German Rubber Firms Want to Expand Cooperation in Vietnam

At a rubber processing facility in Vietnam. Photo: VNA

A series of exchanges and events to boost linkages and collaboration between Vietnamese and German rubber producers have been held in Germany from April 20-27, VNA reported Saturday.

At a trade promotion event on April 21, which saw representatives from the Vietnamese Embassy in Germany, the Vietnam Trade Office, and many German rubber businesses, Ambassador Vu Quang Minh highlighted the fruitful relations between the two countries in all fields, especially after more than 10 years of successful Vietnam- Germany strategic partnership.

Currently, Germany is Vietnam's largest trading partner in the European Union (EU), while Vietnam is Germany's largest trading partner in Southeast Asia.

He appreciated the dynamism of Vietnamese enterprises and affirmed the increasingly strong competitiveness of Vietnamese goods, especially after the EU-Vietnam Free Trade Agreement (EVFTA) became effective in 2020.

Phan Tran Hong Van, Deputy General Secretary of the Vietnam Rubber Association, said that Vietnam's rubber plantation area is currently 929, 500 hectares, accounting for 7.2% of the world’s total rubber area. Vietnam is currently the third largest rubber exporter in the world, making up 17.4% of the total global rubber trade.

Rubber is a very important industry in Germany, providing products for the automotive, mechanical, and construction industries, she said, noting Germany's high demand for importing natural rubber and rubber products.

According to statistics from the International Trade Center, in 2021, Vietnam was the fourth largest supplier of natural rubber to Germany, with 40,580 tonnes, worth USD 84.25 million.

At the event, Vietnamese and German businesses discussed measures to boost collaboration in the future.

Tobias Boysen, Sales Director of Weber & Schaer GmbH & Co.KG - a major German distributor of natural rubber and rubber products, appreciated the quality of Vietnam's rubber products. He said his group will increase imports of natural rubber, latex rubber, and other products from the Southeast Asian country.

Martin Sülzle, head of the Import Department of Blickle Räder & Rollen Group - a distributor of wheels of all kinds, with branches in 120 countries around the world, said that his company has demand for importing rubber products from Vietnam and plans to cooperate with Vietnam in this field.

The Vietnamese delegation also visited a tire factory of Germany's Continental AG - the world’s fourth largest tire manufacturer as well as the headquarters of Weber & Schaer and Corrie Maccoll to learn more about product needs and market trends for Vietnam's rubber export.

The rubber industry needs a better grip on competitiveness in int’l market. Photo: VNA

As the Covid-19 pandemic recedes, Vietnam's rubber industry faces challenges from both the world market and internal factors that hinder the industry’s competitiveness. Finicky global markets are extremely competitive and well down the road of development, meaning Vietnam needs to catch up to keep pace.

Tran Ngoc Thuan, chairman of the Vietnam Rubber Association (VRA), said the competition between natural rubber-producing and exporting countries will become more intense in terms of price, product quality, commercial reputation, and the ability to meet increasingly stringent sustainability standards on demanding markets.

On the other hand, the structure and types of natural rubber in Vietnam still heavily rely on the Chinese market and only partially meet the needs of other, more finicky markets. This makes it difficult for market penetration in major markets such as the US, and Japan, among others.

In addition, a disjointed national management system and policy mechanisms such as tax declaration, value-added tax, and high-income taxation has caused difficulties for industry and business growth.

Meanwhile, according to free trade agreements, natural rubber imported into Vietnam currently enjoys a tax rate of 0%, which will encourage businesses to prioritize choosing import markets from Thailand, Malaysia, and Indonesia. This will create competitive pressure on domestic rubber businesses.

The rubber product processing industry still faces difficulties in competing with imported products. There is still a lack of technical barriers in trade to prevent poor-quality goods from being imported from other countries, causing losses to consumers and unfair competition with domestic goods.

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