneficiaries include poverty, current activity in value chain, women and ethnic
minority.
The list of the 25 targeted communes is shown in Table 2. These communes belong to 14 different
districts in the four provinces. The programme will implement promotion activities in 5 value chains in
these 25 communes, with the following grouping of communes: 12 communes in the bamboo and
rattan value chain, 8 communes in the sericulture value chain, 2 communes in the sea grass value
chain, 2 communes in the lacquer value chain and one commune in the handmade paper value chain.
Of the 25 targeted communes, there are 15 communes undertaking the Phase II of the national
Programme 135. 1
Table 2: List of targeted districts and communes
Pro-
vince # District Commune
Under
Programme 135 Value chain
Number of
beneficiaries
NG
HE
AN
PR
OV
INC
E
1 Quy Chau
1 Chau Tien Yes Sericulture 110
2 Chau Hanh Yes Sericulture 60
3 Chau Thang Yes Bamboo/Rattan 150
2 Nghia Dan 4 Nghia Hoi Yes Bamboo/Rattan 100
3 Quynh Luu 5 Quynh Trang No Bamboo/Rattan 80
1 They are classified as extremely difficult communes, border communes, and mountainous communes in accordance to the
Decision No. 164/2006/QĐ-TTg, dated on July 11 2006.
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Pro-
vince # District Commune
Under
Programme 135 Value chain
Number of
beneficiaries
6 Quynh Thach No Bamboo/Rattan 180
4 Dien Chau 7 Dien Van Yes Bamboo/Rattan 150
8 Dien Kim No Sericulture 174
5 Yen Thanh 9 Kim Thanh Yes Bamboo/Rattan 50
10 Lang Thanh No Bamboo/Rattan 120
THA
NH
HO
A
6 Nhu Thanh 11 Hai Long No Bamboo/Rattan 311
7 Nong Cong 12 Thang Binh No Bamboo/Rattan 200
13 Tan Tho No Bamboo/Rattan 199
8 Nga Son 14 Nga Tan Yes Sea grass 431
15 Nga Thai Yes Sea grass 260
9 Thieu Hoa 16 Thieu Do No Sericulture 193
HO
A B
INH
10 Luong Son 17 Lien Son Yes Bamboo/Rattan 604
18 Hop Hoa Yes Handmade paper 250
11 Tan Lac 19 Tan Lac No Sericulture 50
12 Mai Chau 20 Na Phon No Sericulture 100
21 Pa Co Yes Sericulture 50
PH
U T
HO
13 Tam Nong 22 Tho Van Yes Lacquer ware 180
23 Di Nau Yes Lacquer ware 120
14 Cam Khe 24 Tinh Cuong Yes Sericulture 200
25 Yen Tap Yes Bamboo/Rattan 500
TOTAL 4,822
Source: PMU of JP
It is worthwhile noting that 41% of the selected direct beneficiaries are considered as poor, in
accordance with the official national poverty line of 200,000VND/per capita/month. As this percentage
is two times higher than the percentages of poor households in the 4 provinces (see table 1), it can be
concluded that the programme is indeed pro-poor. In addition, 1,432 beneficiaries from ethnic
minorities have been included in the list of beneficiaries, representing Thai, Muong and H’mong.
Handicraft production also strengthens the economic position of women, who are involved in many
stages of handicraft production in the five different value chains.
I.4 Scope and Coverage of the Study
Contributing towards the realization of the JP Outcome 1: “Improved understanding of the handicrafts
and small furniture value chains in four provinces”, five value chain studies are prepared, one for each
value chain identified for the programme: (i) bamboo/rattan; (ii) sericulture and weaving; (iii) sea grass;
(iv) lacquer ware; and (v) handmade paper.
The present study covers the rattan & bamboo value chain and includes:
A presentation of key macro-economic framework data
An analysis of the main value chain actors from raw material supply to the international market
and support organizations at meso level
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An assessment of the strengths and weaknesses of the different actors and income generation
along the chain
An identification of competitive advantages and market opportunities
The development of an intervention strategy for value chain upgrading and value-addition,
with the view to enhance income generation along the respective value chains.
I.5 Methodology
A value chain (VC) is defined as:
The sequence of related business activities (functions) from the provision of specific inputs for
a particular product to primary production, transformation, marketing, and up to the final sale
of the particular product to consumers (the functional view on a value chain).
The set of enterprises (operators) performing these functions i.e. producers, processors,
traders and distributors of a particular product. Enterprises are linked by a series of business
transactions in which the product is passed on from primary producers to end consumers.
A business model for a particular commercial product using a particular technology and a
particular way of coordinating production and marketing.
Secondary data collection
A large amount of information was collected from relevant organizations and agencies at provincial,
district and commune level. The national consultant prepared a checklist of information needed and
arranged exchange meetings with related parties, who provided him with a number of studies and
reports, such as relevant study reports on rattan and bamboo sub-sector meetings in the four JP
provinces, a long-term plan to develop raw material for rattan and bamboo craft villages, a report on
the master plan for rattan and bamboo raw material development.
Semi-structured interviews
Several interviews took place during the field survey. The consultant used a checklist to interview
commune leaders. 5 interviews were held in the project communes to get baseline data of the
communes. Further discussions on qualitative information were held with regard to the existing
situation of rattan and bamboo handicrafts in the communes: Raw material supply, handicraft making
and product markets etc. The consultant also had discussions with several key enterprises and
cooperatives in the four JP provinces. Some small traders were met and some handicraft makers were
visited.
Stakeholder meetings
After the field survey, the consultant team briefly summarized the preliminary main findings on the VC.
With strong support of the PMU and the provincial coordinator in Nghe An, the consultants facilitated
a stakeholder meeting to validate the findings and get confirmation on proposed upgrading elements
and elaborated facilitation activities. The meeting was attended by 22 participants from Nghe An and
Thanh Hoa representing provincial departments, target communes, enterprises and the JP programme.
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II MACRO-ECONOMIC CONTEXT AND VC POLICIES AT NATIONAL AND PROVINCIAL LEVEL
Vietnamese have always produced substantial handmade products. It is both cultural and also a matter
of necessity in what has been till recently a very poor but also very art and culture loving society.
Promoting a rapidly growing handicraft industry in Viet Nam is a part of the Vietnamese government’s
plan to foster economic development across all regions of the country, reducing unemployment,
especially in the rural areas, and raising exports. With more than 1,400 ancient handicraft villages,2
Viet Nam is gradually revealing both its potential and the wide range of its products to the
international handicraft markets.
While most handicraft villages cluster around the Red River and Mekong Deltas in the North and the
South, Central Viet Nam is also blessed with abundant natural materials and thus, has been targeted as
a major supply center. The handicraft industry has created millions of jobs for local workers, elevating
their living standards while helping to preserve ancient traditions. Handicraft villages also bring about
benefits as tourism destinations, attracting an increasing numbers of tourists every year.
Viet Nam has been amazing the international markets with both the variety of its handicraft items and
the skills of its craftsmen. Valued craft items from Viet Nam include wooden furniture, porcelain,
lacquer, silk, embroidery, candles, jewelry, imitation flowers and glass products. Although the export
turnover from the handicraft industry does not compare to other industries such as oil & gas or textile,
handicrafts have an advantage of low overall production costs. While in 2000, the handicraft export
turnover was only about $274 million,3 already reaching $565 million in 2005, it increased to as much
as $820 million in 2007 resp. to some $880 million in 2009. According to the Ministry of Industry and
Trade, the handicraft export turnover is expected to reach $1.5 billion by 2010.4 Despite favorable
conditions to be found in view of both the Vietnamese government and the export markets, the
handicraft industry in Viet Nam still is facing fierce competition from other countries, including China
and Thailand. In addition, foreign customers have commented on the limited production capacity and
the lack of information on current market demand, which they found Vietnamese handicraft producers
to have, which leads to Vietnamese craftsmen producing insufficient and outdated designs and styles.
In recent years, the Vietnamese Government has paid more attention to handicraft production and
made efforts in promoting crafts in rural trade villages. As a matter of fact, the Vietnamese
Government issued specific policies to encourage trade villages in the rural area. The most remarkable
policies are stipulated by the Decree No. 66/2006/NĐ-CP,5 dated on 07/07/2006; Decision No.
132/2000/QĐ-TTg6 dated on 24/11/2000 and Circular No. 116/2006/TT-BNN7 dated on 18/12/2006.
The Vietnamese rattan and bamboo craft has a long history. There are currently 723 craft villages all
over the country involving about 350,000 workers. Each craft village has its own features, talents and
fine arts. Among others, craft villages of ethnic minorities such as Kho Mu, Thai, Tay, Nung and La Hu
have made a significant contribution to the development of Vietnamese rattan and bamboo craft. Ha
2 Runckel & Associates, Inc. Business in Asia.com, retrieved on July 31, 2010
3 According to VIETCRAFT: http://vietcraft.org.vn/tin-tuc/tinh-hinh-xuat-khau-cua-hang-thu-cong-my-nghe-viet-nam
4 According to various newspapers sources (www.vneconomy.vn, www.kinhtenongthon.com.vn, etc.)
5 About development of rural trades
6 About some policies for promoting trade villages in rural area.
7 Guidelines for elaborating some contents of the Degree No. 66/2006/NĐ-CP
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Tay (recently merged to Hanoi), Thai Binh, Nam Dinh, Phu Tho, Thanh Hoa, Nghe An, Quang Nam
provinces have a particularly long tradition of the rattan and bamboo crafts and involve a relatively
large number of craft villages in Viet Nam. There are also diverse kinds of enterprises and cooperatives
active in processing, production and export of different bamboo and rattan products.
The majority of enterprises is small-scale, is working with outdated technology and equipment at low
productivity and produce non-premium low quality products.8
Although statistical data on the entire natural rattan reserves are not available, it is recognized that in
Viet Nam there are 6 natural rattan families with 30 species widely distributed, of which a high density
is seen in 3 regions: Northwest, North-Central and South-Central region.
During the last decades, due to crowded, unplanned and poorly-managed exploitation, the natural
rattan resources have been exhausted. In some well-known natural rattan forests in Phu Tho, Thai
Nguyen, Yen Bai, etc., many species are facing the threat of extinction. Aware of this alarming fact and
in order to maintain sufficient input supply, Viet Nam has paid attention to land zoning, reforestation
and new plantation of rattan in recent years. Farming methods applied are either intensive cultivation,
intercropping or the agro-forestry model. But the situation has not yet improved. According to industry
experts, Viet Nam is still facing the challenge of scarce bamboo and rattan raw material supply. Many
enterprises rely on imported raw material.
The development of the rattan and bamboo craft has been going up and down. In the 1970s and
1980s, the main export market of Vietnamese rattan finished products was the Soviet Union. After the
collapse of the USSR, Viet Nam had to export rattan raw material and semi-processed material to
neighboring countries like Thailand, Hong Kong, China, Taiwan and Japan. From 1993 to 1995, raw
rattan exports declined as a result of Decree 90, which was a government regulation forbidding the
export of raw or semi-processed rattan material in order to stimulate the national processing
industries. Following the ban, the rattan sector in Viet Nam experienced a lot of problems, which were
largely due to a lack of processing technologies and skilled craft people. However, by the end of 1996,
the Vietnamese rattan processing industry had recovered. Since 1996, the export of finished products
has continued to increase.
The rattan and bamboo craft has been supported by some related policies for encouraging trade
villages in rural area as mentioned in the previous paragraph. However, there has not yet been a
specific policy for promoting rattan and bamboo craft at national level. Since the establishment of the
Viet Nam Handicraft Exporter Association in 2007 and the formation of the Viet Nam Rattan Network
in 2009, the rattan and bamboo craft has been getting many advantages and approaching many
opportunities.
Although a national master plan for rattan and bamboo crafts has not yet been developed, MARD has
recently formulated a long-term development planning of raw material for trade villages of main crafts,
which includes rattan and bamboo craft villages.
8 Compiled from Industry and Commerce Online Newspaper, data in 2009
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III VALUE CHAIN ANALYSIS
III.1 Overview III.1.1 World Market Figures of Bamboo and Rattan Trade The global bamboo and rattan export value was 2.5 billion US$ in 2007. Top exporters include China
(46%), Indonesia (16%), Viet Nam (5%); Thailand and Philippines rank No. 4 (each 3%). The structure of
exported products is presented in the Figure 1 below.
Figure 1: Global bamboo and rattan export in 2007
Source: UN COMTRADE
The figure shows that industrial products (bamboo powder, bamboo coal, bamboo strand woven,
paper) make up for the biggest part of the total export value. The category of bamboo and rattan
furniture ranks second, while ranking third are bamboo plaited products, followed by rattan plaited
products and raw bamboo and rattan material.
III.1.2 Statistics of Viet Nam Bamboo and Rattan Export
Viet Nam’s bamboo and rattan ware products are exported to 120 foreign countries. The average
export turnover in recent years was around 200 million US$ (219 million US$ in 2007; 224.7 million US$
in 2008).
The data presented in Table 3 demonstrate relatively impressive growth rates of the bamboo and
rattan sub-sector in the last 10 years, particularly rocketing in the period from 2003 to 2007.
Rattan plaited
products
288M, 12%
Bamboo
plaited
products,
547M, 22%
B&R raw
materials,
119M, 5%
Bamboo
industrial
products
669M, 26%
B&R funiture
and seats,
653M, 26%
Bamboo
shoots 227M,
9%
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709,466
0.3%
132,575,134
60% 37,977,268
17%
27,941,558
12% 24,829,488
11%Bamboo basket
Bamboo plait
Rattan basket
Bamboo, rattan
furniture
Bamboo, rattan seats
Table 3: Raw material and bamboo rattan ware exports in Viet Nam
Year Raw bamboo and rattan
material in use (tons)
Bamboo and rattan ware
product export value
(in thousand USD)
Annual growth rate (%)
2000 5,068 65,932 37%
2001 4,626 73,216 11%
2002 7,621 88,747 21%
2003 8,830 99,737 12%
2004 9,911 138,218 39%
2005 9,000 140,000 27%
2007 n/a 219,000 25%
2008 n/a 224,700 3%
Source: Compiled from MARD, National NTFPs Conservation and
Development Project, period 2006-2020, and Information Centre of the Ministry of Industry and Trade
Major export markets of the product categories bamboo/rattan, leaf, carpet, lacquer ware are
Germany, Japan, France, Spain and Taiwan. Specific data on the export of bamboo, rattan, sea grass,
carpets and lacquer ware in 2008 are presented in Annex 1.
In 2008, bamboo plaited products accounted for the major part of exports (60%), followed by rattan
plaited products (17%). Bamboo and rattan furniture only accounted for 11% of bamboo and rattan
products.
Figure 2: Structure of exported bamboo and rattan ware products in 2008
Source: UN COMTRADE
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III.1.3 Import of Raw Material
The rapid depletion of natural rattan raw material has led to increasing raw material imports to Viet
Nam from neighboring countries. The major countries exporting raw rattan to Viet Nam are Laos PDR,
Philippines, Cambodia and Singapore.
But imports decreased significantly in 2007 and 2008, reflecting the reduced international demand for
finished rattan products. Specific data on imports of rattan raw material during the period 2004 to
2007 are presented in Annex 2.
III.2 Description and Quantification of VC Actors
Table 4 below provides an overview on the current situation of the bamboo/rattan VC in the different
target communes of the JP project. It explains the role of actors involved in the rattan/bamboo VC
according to the different stages of the value chain.
Table 4: Overview of the VC in 12 targeted communes in the 4 JP provinces
Province/
Commune
Raw material
supply
Raw material
trading/processing Handicraft production Finishing & Trading
Ngh
e A
n
Ch
au T
han
g
About 150
households
regularly collect
Lung Bamboo
from natural
forest during 7 - 8
months.
Materials are
splitted and dried
in the forest
before being
transported to
the villages.
Few traders in the
commune (e.g.
Huong Thao Co.,
Bao Thang Co.)
gather raw
materials and sell
to provincial SMEs
who are
wholesalers/
exporters of Lung
handicraft products
About 70% of
households can make
some tools and
furniture from Lung
Bamboo for domestic
use only.
No finished products for
trading.
Ngh
ia H
oi The people in Nghia Hoi have already planted 98,000 rattan seedlings during 2008-2010 with
the variety KM83, provided by Dung Tan Co. under a promotion programme of the Vietnam
Rattan Network. Handicraft production has not been developed in this commune, which is
selected for further rattan plantation (with commitment of the company Duc Phong)
Ngh
e A
n
Qu
ynh
Tran
g So far, only few households in Quynh Trang have planted rattan. But there are about 300
households in the commune who show interest in rattan plantation, which is a rather new
business for them. The commune is, therefore, selected for rattan plantation.
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Province/
Commune
Raw material
supply
Raw material
trading/processing Handicraft production Finishing & Trading
Ngh
e A
n
Qu
ynh
Th
ach
Lung bamboo
material is
collected by local
people in Quy
Chau district.
Rattan is
collected in other
districts in Nghe
An.
Rattan and Lung
bamboo material is
provided by small
traders to Phuong
Anh company and
then distributed to
craft households.
About 600 workers are
involved in making
bamboo baskets.
Phuong Anh company is
active in this district with
regard to production and
trading of rattan/
bamboo handicraft
products. Main clients
are Tien Dong, Tuan
Quang and Minh Trang
exporters in Hatay,
Hanoi.
Ngh
e A
n
Die
n V
an
The main material
is Lung bamboo
supplied from
Chau Thang
Commune, Quy
Chau district, by
local collectors
(dried and semi-
processed form)
The material is then
provided by traders
to Duc Phong
company, before
being distributed to
craft households
through a number
of local focal points
of Duc Phong in the
commune.
About 90 households
are currently making
bamboo lamp shades
Duc Phong – The leading
company for bamboo
rattan producing and
export in Nghe An has
long-term contract with
handicraft makers in this
commune.
Ngh
e A
n
Kim
Th
anh
There are about 3 ha of garden rattan in the commune, variety KM83. But in addition, there
are about 500 ha of garden area in the commune, which can be used for rattan plantation.
The commune is, therefore, selected for further rattan plantation
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Province/
Commune
Raw material
supply
Raw material
trading/processing Handicraft production Finishing & Trading
Lan
g Th
anh
Bamboo raw
material is
supplied from
other districts in
Nghe An.
The raw material is
then provided by
small traders.
About 70 – 80
households are making
Lung and other
bamboo products
(tools for agriculture
production, baskets for
domestic use) to sell in
the local markets.
The Ngoc Canh company
located in Do Thanh
commune has planned
to expand their business
to Lang Thanh commune
by delivering training for
the existing craft makers
in Lang Thanh on making
new products
Than
h H
oa
Hai
Lo
ng
Hai Long commune is being considered as a center for rattan material supply in Thanh Hoa
province (with an active role of Nam Duong Company). There have been successful
experiments with rattan in the commune, which also has a tree nursery. The commune is,
therefore, selected for rattan plantation
Than
h H
oa
Than
g B
inh
Main material is
Lung bamboo
from
mountainous
districts of Thanh
Hoa (Ba Thuoc,
Quan Son and
Quan Hoa).
Materials are then
provided by traders
to Quoc Dai
Company, before
being distributed to
craft households.
There are 205
households currently
making lamp shades
from Lung bamboo for
Quoc Dai Company.
Quoc Dai is the biggest
rattan & bamboo
producing and trading
company in Thanh Hoa.
It is one of the big
suppliers of Ngoc Son
Hafuco in Ha Tay and Sai
Gon Metro
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Province/
Commune
Raw material
supply
Raw material
trading/processing Handicraft production Finishing & Trading
Than
h H
oa
Tan
Th
o
Rattan raw
material is
supplied from
other provinces.
Processed materials
are provided by
Huy Hoang, Phong
Chau companies.
251 household
members of the Tan
Tho cooperative are
making rattan &
bamboo products.
Besides bamboo and
rattan, the group is
also working with sea
grass and other
materials.
Products are purchased
by Phong Chau, Huy
Hoang and Cuong Hoe
companies in Ha Tay,
Hanoi.
Ho
a B
inh
Lien
So
n
Few rattan
collectors supply
raw material to
local traders.
There is a
demonstration
plot of rattan
plantation, an
area of 2000 m2
in
1 household (4
years old rattan).
Rattan material is
processed in Hatay
and supplied by
some traders in the
communes.
300 workers, organized
in groups, make rattan
& bamboo handicrafts.
Products are purchased
by some traders and
then sold to some big
companies in Hatay
(Doan Ket, Ngoc Son
Companies).
Ph
u T
ho
Yen
Tap
Rattan raw
material is not
made available in
the commune.
Under support
from DARD, 40 ha
of rattan have
been planted in
the commune
three years ago.
Inter-cropping
methods are
applied on
household forest
land.
About 12 local
collectors buy
rattan material
from other districts
and from outside
the province. The
Can Lieu
cooperative does
raw material
processing.
Can Lieu cooperative
organizes its
production at
household level with
the participation of 52
members. Recently,
another 250 people
have received training
by HRPC.
Then it gathers products
to sell out to other
companies in Hung Yen
(Phu Minh Co.) & Ha
Nam (Ngoc Dong Co.).
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8 communes out of 12 targeted communes in the 4 provinces are currently involved in the existing
bamboo and rattan VC. Among them, 7 communes with 1,578 workers are currently producing various
rattan and bamboo products. The remaining 4 communes have the potential and are committed to
enter into rattan plantation.
Figure 3: The VC map for bamboo/rattan in project communes in Phu Tho, Hoa Binh, Thanh Hoa and Nghe An
Dark grey: Actors within programme districts, Light grey: Actors within programme provinces
Source: Compilation by the authors, July 2010
As illustrated by the map, the bamboo and rattan VC in the four provinces targeted by the JP includes
two main market channels, which differ in importance as per the following description:
In the first market channel, small traders buy raw material from the local harvesters and then
stock up sufficient volumes of material. In some cases, the small traders of rattan conduct a
primary processing on their premises and supply the processed material to provincial
handicraft producers (enterprises and cooperatives) while the Lung material traders often sell
to the producers without having any further processing step. Semi-finished handicraft articles
are often produced by local farmers at their houses. Normally, a group of contracted
households is coordinated by traders or focal points of enterprises at the respective locality.
The local traders and the focal points work for the enterprises based on commission. The
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distance between the enterprise and the farmer groups can reach up to 80 km. The farmer
groups have contracts with the focal points of enterprises (which are often framework
contracts, allowing for timely adjustment to the market prices of products and raw material).
Semi-finished products are delivered by the contracted households, are checked by the agents
and transported to the handicraft enterprises/cooperatives for finalizing. Final products are
sold to exporters, who then sell them to foreign importers in the international market. Few
provincial enterprises directly sell the rattan/bamboo ware products to foreign importers.
In the second market channel, trade villages make use of bamboo and rattan material to
produce furniture, tools for fishing, harvesting or reserving agricultural produces. Some
bamboo/rattan products are very popular such as flat baskets, containing baskets, sieves,
shrimp catchers, fish traps, bamboo sheets, bamboo mats, grounding poles and roof poles for
construction. This group of products is mainly sold on the domestic market to end users
through local traders.
Along the bamboo/rattan VC in the four JP targeted provinces, there are four types of actors: (a) Raw
material collectors; (b) Material traders/Processors; (c) Community-based bamboo/rattan handicraft
producing groups (d) Provincial export-oriented bamboo and rattan handicraft producers.
Raw material collectors
The diversity of bamboo and rattan species is fairly abundant in the project areas, amongst them are
some popular species such as Dendrocalamus, Bambusa sp; Neohouzeaua sp, rattan of different
species, Bambusa longisima sp. nov and Arundinaria. The distribution and outputs of these species vary
between the provinces. The total areas of bamboo and Neohouzeaua forest in Thanh Hoa, Nghe An,
Phu Tho and Hoa Binh are 91,161 ha, 79,869 ha, 19,292.5 ha and 7,761 ha respectively (specific data in
Annex 3).
To date, there are no statistical data available referring to the number of households that are engaged
in the exploitation of raw bamboo and rattan either from natural forest or farmed forest. In general,
the availability and collection of raw material in the rattan and bamboo areas is reported as following:
In Phu Tho province, raw material is fairly diversified, with bamboo and Neohouzeaua being
input supplies for traditional handicraft villages, screen weaving cooperatives and factories
producing chopsticks, tooth-picks and paper powder, etc.; however, the natural reserve of raw
rattan is small in this province, even if the quality of garden rattan in Phu Tho is being
considered the best in Viet Nam. In Yen Tap commune, Can Lieu Cooperative purchases raw
material from 12 local collectors who buy raw rattan from other districts inside and outside of
the province. Under the support of DARD, 40 ha of rattan were planted 4 years ago using inter-
cropping methods.
Hoa Binh is the most important source of bamboo material to supply a hundred craft villages in
former ha Tay province. In Hoa Binh, there is a number of farmers harvesting raw bamboo and
rattan material, but not on a regular basis. Part of the harvested raw material is sold to traders
and the rest is sold to broom producers to make broom handles and tightening strings. In the
target commune of Lien Son, there are few local farmers collecting rattan from the natural
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forest. However, the majority of primarily processed materials is provided by some big
companies in Ha Tay through local traders.
Thanh Hoa is one the provinces with the largest volume of bamboo in Viet Nam. In Thanh Hoa,
there are some hundreds of farmers specializing in harvesting Lung bamboo (Bambusa
longisima sp. Nov) in Quan Son, Ba Thuoc and Quan Hoa districts) to supply to export-oriented
handicraft producers (Like Quoc Dai Company). In the two targeted communes of Tan Tho and
Thang Binh, rattan and Lung raw materials are not available for either cultivation or harvesting.
Therefore, Lung bamboo is mainly provided by traders from other districts like Quan Son, Ba
Thuoc and Quan Hoa. Raw rattan is either sourced from other districts in Thanh Hoa or from
Nghe An. Tan Tho has experimented with a plantation of almost 2 ha, which is growing well.
The major raw material to be found in Nghe An is Lung Bamboo (Bambusa longisima sp. Nov),
concentrating in Quy Chau and Que Phong districts; thus there are hundreds of farmers in Chau
Thang commune who earn their living by regularly harvesting the material in the natural forest.
The Chau Thang commune has become a very important source of raw Lung Bamboo for many
handicraft communes in Nghe An province and also former Ha Tay province. The harvesting is
mainly done manually, in a simple way, following the requirements of processors. For example,
farmers usually do the pre-processing of Lung Bamboo in the forest, by cutting it into short
sections, peeling the outside cover, splitting and drying in the sunlight. When fully dried, the
bamboo is transported to the villages. The harvesting method for bamboo varies depending on
the final products, i.e. on whether chopsticks, building poles etc. are made.
Material traders/ processors
As stated above, traders are divided into two sub-groups:
The first group consists of local small traders. Their main business is to buy raw bamboo and
rattan from local farmers and stock the material up to a certain volume, which is then sold to
interested enterprises and cooperatives at traders’ places. In project areas, there have seen
some traders of this types in Chau Thang commune of Quy Chau, Nghe An, as well as in in Ba
Thuoc, Quan Son and Quan Hoa districts of Thanh Hoa. Their business is merely an
intermediary trade between local harvesters and processors. They do not engage in any
processing activity.
The second group of traders is more involved in processing activities. After collecting raw
material from local harvesters, the traders undertake some steps of processing and
preservation of rattan material in particular. Then, as the material stock gets to a sufficient
volume, traders will transport it to processors who are located within or outside of the
province. Besides supplying material, they also coordinate and organize the outsourcing of the
production of handicrafts to farmer groups on behalf of handicraft enterprises. This is done by
the farmer groups led by Mrs. Thang in Lien Son commune of Luong Son district, Hoa Binh or
Can Lieu group of Mrs. Lieu in Yen Tap commune, Cam Khe district, Phu Tho Province.
Community-based bamboo/rattan handicraft producing groups
In the last two decades, the rural areas in Viet Nam have been undergoing continuous transformation
and change on the way to a market economy and global integration. One of the effects is the
disappearance of many traditional trade villages and emerging new trades in parallel. Bamboo and
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rattan handicraft is also exposed to this trend. However, several craft villages have been able to remain
untouched by this trend, staying in the trade with the support of the relevant authorities. According to
aggregated statistics from provincial line departments, there are more than 16,000 people employed
as regular work force in bamboo and rattan handicraft production in the four targeted provinces. This
work force is divided into two groups, with one of them working in the traditional handicraft villages
and the other working as outsourced processors on behalf of handicraft enterprises from other
districts (where handicraft making is a newly-adopted profession).
There are more than 50 traditional handicraft villages in the four provinces, 37 of which are from Nghe
An (See attached the Annex 4 - List of PPC-recognized bamboo and rattan handicraft villages in Nghe
An) and Annex 5 - List of bamboo/rattan handicraft trade villages in Phu Tho). In terms of labor
quantity, the first group has more farmer households with a high proportion of them also being
engaged in raw material collection. The traditional trade villagers produce a wide range of handicrafts
for domestic consumption.
The second group includes people working in newly created trade villages, farmer groups involved in
handicraft processing and traders working on the basis of production sub-contracts on behalf of
external enterprises or cooperatives. The product outputs of this group comply with the requirements
of the outsourcers and are quite diversified, including the export-oriented product lines. In the
beginning, enterprises often organize trainings for household groups to make some products of
standard designs. An additional training is only necessary if there is a change in product design. On the
other hand, enterprises also provide raw material to production households.
The work force of the 7 JP communes involved in bamboo and rattan production can be further divided
in 3 sub-groups according to the nature of the product and the characteristics of the VC:
The first sub-group, which belongs to the newly created trade villages, mainly use Lung
bamboo. It includes 3 communes with the participation of 895 workers: Quynh Thach, Dien
Van in Nghe An province and Thang Binh in Thanh Hoa Province. The main items produced are
lamp shades, bamboo baskets. Their main clients are Ngoc Son, Doan Ket and then IKEA.
The second sub-group (which also belongs to the newly created trade villages) mainly uses
rattan raw material. It includes 3 communes with the participation of 603 workers: Yen Tap in
Phu Tho Province, Lien Son in Hoa Binh Province and Tan Tho in Thanh Hoa Province. The crafts
produced are quite diversified, comprising rattan baskets and rattan trays
Lang Thanh commune with 80 workers is seen as a traditional handicraft village in Nghe An and
belongs to the third sub-group as it produces traditional and low-end products for domestic
use as well as for agricultural production made from common bamboo. Their main items
produced are: Broad flat drying basket, fish trap, pillow etc. The group has been attracting
Ngoc Canh Company for a possible investment on training and outsourcing for the production
of new handicraft articles.
Provincial export-oriented bamboo and rattan handicraft producers (SMEs)
There are about 30 export-oriented bamboo and rattan handicraft enterprises in the four targeted
provinces. 20 amongst them are from Thanh Hoa and Nghe An; the others are from Phu Tho and Hoa
Binh. 14 of them are currently doing business in the JP targeted communes in the four provinces
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A handicraft finishing workshop
(please see also Annex 4). These enterprises are quite diverse in terms of legal status and ownership:
Some of them have developed from state-owned enterprises such as Duc Phong company; some are
operating as cooperatives, such as Can Lieu Cooperative, Phu Cat bamboo screen cooperative, Doan
Hung bamboo screen cooperative. Besides there are several private and joint stock enterprises such as
Dinh Trieu private enterprise, Nghi Loc district, Ngoc Canh Company Ltd, Phuong Anh Company Ltd in
Nghe An, Duong Thanh Phu Joint stock enterprise, Viet Tri city, Phu Tho; Quoc Dat Limited Company,
Hoang Hoa district, Thanh Hoa, Sanda Company Ltd, Hoa Binh province. The bamboo and rattan ware
produced by these enterprises are highly diversified in
design and usage, meeting the demands of consumers
on different international markets.
There are, however, only some enterprises capable of
doing direct export business with foreign importers
and distributors such as Dinh Trieu private enterprise,
Duong Thanh Phu Company, etc. Typical products for
direct export are, for example, bamboo baskets
exported to the US, chopsticks, tooth-picks and
bamboo skewer to Malaysia, Singapore, Taiwan, US
and Korea. The majority of the handicraft companies
have to export through Vietnamese export companies
(such as Ngoc Son or Vinh Long). Some big companies in the four provinces such as Duc Phong
company (Nghe An), Quoc Dai company (Thanh Hoa) are suppliers of IKEA through Ngoc Son company
(Hanoi). In recent years, the export market of these companies has been relatively stable and attaining
steady growth. To a larger extent, their existing supply capacity is lower than the order volume of
exporters. There are roughly 6,000 communal laborers working under outsourced contracts for these
companies. Interestingly, regular workers in the companies’ plants are not many as such, ranging from
20-70. The employed workers are specialized in product finalization and packaging. The main concern
of these enterprises is input supply.
III.3 Economic Analysis of the Value Chain
Added value is defined as the additional value generated at each stage of the value chain. It is
therefore the difference between the price of the output item and the costs of intermediate goods and
other inputs bought at one stage in the value chain. It is a macro-economic indicator for measuring the
contribution of a value chain to the Gross Domestic Product (GDP) and it allows to understand the
importance of different manufacturing and trading levels with regard to the economic value, which
they are creating.
Value addition is not a synonym for profit. In fact, it includes all company internal costs such as salaries
paid, rent, interest and depreciation. In case of an export company doing finishing, value addition is in
general much higher than their profit, as they have significant costs for personnel, equipment, etc. In
case of a raw material collector or crafts producer, who does neither employ any other persons nor
have any other significant costs in addition to his labor, raw material and other inputs, value addition
will reflect his income level.
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As presented in the previous section, bamboo and rattan products are widely diversified, resulting in a
relatively complicated value chain. Therefore, we only give one example (production of lamp shades, as
an example of a major product made in the target communes) to quantify the value addition of the
Lung bamboo (Bambusa longisima sp.) value chain. The example is typical because there are thousands
of households in Nghe An and Thanh Hoa provinces engaging in the Lung value chain. Figure 4
illustrates added values at different stages in the Lung value chain which is calculated in details in the
table 5 below:
Figure 4: Value addition in the Lung value chain in the North, Viet Nam
Source: Compilation by the authors, July 2010
Accordingly, the value added by each actor involved at the respective stage of the Lung value chain is
explained as following:
One lamp shade is sold by the provincial handicraft producer for VND 40,000. Total value
addition at this level is VND 8,400 (VND 40,000 minus the value of intermediate goods and
other inputs/operational services).
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The trader (focal point of trading and export-oriented companies) supplies the lamp shade for
VND 29,600 and gains the additional value of VND 2,100.
The household producer gets VND 27,000 per lamp shade. His costs for buying the raw
material per lamp shade are VND 5,750 (1 ton of raw material makes 400 lamp shades), in
addition he has to pay for other inputs (like electricity and drinking water) which cost VND
1,500. Total value addition at this level is VND 19,750 per lamp shade.
The provincial handicraft producer also takes on the function of a raw material trader as he
buys the raw material from the local trader to sell to household producers for VND
2,300,000/ton. For one lampshade (2.5 kg), this means VND 5,750. He charges VND 5,293 for
transport cost and material losses. Total value addition at this level is VND 457.
The local trader sells raw material to the provincial handicraft producers at VND 4,250 per
lamp shade (2.5 kg). He has to charge the total intermediate costs of VND 3,283 per product
unit (Costs of bought materials and cost of material losses). The value addition at this level is
VND 968.
The harvester gets VND 1,300,000/ton of Lung bamboo. For 2.5 kg, this equals VND 3,250.
The producers of semi-finished goods (farmer groups) deploy 300 labor days (at the average
productivity) in order to produce 400 lamp shades; thus one labor day of a weaver creates VND 26,300
of added value. The harvesters of raw material spend 50 labor days to collect 1 ton of material, thus
one man day of a harvester is VND 26,000 of added value.
Table 5: Calculation of value addition for each actor of the Lung value chain
Actors
Price of output item Intermediate cost Added value
Note Per ton of
raw
material
Per
lamp
shade
Per ton of
raw
material
Per
lamp
shade
Per ton of
raw
material
Per
lamp
shade
Harvesters
of
materials
1,300,000 3,250 0 0 1,300,000 3,250 Labor cost is not included.
Traders of
Materials 1,700,000 4,250 1,313,000 3,283 387,000 968
Local traders buy material
from farmers and sell to
SMEs. Intermediate cost
includes 1% material loss.
Provincial
handicraft
producers/
exporters9
2,300,000 5,750 2,117,000 5,293 183,000 457
Intermediate costs include
1% material loss and
transport cost of VND
400,000 per ton.
Producers
of semi-
products
(group of
farmers)
10,800,000 27,000 2,900,000 7,250 7,900,000 19,750
With one ton of input
weavers produce 400 lamp
shades; intermediate cost
is about VND 1,500 per
product, for electricity and
drinking water.
Traders of 11,840,000 29,600 11,000,000 27,500 840,000 2,100 Traders’ commission is 5%
9 The company like Duc Phong transports materials and then sells to weavers
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Actors
Price of output item Intermediate cost Added value
Note Per ton of
raw
material
Per
lamp
shade
Per ton of
raw
material
Per
lamp
shade
Per ton of
raw
material
Per
lamp
shade
semi-
products
of the value of the final
product, Electricity cost is
VND 200,000 lump sum
Provincial
handicraft
producers/
exporters
16,000,000 40,000 12,640,000 31,600 3,360,000 8,400
Intermediate cost is VND
2,000 per product to
finalize the product.
Source: Compilation by the authors, July 2010
III.4 Constraints Analysis
The constraints found at micro level of the rattan and bamboo value chain in the 4 JP provinces are
summarised in the figure 5 bellow, including the critical constraints at all stages of the value chain.
Figure 5: Critical constraints of the Rattan and Bamboo value chain at micro level
Source: Compilation by the authors, July 2010
III.4.1 Input Supply Constraints There are many constraints at input supply level in the four target provinces, including but not limited
to the following issues:
Shortage of raw material: the natural bamboo and rattan source is getting scarcer and scarcer.
Although the master plan for bamboo and rattan plantation has just been formulated recently,
it has not yet been sufficiently considered in some localities. In general, the implementation of
raw material planning for the bamboo and rattan sub-sector has progressed slowly and is still
limited to a demonstration model, e.g. the Calamus tretradactymus Hance (may nep)
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Uncomfortable working place
plantation model which is being implemented in Yen Tap commune, Cam Khe district, Phu Tho,
and other models existing in Nhu Thanh commune, Nong Cong, Thanh Hoa. On the one hand,
the slow progress of the bamboo and rattan raw material development plan causes a lot of
trouble for production and export enterprises, discouraging them to take investment decisions,
notably those aiming at larger production scale. On the other hand, people at present fiercely
compete over the purchase of raw material, thereby overexploiting of natural resources, which
leads to a depletion of the bamboo and rattan supply.
Lack of cooperation and coalition amongst SMEs and local people on the issues of harvesting,
protection and development of raw material supply. Currently, SMEs focus on issues such as
marketing, pooling of capital sources, labor training, building of important infrastructure, etc.
Therefore, only few investments are made into the sustainable development of raw material
supply. While the majority of SMEs have set up a concept for their company’s input sources,
they are hesitant to pursue any cooperation contract that enables them to develop a
sustainable supply of raw material. Meanwhile, local people are occupied with sustaining their
daily livelihoods; thus, considered their lack of market information, and in the absence of
investments and contract farming agreements, they cannot be expected to adopt sustainable
farming practices on their own.
Local farmers lack the knowledge and skills that enable them to protect the rattan forest and
to sustainably harvest natural bamboo. They are also short of technical knowledge enabling
them to plant, nurture and preserve bamboo and rattan material.
Technical support teams at commune and district level have not been adequately trained to
perform the role of trainers on rattan plantation and processing for local farmers.
Local people, particularly technical staff and farmers have not been able to visit successful
rattan plantation models. Learning about successful experience will build up their confidence
to experiment cultivating rattan on their own land.
Investing into plantation of bamboo and rattan
requires rather long periods before yields can be
expected, and is a kind of capital-intensive
farming. It should be stressed that not all poor
households can venture into bamboo or rattan
farming at specialist level. Cultivating bamboo and
rattan should not be difficult for them as long as
they do it on scattered plantations in their home-
gardens; however, at a higher scale, most poor
farmers are most likely to be short of capital.
III.4.2 Market Access Constraints
Even the larger export companies lack market knowledge and highly depend on very few clients only.
Being dependent on often only one buyer (IKEA) puts the whole industry at risk. To avoid this risk,
diversification of export contacts is needed for the industry to broaden their customer base.
Companies are aware of this threat, but so far do not invest pro-actively in international marketing
activities.
Handicraft producers and exporters lack experience, promotion material, language skills and trained
marketing managers, who are able to develop new international marketing channels.
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A tool for drying rattan material
Bamboo spitting with simple tool
An oven for drying rattan
III.4.3 Technology and Product Development Constraints
Being a crafted product, the quality of bamboo and rattan ware
largely depends on workers’ skills. Harvesting, processing of raw
material and processing of semi-products are mainly made by
hand, using simple tools such as a knife and a bush-hook. At
present, in many localities, many farmers harvest raw material at
the same time, not respecting any compliance with guidelines of
sustainable management and protection of natural resources.
Moreover, the unqualified harvesting and conservation
procedures applied by the farmers result in low quality supply and
a waste of raw material.
Raw material processing workshops run by local traders at
community level deploy a traditional technology, most of which is
not equipped with a separated drying oven. Farmers only
exchange their knowledge on the processing skills among
themselves, still using chemical drying techniques.
The production of crafts for export is often carried out at the
farmers’ houses, instead of on the premises of enterprises. In
many areas, workers still consider the production of
bamboo/rattan products as an additional source of income, which
they generate in addition to their traditional agricultural
operations, because they regard crafts production alone too
insecure for income generation. Given this fact, a large part of the
workforce in the sector does not specialize on crafts production.
Another challenge derives from the constant changes in product
designs that forces enterprises to provide complementary training
to workers, yet often under time pressure. Production equipments
and tools are very simple and workers do most of the work manually. In the end, productivity is low.
Although some enterprises have been trying to apply machinery in material processing (like a splitting
machine for rattan and bamboo) in order to enhance their productivity, their progress is still moderate.
Many SMEs have not yet taken the initiative to experiment with new designs and to develop new
products due to limited capacities in terms of market access to foreign markets. Other causes are lack
of investment into marketing and design personnel while consultancy services have not been
developed in Viet Nam with few enterprises offering this kind of consulting service.
Also, many SMEs do not know appropriate techniques and equipment which can help to increase their
productivity.
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III.4.4 Organization and Management Constraints
Small enterprises operate at local level; particularly cooperatives are weak at management and
organization. Except a few enterprises, which have a small management team such as Duc Phong and
Duong Phu Cat enterprises, the majority of them only have one or two persons, who are responsible
for all kinds of duties with regard to marketing, logistics, training of workers, input supply
procurement, production supervision or even accounting, etc.
Accountability and ownership are often critical problems in cooperatives, which negatively influence
the performance and decision making of the management boards.
III.4.5 Services Constraints
Business support services have not yet met the requirements that are needed for an effective
development of the bamboo and rattan sub-sector. Figure 6 below summarizes the most critical
constraints at the meso level of the value chain. Though there are, at present, many expressed needs
for farmed rattan, necessary input supply services such as techniques and seedlings are inaccessible for
most farmers. There are only few technical organizations providing support to local farmers in rattan
demonstration models; specifically the Viet Nam Rattan Network, the Forestry University of Viet Nam,
the Viet Nam Forestry Science Institute and several small enterprises. In most provinces, there is no
technical support service available for the development of rattan plantations.
Figure 6: Critical constraints of the Rattan and Bamboo value chain at meso level
Source: Compilation by the authors, July 2010
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Small enterprises and cooperatives operating in the concerned provinces need product design,
advertising and marketing services, but as they cannot access relevant services, they are prevented
from obtaining the necessary information and skills
Many enterprises are now in a bottleneck situation in areas such as human resource management,
marketing and business development strategy. These types of business consulting services and
particularly soft skill training are very limited at local level.
III.4.6 Financial Constraints such as Access to Short- and Long-term Financing
The capital required by rural farmers to cultivate rattan is huge, which is a particular burden especially
for poor households. They can operate on scattered rattan plantations in and around their home
gardens, but when it comes to farming at a higher scale and with a higher level of specialization, most
poor households are likely to run capital shortages. Despite the fact that
various credit funds have been made available locally, the short time of
repayment limits farmers’ access to credit. As farmed rattan has a rather
long investment lifespan (3-4 years before yielding); the existing credit
programmes do not match farmer’s capital requirements.
As far as the handicraft enterprises are concerned, their need to obtain
both working capital and investment funds is typically high. They have to
pre-finance the raw material (even make advance payments to material
suppliers in extreme cases of raw material shortage) and pay the
weavers for their work, while the buyers (exporters) often defer
payment to enterprises.
III.5 Socio-economic Parameters (Gender, Work and Labour Standards)
It is estimated that more than 80% of workers in the bamboo and rattan value chain are women,
mainly working at the processing and craft production stages. Men are mainly active in bamboo and
rattan harvesting from natural forests.
As mentioned earlier, bamboo and rattan production mainly is a sideline for farmers to generate
additional income within their households. Women do most of the crafting work in the families, being
supported by their husbands and children. Men often do the cleaving job, while women and children
take over the knitting and weaving parts. In some places, men also actively participate in weaving. In
general, household members become busier if they work on additional contracts with enterprises, in
addition to their regular agricultural activities. Women, in particular, are burdened with more work. At
SME and cooperative level, again, women are the major managers.
As mentioned above, workers are often sub-contracted by intermediaries such as communal agents.
Bamboo and rattan craft workers generally find themselves in a weak position.
At their current level of productivity, workers earn only 600,000VND-1,500,000VND per month; their
level of income varies depending on the level of payment as per product and skills of workers.
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III.6 Environmental Concerns
The simultaneous harvesting of bamboo and rattan by a large number of farmers at the same time
does not comply with international norms and standards for sustainable agricultural practices and
poses a great environmental burden on the region. These are critical problems that need to be solved.
The drying and conservation techniques of raw material applied by cooperatives and SMEs are not
environmental-friendly and pose a threat to the to the health of workers and craft producers, since the
drying using charcoal and sulphur is often carried out in extraordinarily ill-built tents.
III.7 Meso level Support Institutions and other Projects
Viet Nam’s bamboo and rattan craft industry is currently obtaining support from central and provincial
ministries and line departments.
The establishment of the Viet Nam Rattan Network, a member of the Global Rattan Network, with the
participation of all VC stakeholders, is a new benchmark for the sustainable development of the rattan
processing sub-sector in Viet Nam. To date, the network has attracted more than 200 members
involved in rattan plantation, processing and supply of services, seedlings, machinery, etc. The network
covers 24 provinces and cities with rattan distribution being made nationwide. Nghe An is among the
most proactive members of the network with participation of DARD and relevant enterprises.
Although a separate master plan for the long-term development of the provincial bamboo and rattan
sub-sector is not yet in place, all provinces have set up a rural profession development master plan.
On that basis, PPCs have issued relevant policies to support the bamboo and rattan sub-sector.
Following the Government circular and MARD guidelines, provincial authorities have built up
programmes for development and preservation of traditional professional villages for period 2010 to
2015 until 2020. These programmes, as such, target all types of rural professions, aiming at concerted
achievements of economic growth and the preservation of traditional cultural values as well as overall
development of rural areas. In the end, the implementation procedures are expected to be relatively
complicated, requiring the collaboration of different organizations and development
programmes/projects.
The DARD of each province is to advise PPC in steering of this programme, while the implementation is
delegated to the provincial rural development division. In Thanh Hoa alone, the programme
implementation is given to the Department of Commerce and Industry. Nevertheless, this is still a
challenging task, in terms of limited human resources and difficult implementation mechanisms.
Moreover, these state agencies have a limited capacity of service delivery. Although they have
collaborated with local authorities and enterprises to deliver technical trainings for farmers on weaving
and processing skills, the outcomes are still ambiguous. The support services mainly focus on technical
elements, lacking the post-training monitoring and supervision to identify needs for additional or
advanced training. Public services are negligent of market research to be able to support producers in
market access opportunities, product marketing and promotion.
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IV VALUE CHAIN UPGRADING STRATEGY
IV.1 Market Opportunities and Competitive Advantage
There is a large worldwide demand for bamboo and rattan ware products, but in all four target
provinces most enterprises interviewed have expressed many concerns that are related to the supply
of raw material. At present, all enterprises plan to expand to the export markets and to venture into
product diversification. The demand for raw rattan and bamboo is increasing in line with the demand
for finished products. This, in turn, can create market opportunities for existing raw material suppliers,
local harvesters as well as for farmers who fulfill the (investment) requirements for rattan plantation.
Though the Vietnamese bamboo and rattan value chain is still characterized by plenty of challenges
and weaknesses in terms of industry internal factors and quality, it has so far made a certain progress.
Remarkably, Viet Nam ranks No, 3 in the top list of bamboo and rattan exporters. Given the available
resources, inheritance of traditional experience and initial success, the Vietnamese bamboo and rattan
value chain can be able to reach even more impact.
Viet Nam has competitive advantages on the world market for bamboo and rattan products, but
interviews undertaken with basket ware importers have suggested that Viet Nam is still lagging behind
China price-wise as its biggest competitor. China still has a market share of 46% on the world market (s.
chapter 3) and produces large quantities of bamboo and rattan ware products, which are still cheaper
than those made in Viet Nam.
But labor costs and prices are on the rise in China, which constitutes a main market opportunity for its
competitors. Particularly Viet Nam, Indonesia and the Philippines have the potential to catch up with
China, raising world market shares, which are currently low at 3-5% each.
The major market opportunity for the four target provinces is seen in form of a combination of four
main competitiveness factors:
Rising labor costs in China and neighboring Vietnamese provinces (Ha Tay)
Increasing interest of international importers to look for alternative suppliers
Local raw material cultivation/harvesting
An improving local enterprise structure, enhanced professionalism and know-how.
Like China, Viet Nam also experiences an increase in labor costs in those regions where the
concentration of industrial companies is high. Vietnamese handicraft exporters address this constraint
by pursuing the strategy to relocate handicraft production to provinces with a more rural structure.
This is a trend from which the JP target communes benefit, as wage levels are low.
The main short-term market opportunity for the target provinces in the bamboo and rattan value chain
is to become more integrated in the IKEA supply network and other exporter networks. Particularly,
companies supplying IKEA are interested in developing production capacities for particular kinds of
IKEA lamp shades (double weaving) in the target provinces. An employment potential for several
thousand weavers has been confirmed several times by the IKEA suppliers. This provides immediate
income generation possibilities in the target communes in cooperation with provincial handicraft
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suppliers. Less-skilled weavers can be qualified to perform more demanding weaving work and
additional weaving jobs can be created for other persons. The provincial handicraft companies are as
well interested in co-investing in a sustainable rattan and bamboo cultivation in order to increase their
medium-term competitiveness.
A disadvantage is, at present, that the bamboo and rattan crafts production is currently focused on
very few different items, such as some forms of lamp shades and baskets. On the other hand, the local
companies are experienced in organizing large scale production of bamboo and rattan handicrafts
efficiently and reliably. This advantage can be used by the companies to diversify their product range
and their customer networks.
The medium-term market opportunity is to increase direct export of bamboo and rattan products from
the JP provinces. The provincial handicraft exporters need to further develop their collections and need
to intensify their marketing activities for final bamboo and rattan products.
IV.2 Vision
Taking into account its strengths and weaknesses in relation to interaction of the external
environment, the vision for the rattan and bamboo VC in the 4 JP provinces is suggested as follows:
“Competitiveness of the rattan and bamboo VC is increased through strengthened
capacities of relevant chain actors and based on more sustainable and competitive
bamboo and rattan supply”
Envisioning a competitive bamboo and rattan VC, the following upgrading solutions are suggested:
Raw bamboo and rattan material in localities are managed, exploited and developed in a
sustainable way.
Professional skills, labor productivity, income and working environment in the bamboo and
rattan handicraft value chain are improved for workers in a sustainable manner.
The export value of bamboo and rattan ware products in all JP targeted provinces is increased
based on well-developed marketing skills.
IV.3 Suggested Facilitation Activities
The vision and the upgrading objectives have been discussed with representatives of target communes
and related enterprises working in or with the target communes in Nghe An and Thanh Hoa.
The participants in the stakeholder meeting made some proposals for specific facilitation activities to
be undertaken at meso and micro level, which are already quite detailed. Even if these
recommendations still need to be reviewed and validated, they provide a good starting point for the
planning of programme interventions, as well as for further consideration in Phu Tho and Hoa Binh
provinces.
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The suggestions made by the participants related to the respective upgrading solutions were:
Upgrading solution 1: Raw bamboo and rattan material in localities are managed, exploited and developed in
a sustainable way
Location Benefi-
ciaries
Related
companies Activities
Nghe An Province
Province level: Supported by provincial authorities, foster increased dialogue and cooperation among farmers,
handicraft producers and companies to build a strong network with commitment and ownership from each
actor in a demand-supply relationship.
Chau
Thang
150 Duc Phong Zoning on 400 ha of Lung Bamboo belonging to 150
households in 5 villages
Plant new area of 30 ha of Lung bamboo
Support 5 km road construction
Select suitable households for handicraft making
30% contribution from Duc Phong and beneficiaries.
Nghia Hoi 100 Duc Phong Plant up to 100 ha of rattan (Calamus tetradactylus Hance) on
household land, thereof 60 ha concentrated plantation and 40
ha scattered plantation
Provide training on planting, care taking, harvesting
Establish producer groups or cooperative
Provide training on handicraft making
30% contribution from Duc Phong and beneficiaries.
Kim Thanh 140
(50)
Ngoc Canh Plant up to 25 ha of rattan (Calamus tetradactylus Hance),
thereof 10 ha in household garden and 15 ha in household
forest
Provide training on planting for 140 households
Provide rattan seedlings, fertilizer, care taking and protection
of planted areas
10% contribution from company, labor contribution from
households.
Quynh
Trang
150 Phuong Anh Plant up to 110 ha of rattan (Calamus tetradactylus Hance),
thereof 60 ha concentrated area, 30 ha scattered area, 20 ha
fence cultivation
Deliver training on planting, care taking, harvesting, processing
Provide support for land preparation
Provide seedlings (maize, peanut, cassava, green beans) for
intercropping
Provide management support for rattan plantation project
Support inner-village road construction (2 km)
Deliver training on handicraft making
Provide essential equipment for rattan processing
10% contribution from beneficiaries.
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Upgrading solution 1: Raw bamboo and rattan material in localities are managed, exploited and developed in
a sustainable way
Location Benefi-
ciaries
Related
companies Activities
Thanh Hoa Province
Province level: Supported by provincial authorities, foster increased dialogue and cooperation among farmers,
handicraft producers and companies to build a strong network with commitment and ownership from each
actor in a demand-supply relationship.
Hai Long 306 Nam Duong Plant up to 26 ha of rattan (Calamus tetradactylus Hance) in
household gardens (306 households in 9 villages) and newly
cultivate rattan on 5 ha concentrated area
Train farmers on planting, care taking, harvesting and primary
processing
Provide support in terms of seedling, fertilizer
Develop further plan for rattan plantation of 10 ha in addition
Provide training on rattan handicraft making for 900 selected
farmers
50% contribution from JP for seedlings and fertilizer, labor and
other costs come from beneficiaries.
Hoa Binh Province
Province level: Supported by provincial authorities, foster increased dialogue and cooperation among farmers,
handicraft producers and companies to build a strong network with commitment and ownership from each
actor in a demand-supply relationship.
Lien Son 302 Ngoc Son and
Doan Ket
Plant up to 100 ha of rattan (Calamus tetradactylus Hance) in
household gardens (302 households) and concentrated areas.
Train farmers on planting, care taking, harvesting and primary
processing
Provide support in terms of seedling, fertilizer.
(As the stakeholder meeting in Nghe An did not include related
actors from Hoa Binh Province, the JP PMU still needs to re-confirm
the suggested activities for Hoa Binh and verify contributions from
involved parties, especially from related enterprises).
Phu Tho Province
Province level: Supported by provincial authorities, foster increased dialogue and cooperation among farmers,
handicraft producers and companies to build a strong network with commitment and ownership from each
actor in a demand-supply relationship.
Yen Tap 313 Can Lieu
Cooperative
Plant up to 100 ha of rattan (Calamus tetradactylus Hance) in
household gardens (313 households) and concentrated areas.
Conduct training on planting, care taking, harvesting and
primary processing
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Upgrading solution 1: Raw bamboo and rattan material in localities are managed, exploited and developed in
a sustainable way
Location Benefi-
ciaries
Related
companies Activities
Provide support in terms of seedling, fertilizer.
(As the stakeholder meeting in Nghe An did not include related
actors from Phu Tho Province, the JP PMU still needs to re-confirm
the suggested activities for Phu Tho and verify contributions from
involved parties, especially from related enterprises).
Upgrading solution 2: Professional skills, labor productivity, income and working environment for workers in
the bamboo and rattan handicraft value chain are improved in a sustainable manner.
Location Benefi-
ciaries
Related
companies Activities
Nghe An
Chau
Thang
150 Duc Phong/
Dinh Trieu
Organize basic trainings
on making bamboo craft
products for 150 persons
Consider the possibility of
forming a group of
farmers and provide them
with processing
equipment.
Commune representatives
indicated:
Less-skilled weavers earn
currently 15,000 to 20,000
VND/day
Skilled weavers can make 4
lamp shades per day and
earn about 60,000 VND
People do farm work on
average 4 months per year
and handicraft production 8
months.
Suggested impact calculation:
Beneficiaries can double
their income.
Quynh
Thach
180 Phuong Anh Organize advanced
trainings for 140 persons
Organize basic trainings
for 40 newcomers
Provide splitting machines
needed
Storage facilities needed.
Dien Van 150 Duc Phong Organize advanced
trainings for 90 weavers
Organize basic trainings
for 60 newcomers
Provide splitting machines
to increase productivity
Organize field trip to other
communes.
Lang
Thanh
Ngoc Dau Organize 3 months basic
trainings for 120 persons.
Thanh Hoa
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Upgrading solution 2: Professional skills, labor productivity, income and working environment for workers in
the bamboo and rattan handicraft value chain are improved in a sustainable manner.
Location Benefi-
ciaries
Related
companies Activities
Thanh
Binh
200 Quoc Dai Organize advanced training
(5-6 classes, 1.5 months
each)
Assist establishment of
cooperative to increase
volume.
Tan Tho 199 Phong Chau Organize advanced training
for 49 persons
Organize 3 months basic
trainings for 150
newcomers
Equipment needed to
produce finished products
directly for Phong Chau
Storage needed.
Hoa Binh Province
Lien Son 275 Ngoc Son and
Doan Ket
275 beneficiaries participate in advanced training (enabling
them to make more complicated and fine art products), 3
months training needed
Polishing machines
Heating oven with advanced technology
Intensive training of 3 – 5 craft persons.
(As the stakeholder meeting in Nghe An did not include related
actors from Hoa Binh Province, the JP PMU still needs to re-confirm
the suggested activities for Hoa Binh and verify contributions from
involved parties, especially from related enterprises).
Phu Tho Province
Yen Tap 187 Can Lieu
Cooperative
187 beneficiaries for advanced training (for making more
complicated and fine art products), 3 months training needed
Investment on producing workshop: weaving sites, workshop,
store house and facilities needed
Heating oven and washing pool with advanced technology
Sewing machines
Support on trade fair organization, marketing.
(As the stakeholder meeting in Nghe An did not include related
actors from Phu Tho Province, the JP PMU still needs to re-confirm
the suggested activities for Phu Tho and verify contributions from
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Upgrading solution 2: Professional skills, labor productivity, income and working environment for workers in
the bamboo and rattan handicraft value chain are improved in a sustainable manner.
Location Benefi-
ciaries
Related
companies Activities
involved parties, especially from related enterprises).
Additional remark: Representatives of target communes with main emphasis on training activities for
handicraft weavers expressed interest as well in further raw material plantation activities.
Upgrading solution 3: Export value of bamboo and rattan ware products in all JP targeted provinces is
increased based on well-developed understanding and expertise of markets, marketing, design and market
requirements.
Location Benef. Related parties Activities
Targeted
SMEs,
cooperativ
es in the
JP
provinces
Competent
services providers,
credit institutions
and other financial
sources
Provide EMPRETEC training improved entrepreneurial
skills;
Collaborate with service providers to organize advanced
trainings on identified subject matters of business
development skills;
Provide information about the preferences and
requirements of the potential markets for handicraft
making companies.
Invite foreign designers to develop new product ranges
for bamboo and rattan companies.
Build the in-house design capacity of the handicraft
enterprises so that the range of products become more
diversified and competitive in the target markets;
Build capacities on environmental and labour standards
and working conditions;
Provide post-training advisory support to SMEs, ensuring
SMEs to successfully apply trained knowledge and skills
in their business activities
Bridge SMEs to locally-available credit channels for the
investment capital into business development.
Hanoi,
overseas
and 4
provinces
VIET-
CRAFT,
targeted
SMEs,
coopera-
tives in
the JP
provinces
VIETCRAFT, related
host parties of
trade fair, study
tour, IT service
provider
Organize study tours for JP handicraft enterprises to
successful enterprises in Viet Nam and in overseas
countries (China and Philippines)
Organize trade fair participations of handicraft exporters
at domestic and international trade fairs
Set up sub-sector market information and database at
VIETCRAFT
Set up computer-based network between VIETCRAFT and
its member enterprises for sharing and updating industry
information (begin with enterprises in target provinces).
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V RECOMMENDATIONS
Since most of the work is foreseen to take place at the commune level with a large number of
beneficiary households, the JP should assist the JP provincial focal points in setting up the JP commune
committee in each commune, besides close cooperation with the identified companies. It is
recommended to include 3 responsible persons in the committee (a chairman or a vice chairman of
CPC, 01 representative of WU and 01 representative of FU). Since these persons are not familiar with
project management, the JP should provide them with a practical training on project management as
soon as the committee has formed.
Particularly regarding sustainable raw material production and training of craftsmen, the
recommendations derived from the stakeholder workshop in Nghe An are quite advanced and the JP
should quickly discuss further with the companies, develop an action plan and start implementing
activities soon. Priority should be immediately given to ethnic minority people in Chau Thang
commune, where the scare source of Lung is being poorly managed and harvested. The upgrading
solution 1 “Raw material development …” is affected by seasonal factors and the JP should prepare for
using the next suitable planting season (February-April 2011).
There is a large number of households interested in and registered for rattan plantation. However,
there should be a significant contribution from the participating households to ensure the
effectiveness of the joint investment.
It is recommended to adopt the CB-TREE approach which has been applied in the ILO sub-project in
Hatinh in order to design training curricula for the JP target groups. CB-TREE can strengthen the
capacity of the target groups in market oriented technical and business skills remarkably and develop
confidence in building business skills.
It is a recommended to re-confirm and address the real interest and commitment of registered
households to venture into rattan plantation by offering them business start-up trainings at the early
stages of the JP project. In this respect, the SIYB and KAB training material developed by ILO can be
drawn upon for this purpose. By participating in the training, trainees are getting more motivated and
confident toward implementing their own business plans for rattan plantation.
The FFS methodology can be suited to conduct training on rattan plantation methods and on the
sustainable use and management of Lung bamboo. It is recommended that the FFS be complemented
and integrated into existing commune learning centers.10
There are a number of good practices and successful demonstration plots of rattan plantation which
are being applied in the JP targeted communes (Yen Tap, Phu Tho province and Lien Son, Hoa Binh
Province). These should be evaluated by the JP and documented as “lessons learnt” for upgrading and
later application.
Understanding the situation of the local communities is very important. The baseline data on the socio-
economic structure in the targeted communes should be made available as soon as possible. It helps
10
Many communes have established the commune learning center with essential facilities provided.
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project designers to draft intervention activities in a way which addresses actual needs of the
communities more appropriately.
Enterprises and cooperatives play very important roles in the VC. They are the driving force of VC
upgrading. Due to their limited capacities, the JP should pay attention in qualifying them in many
aspects like market segmentation, targeting and positioning, organizational management, marketing
etc.
The JP result framework is already well developed and comprehensive. It covers all intervention areas
proposed in this study. The five UN agencies should review the document and divide works among
them.
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VI APPENDICES
Appendix 1: Major bamboo rattan, sea grass, carpet and lacquer ware export markets of Viet Nam in 2008
Market Export value (USD) Market Export value (USD)
Argentina 824.782 Italia 9.140.859
Ireland Republic 784.795 Latvia 650.779
India 1.774.345 Malaysia 1.254.793
UK 7.217.452 Norway 294.213
Austria 1.048.427 South Africa 691.351
Poland 5.055.921 New Zealand 786.996
Belgium 6.531.063 Russia Federal 4.624.370
Portuguese 1.020.675 Japan 31.157.018
Brazil 1.742.717 Australia 6.007.055
United Arab Eremites 47.708 Finland 917.577
Cambodia 242.583 France 12.828.232
Canada 3.211.696 Czech Republic 900.388
Taiwan 10.377.733 Singapore 901.161
Denmark 2.695.676 Slovenia 216.545
Germany 37.033.081 Spain 10.788.806
Estonia 217.694 Thailand 600.619
Netherland 7.657.752 Turkey 1.166.816
Korea 5.769.681 Swede 3.234.707
US 32.331.654 Switzerland 1.228.173
Hong Kong 673.572 China 1.217.948
Hungary 846.634 Ukraine 492.305
Egypt 868.874
Source: HRPC, July 2009
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Appendix 2: Raw rattan material import to Viet Nam in period 2004-2007
Year 2004 Year 2005
Partner Trade Value Net Weight (kg) Partner Trade Value Net Weight (kg)
World $1,343,345 613,491 World $1,666,942 761,274
Lao People's Dem.
Rep. $602,359 275,091 Philippines $796,888 363,930
Philippines $535,107 244,377 Lao People's
Dem. Rep. $750,734 342,852
Indonesia $131,907 60,240 Singapore $119,320 54,492
Singapore $69,228 31,616
Japan $2,440 1,114
France $2,304 1,052
Year 2006 Year 2007
Partner Trade Value Net Weight (kg) Partner Trade Value Net Weight (kg)
World $1,429,420 652,800 World $646,075 295,093
Philippines $669,662 305,827 Indonesia $359,727 164,304
Indonesia $313,863 143,338 Philippines $176,186 80,472
Lao People's Dem.
Rep. $282,750 129,129
Lao People's
Dem. Rep. $82,850 37,841
Cambodia $93,887 42,877 Cambodia $23,712 10,830
Singapore $35,290 16,117 Other Asia $3,600 1,644
Malaysia $31,368 14,325
China $2,600 1,187
Year 2008
Partner Trade Value Net Weight (kg)
World $34,612 14,164
Indonesia $30,612 12,527
Lao People's Dem.
Rep. $4,000 1,637
Source: UN-COMTRADE 2008
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Appendix 3: Area of bamboo by 3 types of forests in the four JP provinces
Province Code Start Change Ending
Specia-
lized
forest
Defense
forest
Pro-
duction
forest
NTFP
Hoa Binh
Total
1120 8,627 -866 7,761 5,814 232 1,693 21
Dendrocalam
us membra-
neceus
munro
1121 69 3 72 27 12 33
Neohouzeau
a dulloa 1122 7,900 -880 7,020 5,323 204 1,472 21
Arundinaria 1123 440 11 451 260 14 177
Bambusa
procera 1124
Other types
of bamboo 1125 218 -1 217 205 1 11
Nghe An
Total 1120 80,718 -1,029 79,689 16,658 9,909 53,122
Dendrocalam
us membra-
naceus
munro
1121 97 97 97
Neohouzeau
a dulloa 1122 74,239 -816 73,423 14,826 8,479 50,117
Arundinaria 1123
Bambusa
procera 1124
Other types
of bamboo 1125 6,383 -214 6,169 1,831 1,430 2,908
Thanh Hoa
Total 1120 91,161 91,161 29,055 10,552 51,546 9
1121
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Province Code Start Change Ending
Specia-
lized
forest
Defense
forest
Pro-
duction
forest
NTFP
Dendrocalam
us membra-
naceus
munro
Neohouzeau
a dulloa 1122 62,532 62,532 17,542 8,845 36,144
Arundinaria 1123 4,142 4,142 364 3,770 9
Bambusa
procera 1124
Phu Tho 19,292.5
Source: http://sites.google.com/site/buimanhhungvfu/thong-ke-dien-tich-cac-loai-rung
Phu Tho statistics: http://www.baophutho.org.vn/baophutho/vn/website/kinh-te/2010/10/12746A2D71F/
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Appendix 4: List of PPC-recognized bamboo and rattan handicraft villages in Nghe An Province
No. Name of village VT Sector/Sub-
sector
Year of
reorganization
Number of
workers
1 Xuan Tinh handicraft village,
Dien Loc commune, Dien Chau DC
Bamboo and
rattan craft ,, 470
2 Truong Thanh knitting village,
Dien Truong, Dien Chau DC
Bamboo and
rattan craft 2009
3
Quyet Thang handicraft
village, Dien Truong, Dien
Chau
DC
Bamboo and
rattan craft ,, 318
4 Van Nam handicraft village,
Dien Van, Dien Chau DC
Bamboo and
rattan craft ,, 275
Dien Chau Total 1063
5 Da Lam knitting village, Da
Son, Do Luong DL Wattle ,, 193
Do Luong Total 193
6 Do Nha village, Hung Nhan,
Hung Nguyen HN
Bamboo mat
knitting 2004 175
Hung Nguyen Total 175
7 Thai Hoc village, Nghi Thai,
Nghi Loc NL
Bamboo and
rattan craft ,, 305
8 Lam Hong village, Phuc Tho,
Nghi Loc NL
Bamboo and
rattan craft ,, 154
9 Thai Binh village, Nghi Thai,
Nghi Loc NL
Bamboo and
rattan craft ,, 165
10 Thai Cat village, Nghi Thai,
Nghi Loc NL
Bamboo and
rattan craft ,,
11 Thai Hung village, Nghi Thai,
Nghi Loc NL
Bamboo and
rattan craft ,, 110
12 Thai Quang village, Nghi Thai,
Nghi Loc NL
Bamboo and
rattan craft ,,
13 Phong Dien village, Nghi
Phong, Nghi Loc NL
Bamboo and
rattan craft ,, 157
14 Phong Anh village, Nghi
Phong, Nghi Loc NL
Bamboo and
rattan craft ,, 130
15 Phong Canh village, Nghi
Phong, Nghi Loc NL
Bamboo and
rattan craft ,, 116
16 Thai Hoa village, Nghi Thai,
Nghi Loc NL
Bamboo and
rattan craft ,, 178
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No. Name of village VT Sector/Sub-
sector
Year of
reorganization
Number of
workers
17
Thai Loc village, Nghi Thai,
Nghi Loc
NL
Bamboo and
rattan craft ,, 316
18 Thai Phuc village, Nghi Thai,
Nghi Loc NL
Bamboo and
rattan craft ,, 182
19 Thai Son village, Nghi Thai,
Nghi Loc NL
Bamboo and
rattan craft 2003 188
20 Thái Thọ village, Nghi Thai,
Nghi Loc NL
Bamboo and
rattan craft ,, 199
Nghi Loc Total 2200
21 4A village, Ngoc Son, Quynh Luu
QL Bamboo and rattan craft ..
22 Village 3 Trung Hau, Quynh Giang, Quynh Luu
QL Bamboo and rattan craft ..
23 Quynh Vien village, Quynh Thach, Quynh Luu
QL Bamboo and rattan craft ..
24 Dong Luyen village, Quynh Giang, Quynh Luu
QL Bamboo and rattan craft ,, 235
25 But Ngoc village, An Hoa, Quynh Luu
QL Bamboo and rattan craft ,, 160
26 Son My village, Quynh My, Quynh Luu
QL Bamboo and rattan craft ,,
27 Tung Son village, Quynh Thach, Quynh Luu
QL Bamboo and rattan craft ,, 193
28 Truc Vong village, Quynh Thach, Quynh Luu
QL Bamboo and rattan craft 2007 198
29 Phu Lien village, Quynh Long, Quynh Luu
QL Bamboo and rattan craft
2006 352
30 Phu Thinh village, Quynh Thach, Quynh Luu
QL Bamboo and rattan craft ,, 233
31 Minh Thanh village, Quynh
Long, Quynh Luu QL
Bamboo and
rattan craft 2005 319
Quynh Luu Total 1690
32 Ke Cuoi village, Tho Thanh, Yen Thanh
YT Bamboo and rattan craft
,, 672
33 Bac Vuc village, Do Thanh, Yen Thanh
YT Bamboo and rattan craft
..
34 Lien Son village, Lien Thanh, Yen Thanh
YT Bamboo and rattan craft …
35 Thanh Son village, Phu Thanh, Yen Thanh
YT Bamboo and rattan craft ..
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No. Name of village VT Sector/Sub-
sector
Year of
reorganization
Number of
workers
36 Dong Phu village, Khanh Thanh, Yen Thanh
YT Bamboo and rattan craft 2008
37 Yen Hoi village, Do Thanh, Yen Thanh
YT Bamboo and rattan craft ,, 307
Yen Thanh Total 979
Total 6300
Source: Compilation from Provincial Agriculture Development Division of Nghe An, January 2010
Appendix 5: List of bamboo rattan handicraft trade villages in Phu Tho
Name of village Number of Workers Turnovers (mio VND)
2004 2005 2006 2004 2005 2006
Ngô Xá 2,308 2,308 2,308 17,993 22,333 22,333
Tùng Khê 825 850 865 4,815 4,978 5,005
Đỗ Xuyên 3,000 3,100 3,300 12.900 13,000 13,800
Minh Hòa 130 136 145 864.0 993.6 1,142.6
Ba Đông 700 900 1,200 7,574.8 12,089.5 15,438
Total 8,967 9,299 9,824 33,263.7 55,399.1 59,724.6
Source: Provincial Programme for conservation and development of craft villages – period 2010 – 2015 and vision to 2020