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Analysis on the Development Prospects of Vietnames

Time:2018-01-08 Source:International Silk Union Secre

 

1. Participate in Bao Loc Tea-Silk Culture Week

 

 

December 23rd-28th, 2017, invited by the People's Committee of Bao Loc City and Vietnam Sericulture Association, the member units of International Silk Union (ISU) included Guangdong Silk-Tex, Guangxi Huahong, Hangzhou Meijiabiao, Hangzhou Textile Machinery, Hangzhou Fuqiang, Tongxiang Heshan Weiye and Hangzhou Hualong, Hangzhou Newjiexiu, Hangzhou Jixiang, Huzhou Baby Sericulture, Zhejiang Huazhi totally more than 11 enterprises had a close observation to understand Vietnamese silk industry. The delegation attended the 7th Da Lat Flower Festival Tea-Silk Culture Week series of activities. The sponsor warmly and thoughtfully arranged the delegation to watch the fashion show, visit the scenic spots, visit the tea garden, mulberry and economic and trade exhibition of silk, tea, coffee and woodenware, hold a symposium with government of Bao Loc City and representatives of silk enterprises, participate in Tea-Silk Culture Week opening ceremony, visit silk enterprises, and participate in international conferences and so on. At the international conference, the government of Bao Loc City witnessed that a memorandum of cooperation was signed between the International Silk Union and Vietnam Sericulture Association. The secretary-general of ISU proposed the suggestion on how to deal with the difficulties faced by the silk industry in Vietnam. The visit achieved expected results.

 

2. Vietnamese Silk Situation

 

 

This visit has given us a better understanding of Vietnamese silk industry. According to introduction, Vietnam currently produces 1,000 tons of silk per year, exports to India, Pakistan, Thailand, Cambodia, Japan and Italy. Bao Loc City is the main silk producing area of Vietnam, accounting for about 70% of Vietnamese silk output value, while Bao Loc City’s largest silk company Viseri accounted for 60% of Bao Loc Citys silk output value. Vietnam Sericulture Association is located in Bao Loc City, vice president of Viseri is also the president of Vietnam Sericultur Association, and Viseri, the sponsor of this year's Tea-Silk Culture Week opening ceremony and international conference, all this showed the special status of Bao Loc City and Viseri in Vietnamese silk industry .

 

Vietnamese silk industry mainly exports raw silk, twisted silk and kimono silk. Japanese largest silk company Matsumura Co., Ltd. has ten cooperative enterprises in Bao Loc City. We visited two silk enterprises, the automatic reeling machine was made in Italy in the 1970s, and the twister and loom were made in Japan, the equipment is old but still in operation due to good maintenance. The twisting silk and kimono silk are exported to Japan and Italy. In Da Lat, there are 4 new automatic reeling machines made by Hangzhou Hualong Weaving Machine Co., Ltd. which increase the production efficiency after put into use in 2017, they also stir the Vietnamese cocoon price, result in the tight cocoon in Vietnam, and soar the price of silk yarn to 455,000 yuan/ ton.

 

Bao Loc City is located in central south of Vietnam, latitude 10 degrees, about 800 meters above sea level, the terrain is mostly hills, adequate lighting, climatic conditions are very suitable for mulberry, uninterrupted sericulture throughout the year. Bao Loc Citys main crops are tea, coffee and silkworm. Probablely due to the large labor investment in mulberry sericulture, input-output ratio is not high, we did not see the large mulberry, perhaps when the cocoon price and silk price rose sharply, mulberry fields will be a substantial increase in area.

 

On the evening of the 24th, December, 2017, we observed the fashion show of local silk and garment enterprises. The costumes were basically the Ao Dai of the Vietnamese national style, these were similar, less changed and lacked of fashion. However, at the opening ceremony on the evening of 25th, December, 2017, a large number of classic and exquisite Ao Dai demonstrated by Viseri represented the level of Vietnamese fashion design.

 

From the symposium of government and enterprises on the afternoon of 25th, December, 2017 and the international conference on the afternoon of 26th, December, 2017, we could see that the biggest problem currently plaguing the silk industry in Vietnam is the mulberry species and cocoon species. Cocoon species are now imported from China, high mortality on the way, though uniform size of cocoon, the cocoon layer is thin, silk length is about 700-800 meters. Mulberry species also lack of selection, and can not be as free as the Chinese government to issue unified mulberry seedlings, so expanding the area of mulberry field have been greatly restricted. Moreover, the mulberry and silkworm in Vietnam are still under extensive management, far less than the fine management of the sericulture in temperature and humidity in China.

 

3. The Development Space and Key Points of Vietnamese Silk

 

 

It can be said that there is huge room for development of Vietnamese silk. In addition to the suitable climatic conditions for mulberry and silkworm rearing, compared with other Southeast Asian countries, Vietnamese silk reeling equipment is also more advanced than those of Cambodia, Myanmar, Thailand and Laos. Coupled with Japanese companies in Vietnam for more than two decades, the production management orderly, product quality is relatively guaranteed. Observed from the Silk-Tea Culture Week, vice governor of Lam Dong Province and mayor of Bao Loc City delivered speeches at the opening ceremony and international conferences, and direct dialogues with representatives of silk enterprises, the government paid more attention on the silk industry .

 

The focus of Vietnamese silk development is that the government's attention should be transformed into the formulation of development plans and implementation plans. First, establish own cocoon planting station, nurturing cocoon species locally and completely changing the mode of importing and transporting from China. Second, establish the mulberry field by the government and unify the improvement to cultivate the mulberry seedlings for free to the silkworm farmers. If the government is difficult, it could also support by large companies like Viseri to establish. Third, guide capital to introduce new type reeling machines and looms, whether domestic-funded or foreign-funded, using capital to enhance labor productivity and product quality. One more, create a good market atmosphere and reduce administrative obstacles and disorderly competition.only in this way, can Vietnamese silk certainly achieve rapid growth.

 

4. The Feasibility of Foreign Investment in Vietnamese Silk

 

 

Due to the soaring prices of Chinese silk, many industry peers are beginning to pay attention to the feasibility of investing in Vietnam. There are some advices based on what we have seen and heard.

 

1. Although Vietnamese silk development has huge space, it is still prudent to invest in the silk industry due to different national conditions. This time the ISU delegation went in and out the custom from Nha Trang, and saw the behavior of Vietnamese border defense patrols asked for the toll, which has switched away from secrets to open and even rampant, investors are worried about such a social environment.

 

2. Vietnam currently has 38 sets of old and new automatic reeling machines and plans to add another 10 in 2018. Because the cocoon supply couldn’t keep up with the silk reeling productivity, Vietnam will inevitably repeat the drama of Chinese silk prices have risen because of soaring cocoon prices. Vietnamese silk price has risen to 70,000 dollars / ton, compared with China, the advantage to exports to India and other countries is just the import tariffs.

 

3. The Vietnamese government does not have the goal of attracting investment, and not like the Chinese government which has most resources and favorable push forward. Therefore, it is up to the investors themselves to coordinate all aspects of the relationship, investors often find themselves isolated and helpless, and the project is being promoted at a slow pace.

 

4. A more feasible approach would be to find reliable and mutual understanding partners in Vietnam to operate in the form of joint ventures. It is worth learning that Hangzhou Hualong Weaving Machine invested 4 sets of automatic silk reeling machine to form a joint venture in a silk reeling factory in Da Lat, Vietnam, and soon reached a profit. It is also a good choice to target the existing silk enterprises in Vietnam with long-term stable orders.

 

5. If we can cooperate with the relevant scientific research institutions in Bao Loc City or joint venture with Viseri to build cocoon planting stations and mulberry planting stations, standing at the origin of the development of the silk industry in Vietnam, it will be a more a multiplier thing to do.

 

Author: Fei Jianming, Secretary-General of International Silk Union