Professional Documents
Culture Documents
GROUP 2 – MKT1907
4. Vũ Tịnh Khuê_SS192565
Table of Contents
I. INDUSTRY INTRODUCTION 2
II. MAJOR EXPORT MARKETS AND THEIR
CHARACTERISTICS
1. Overview of Vietnam's Rubber Industry 3
2. Vietnam's Position in Global Rubber Exports 3
3. Key Characteristics of Vietnam's Rubber Export Market 3
4. Major Importers of Vietnamese Rubber 3
5. Factors Influencing the Rubber Export Market in Vietnam 4
6. Comparative Analysis of Vietnam's Rubber with Other Exporting
Nations 5
7. The Future Outlook of Rubber Exports from Vietnam 8
III. SWOT ANALYSIS
1. STRENGTHS 11
2. WEAKNESSES 11
3. OPPORTUNITIES 12
4. THREATS 13
IV. CONCLUSION
1. EVALUATION 16
2. RECOMMENDATION 16
V. REFERENCES 17
1
I. INDUSTRY INTRODUCTION
The main aim of this report is to analyse the current situation of rubber export activities of
Viet Nam in the period 2021 -2023.
Currently, rubber is one of the most precious products in agriculture and industry in
Vietnam. The year 2002 the rubber industry went up six times in the rubber selling industry
which was only reduced in 2011 signaling the exceptional proven role of the Vietnam Rubber
Group (VRG). VRG Group attained a record-breaking total revenue that amounted to more than
24,485 billion dongs accounting for 445.000 tons, a 4.7% growth compared to that of the
previous year (2022) in the year 2023. The rubber industry has much room for export which it
can expand through trade liberalization agreements. Nevertheless, the international competition
and dealing with export obstacles have become some problems for exportation.
Whilst the importance of exporting rubber industry, the aim of this report below is to give a
clearer analysis of SWOT and give pieces of advice for future development
2
II. MAJOR EXPORT MARKETS AND THEIR
CHARACTERISTICS
1. Overview of Vietnam's Rubber Industry
From the period 1858 - 1945, the rubber industry in Vietnam was in the hands of the
French colonialists, who promulgated land laws to legalize it as rubber plantation land (Tuyen
Mong Thi Nguyen, 2019). Because the rubber production, exploitation, and export industry
under the French regime was one of the biggest driving forces to develop Vietnam's commercial-
industrial economy, to this day the rubber industry is Rubber still plays the role of the main
industry and Vietnamese rubber workers still the core force. According to VNrubbergroup,
Vietnam's rubber area is about 1 million hectares, ranking 5th in the world after Thailand,
Indonesia, China and India. Along with that, Vietnam is the country with the fourth-highest
rubber output in the world with 1.1 million tons/per year.
3
5. Factors Influencing the Rubber Export Market in Vietnam
Domestic factor:
The first factor is the rubber plantation area and worker productivity. Each hectare of
land significantly affects the total amount of rubber exported. If rubber is in short supply due to
factors such as weather conditions or altitude, the quantity of goods exported will be lost. The
second factor is the rubber processing capacity, more specifically, there are many different types
of rubber, but if factories and businesses in the rubber industry in our country can focus on
processing into rubber, If rubber SVR10 and SVR20 are suitable for making tires, our country's
economic potential for export will increase. Another factor that may affect our country's rubber
exports is that the policies that the Government puts forward, such as subsidies and export
regulations, will also be a factor that has a significant impact on rubber exports. our country's
rubber export market.
International factors:
4
6. Comparative Analysis of Vietnam's Rubber with Other Exporting
Nations
5
Expenditure Vietnam Thailand Indonesia
Rubber planting area Big Big Big
Productivity Light High High
Processing capacity Develop Well development Well development
Production cost Short Medium Short
Export market Focus on China Diversity Diversity
Sustainable practices Developing Developing Developing
High productivity,
Advantage Low labor costs Low labor costs
good infrastructure
Low productivity, Infrastructure
Challenge Labor costs are higher
dependent on China limitations
Increase productivity,
Maintain Improve
diversify markets,
Solution productivity, improve infrastructure and
apply sustainable
product value develop markets
practices
6
Vietnam: compared to Thailand and Indonesia, Vietnam has a lower output per hectare
while having a huge area of rubber plantations
Thailand and Indonesia: these nations have a long history of producing rubber and they
usually produce more of it, because these things like high-quality planting materials, cutting-
edge agricultural methods and suitable weather.
*Processing capacity:
Thailand and Indonesia: these countries have produced a variety of rubber kinds, including
high-value specialty rubbers, and have well-established processing infrastructure.
*Production Cost:
Thailand: Thailand’s labor costs are slightly higher than Vietnam’s, but its well-established
infrastructure and large-scale economies of scale can help keep prices down.
Indonesia: Compared to Vietnam, labor costs in Indonesia can be even lower. On the other
hand, infrastructure constraints and logistical difficulties may have an impact on overall
production efficiency.
*Export market:
Vietnam: Vietnam sends a considerable amount of rubber directly to China. This reliance
makes Vietnam susceptible to changes in Chinese demand and prices.
Thailand and Indonesia: These nations are more able to withstand the global market
because they have more diversified export bases, which serve important markets like the US, EU
and Japan.
*Ecological Methods:
7
Vietnam: Sustainability is gaining more attention in the country’s rubber sector.
Certification for methods like producing rubber without deforestation can attract customers who
care about the environment.
Thailand and Indonesia: Sustainability measures are also being implemented in these
countries, while issues like smallholders’ land management remain.
*Overall Analysis:
Vietnam has a strong foundation but still confronts difficulties with productivity, processing
capacity and market diversification. Vietnam can maintain its leadership position in the world by
focusing on improving these areas. Here are some key characteristics for improvement:
Increase productivity: Investing in R&D, using high-quality planting supplies, and applying
better-growing methods can enhance productivity.
Improve processing: Export value can be increased by upgrading processing facilities and
encouraging the manufacture of high-grade rubber.
Diversify export markets: Expand exports to new markets such as the US, EU and Japan,
and lessen dependency on China.
Rubber prices in the world are currently increasing a lot, as clearly stated in the statistical
table, almost all rubber prices in Vietnam when exported in January 2024 increased higher than
compared to the previous year. with January 2023. The reason for this price increase is that the
demand for electric vehicles in China is currently very high and rubber output in Thailand is not
favorable.
8
Compared to Compared to
January 2023
December 2023 (%) January 2023 (%)
Species Value
Quantity
(thousand Quantity Value Quantity Value
(ton)
USD)
The mixture of
natural rubber
and synthetic 133.397 193.429 -26,8 -25,8 42,3 51,9
rubber (HS:
400280)
Latex 34.595 38.083 -10,5 -6,4 127,2 155,4
SVR 10 13.086 19.155 -16,3 -14,5 65,5 79,7
SVR 3L 12.514 19.561 -3,9 -3,2 131,3 140,2
SVR CV60 5.438 9.046 -28,9 -26,9 6,2 15,3
RSS3 4.675 7.485 -11 -5,3 185,9 217,3
SVR 20 1.568 2.266 67,7 65,7 241,6 272,5
SVR CV50 1.557 2.563 16,5 18,1 93,4 108,6
Rubber recycling 1.157 708 -7,2 -7,6 825,6 733,2
Synthetic rubber 699 1.537 -37,2 -33 -80,4 -80,3
RSS1 667 1.125 -39,1 -37,1 29 43,8
SVR 4 373 632 38,7 39,6 242,2 285,1
Mixed rubber
262 508 622,7 28 14,4 -3,8
(HS: 4005)
RSS4 210 329 110 116
SVR CV40 121 198 101,7 97,8 202,5 231,1
RSS5 40 66 0 4,1
Skim block 11 16 -82,5 -77,6
Source: Calculated from data from the General Department of Vietnam Customs
In contrast to the promising future opportunities for the rubber industry in Vietnam, these
are the challenges that our country's rubber businesses must face:
9
*Challenges in exporting Vietnamese rubber:
1. Fierce competition:
Countries such as Thailand and Indonesia have large rubber output, competitive prices,
and a strong foothold in the international market.
Vietnam needs to enhance competitiveness by improving productivity, quality, and
product diversification.
10
III. SWOT ANALYSIS
1. Strengths of Vietnam's rubber export industry:
*Abundant raw material sources:
According to the General Statistics Office, by 2023, Vietnam's rubber area will reach
946.6 thousand hectares, accounting for 5.4% of the global rubber area, ranking 5th in the world
after Thailand, Indonesia, India and China. Quoc. This makes output competitive compared to
the international market. Notely, in 2023, Vietnam's rubber output will reach 1.1 million tons,
accounting for 6.2% of global rubber output, ranking fourth in the world after Thailand,
Indonesia and India.
The state and manufacturers have investments in the number of processing factories. For
example, according to the Vietnam Rubber Association, the country currently has 70 rubber
processing factories with a total design capacity of over 1.3 million tons/year. Above all,
Vietnam has been focusing on the process. Modern technology as more and more rubber
processing factories in Vietnam are invested in modern, advanced technology that meets
international standards.
*Competitive price:
Vietnamese rubber prices are often lower than other rubber-exporting countries such as
Thailand, Indonesia, and India. It can be seen that Vietnam has a highly competitive price
strategy compared to the supply level in the international market because of its low labor costs.
11
and do not have enough ability to scale up. The reason is because of a lack of capital to invest
and are limited by management ability and access to international markets.
Vietnam is also limited in its market as it only focuses on some market. According to
data from 2022, China, the US and Japan are the three main rubber export markets of Vietnam,
accounting for 65% of total export turnover.
In 2023, in the first 9 months of the year, the market share of rubber exports to China
continued to increase to 42%. This can see Vietnam being dependent on China due to its choice
of a model of focusing on one market share.
demand.
12
Market share in terms of turnover of the top 5 key rubber export markets of Vietnam.
Source: General Department of Customs
*Synthetic Rubber Price Increase: The price of crude oil, the main raw material to
create synthetic rubber, is currently increasing based on political and military instability in the
Middle East, which has led to an increase in synthetic rubber prices.
*Climate Change:
13
The first factors affecting the quality and quantity of rubber are drought, flood and heat.
This has a negative impact on an area. Typically, the area of old, low-yield rubber trees is
expected to increase from 20% (2020) to 40% (2030). Climate change tends to become more
severe each year. Our country does not have truly effective measures to adapt to increasingly
unpredictable climate change. Especially when Vietnam's rubber yield in 2023 will only reach
1.8 tons/ha, much lower than Thailand (2.5 tons/ha) and Indonesia (2.8 tons/ha). Simultaneously,
the area of old rubber trees (over 25 years old) accounts for 22% of the total area, affecting
productivity and quality.
The demand for sustainable and traceable rubber is increasing. Meanwhile, in Vietnam,
rubber has largely not met the needs of the international market. This requires Vietnam to
improve quality and meet international standards for sustainable rubber production because only
10% of rubber from Vietnam’s output has international certificates for sustainable production.
While the price of standard rubber is 10-15% higher than regular rubber.
Strategic Recommendations:
Based on the SWOT analysis, here are some strategic recommendations for Vietnam's
rubber export industry:
1. SO (Strengths - Opportunities):
S1 - O1: Leverage the advantage of abundant raw materials and competitive prices to
meet the increasing demand for rubber in China
S2 - O1: Enhance production capacity and diversify rubber products suitable for the
electric vehicle industry
S3 - O2: Improve rubber quality and production efficiency to attract customers from
weather-affected countries
S4 - O3: Position Vietnamese rubber as a source of sustainable and high-quality natural
rubber
2. WO (Weaknesses - Opportunities):
W1 - O1: Develop a brand and build a wide distribution channel to take advantage of the
increasing demand for rubber in China
14
W2 - O2: Sign long-term export contracts with reputable partners from weather-affected
countries
W2 - O3: Focus on new markets with high demand for quality natural rubber
3. ST (Strengths - Threats):
4. WT (Weaknesses - Threats):
W1 - T1: Invest in technology and innovation to improve competitiveness and adapt to
climate change
W2 - T2: Participate in international trade fairs and promote trade effectively to promote
Vietnamese rubber and diversify export markets
15
IV. CONCLUSION
The Vietnamese rubber industry holds an outstanding position in the international market,
classified 4th in export volume and 5th in the plantation area. Nevertheless, a number of
drawbacks limit it from achieving its full capacity.
This report analysed the condition of the Vietnamese rubber export market, highlighting
its strengths (many raw materials, competitive costs), weaknesses (limited businesses growth,
emphasized export markets), opportunities (growing demand in China, competitor disruptions),
threats (climate change, market demands for quality).
1. Evaluation:
The report provides a detailed review of the Vietnamese rubber export industry. It makes
good use of the SWOT framework to highlight significant factors that impact the performance of
this industry.
Here are some comprehensive points to take for a more thorough evaluation:
Data Integration: Although the report provides data on rubber area, output and export
value the analysis would be improved if it also included data about production costs, capacity for
processing and specific rubber types that are exported.
Visual Aids: Including charts, graphs and tables can improve the facts and trends that are
reported.
2. Recommendation:
Building on the report’s strengths, the following ideas are made for further growth:
Deeper Analysis: The performance of more in-depth research on the impact of certain
opportunities, like the growing demand for electric vehicles will change the future path of the
industry.
Policy Suggestions: Explore various government measures that could help the sector
solve its challenges and achieve its opportunities.
Future Outlook: Provide a more detailed calculation on the long-term prospects of the
Vietnamese rubber export industry, choosing factors such as the developing global market
environment and developments in technology.
16
V. REFERENCE
Comparative analysis:
https://www.vra.com.vn/
https://vneconomy.vn/xuat-khau-cao-su-thien-nhien-lap-ky-luc-3-31-ty-usd.htm
Future Outlook:
https://www.virta.global/en/global-electric-vehicle-market
https://vnrubbergroup.com/tin-tuc/Gia-cao-su-nguyen-lieu-trong-nuoc-on-inh-trong-
khi gia-the-gioi-tang-manh
Opportunities:
17