Vietnam becomes biggest ASEAN supplier to US, takes aim at China

Thanh Nien News

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Workers at Dong Hung’s shoe manufacturer and exporter to the US in Binh Duong Province. Photo: Tien Long/Tuoi Tre Workers at Dong Hung’s shoe manufacturer and exporter to the US in Binh Duong Province. Photo: Tien Long/Tuoi Tre


The American Chamber of Commerce (AmCham) expects Vietnam’s export to the US to hit around US$29.4 billion by the end of 2014--making Vietnam the top Southeast Asian supplier to its former foe for the first time in its history.
AmCham predicts bilateral trade will continue to surge to $57 billion in 2020, leaving other Association of Southeast Asian Nations (ASEAN) member states far behind, Tuoi Tre (Youth) newspaper reported.
Vietnam exported around $800 million to the US in 2000, which means the country will have increased trade nearly 36-fold in 14 years.
In the big picture, Vietnam has gone from representing 1 to 22 percent of ASEAN's trade with the US since 2000, beating out Thailand, Malaysia and Indonesia, Tuoi Tre reported recently, citing AmCham.
AmCham said Vietnam’s export to the US will account to 34.1 percent of the bloc's total exports by 2020.
Busy meeting high orders
Workers at Hugo Import Export Company in Ho Chi Minh City say they worked practically round the clock this month--a time they describe  as peak season for dragon fruit exports.
They're hoping to ship 80 tons to the US in November, up from 20-30 tons in previous months.
Vuong Dinh Khoat, general director of Hugo, told Tuoi Tre: “We plan to export a total of 400 tons of dragon fruit to the US this year, up 50 tons from last year.”
Business insiders said dragon fruit exports to the US will rise to around 2,000 tons this year from 1,300 tons in 2013.
Nguyen Huu Dat, a plant quarantine official, said Vietnam exported $41.5 million worth of fruit and vegetables to the US during the first nine months of this year--“up an impressive 12 percent year-on-year.”
The US has also begun importing Vietnamese longans and lychee.
Seafood exports to the US reached roughly $1.3 billion in the first nine months of this year, making the US Vietnam’s biggest customer.
Tran Thien Hai, chairman of the Vietnam Association of Seafood Exporters and Processors, said shrimp exports to the US have increased 51.2 percent year-on-year to $820 million. Vietnam is the third-largest shrimp supplier to the US, after Indonesia and India.
Hai said the US began buying more from Vietnam after Thai farms were stricken by a series of diseases.
Garment boom 
The most significant growth, according to AmCham, has occurred in the garment and textile sector.
Vietnam’s garment exports rose 14.85 percent in value between last September and this August making it the second-largest clothing exporter to the US after China.
Garments, footwear and woodwork exporters say they're busy with orders until the end of the year, or even next year if manufacturers continue to pivot from China to Vietnam.
Nguyen Van Le, deputy general director of Dong Hung Company in Binh Duong Province , said they have exported 1.78 million pairs of shoes worth around $34 million to the US this year, which accounts to nearly 28 percent of the company’s total export revenue.
“They’ve increased orders but also added complicated demands for their orders, so the pressure is on,” Le said.
Pham Phu Cuong, chairman of the Nha Be Garment Corporation said 35-40 percent of their export revenues come from the US.
“This is a big market. But they always place big orders, which force you to organize your production professionally.”
Even small companies see big potential.
The Vinh Thong Commerce and Manufacturing Company in HCMC exported 5,000 pairs of shoes worth $175,000 to the US this year, but expects to receive orders hundreds of times larger if “our negotiations work out well,” Nguyen Van Duc from the company’s management board said.
“We have identified the US a potential market,” Duc said.
Before signing up as a supplier for the US, the company sent two of its employees to study fashion design in Italy
They also set up a representative office in the US to catch up with local trends and invested hundreds of thousands of dollars in machinery and equipment.
“We even designed our own advertisements. We understand that we won’t be able to compete with China without demonstrating a unique style,” Duc said.
TPP, China
Diep Thanh Kiet, vice chairman of the Vietnam Leather, Footwear and Handbag Association, said the US is turning to Vietnam for two major reasons.
The first is the Trans-Pacific Partnership (TPP) agreement that is expected to cut US tariffs on most products produced in Vietnam and the other is that China is becoming a less competitive supplier.
Wages in China are much higher than Vietnam, in the footwear sector, while Vietnamese workers are just as skillful, Kiet said
“Vietnam is developing a reputation as the place where production costs the least,” he said.

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