value chain study for bamboo and rattan in · pdf filecombines the core competencies of the...

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.

Value Chain Study for Bamboo/Rattan in Phu Tho, Hoa Binh, Thanh Hoa and Nghe An, Viet Nam

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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].

mailto:[email protected]

mailto:[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

http://vietcraft.org.vn/tin-tuc/tinh-hinh-xuat-khau-cua-hang-thu-cong-my-nghe-viet-nam

http://www.vneconomy.vn/

http://www.kinhtenongthon.com.vn/


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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.


P a g e | 16

Province/

Commune

Raw material

supply

Raw material


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


P a g e | 17

Province/

Commune

Raw material

supply

Raw material


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


P a g e | 18

Province/

Commune

Raw material

supply

Raw material


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.).


P a g e | 19

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


P a g e | 20

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


P a g e | 21

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


P a g e | 22

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


P a g e | 23

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.


P a g e | 24

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


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).


P a g e | 25

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


P a g e | 26

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.


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


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)


P a g e | 27

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.


P a g e | 28

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.


P a g e | 29

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



P a g e | 30

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.


P a g e | 31

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.


P a g e | 32

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


P a g e | 33

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.


P a g e | 34

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.


P a g e | 35


a sustainable way

Location Benefi-

ciaries

Related


Thanh Hoa Province




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




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




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


P a g e | 36


a sustainable way

Location Benefi-

ciaries

Related


Provide support in terms of seedling, fertilizer.


actors from Phu Tho Province, the JP PMU still needs to re-confirm

the suggested activities for Phu Tho and verify contributions from


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


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


for 40 newcomers

Provide splitting machines

needed

Storage facilities needed.

Dien Van 150 Duc Phong Organize advanced

trainings for 90 weavers


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


P a g e | 37



Location Benefi-

ciaries

Related


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.


actors from Hoa Binh Province, the JP PMU still needs to re-confirm

the suggested activities for Hoa Binh and verify contributions from


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.


actors from Phu Tho Province, the JP PMU still needs to re-confirm

the suggested activities for Phu Tho and verify contributions from


P a g e | 38



Location Benefi-

ciaries

Related



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).


P a g e | 39

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.


P a g e | 40

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.


P a g e | 41

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


P a g e | 42

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


P a g e | 43

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


P a g e | 44

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/


P a g e | 45

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


P a g e | 46


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


23 Quynh Vien village, Quynh Thach, Quynh Luu


24 Dong Luyen village, Quynh Giang, Quynh Luu

QL Bamboo and rattan craft ,, 235

25 But Ngoc village, An Hoa, Quynh Luu


26 Son My village, Quynh My, Quynh Luu

QL Bamboo and rattan craft ,,

27 Tung Son village, Quynh Thach, Quynh Luu


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


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 ..


P a g e | 47


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

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