Industry Growth and Opportunities in Vietnam

Introduction

This paper discusses key opportunities in exports and imports between Vietnam and Canada and proposes some reasons why it is a good time to develop key trade relationships with Vietnamese companies.

Industry Opportunities

Two-way Canada-Vietnam trade is modest at CAN$295 million in 2001 (up from CAN$60 million in 1994). In 2001, imports from Vietnam totalled $237 million and were dominated by footwear (21%), clothing and textiles (16%), coffee (14%) and seafood (12%). In 2001, potash (20%) and wheat (18%) were Canada's largest exports to Vietnam. Canada's investment profile in Vietnam is limited but growing.

Over the last five years the total value of exports from Canada to Vietnam has increased by 77% while all Canadian exports have increased by only 7% over the same five years.  This indicates that a healthy trade relationship is developing.  Between 1999 and 2003 the total value of imports from Vietnam to Canada have increased by 72% compared to 5% increase in imports from all other destinations.  There is growing opportunity in import/export with Vietnam.

Export Opportunities

The highest growth export products (of the top 25) since 1999 are as follows (the six digit numbers represent the harmonised system used by the Government of Canada for classifying trade goods):

• Newsprint in rolls or sheets (480100) 73% growth
• Frozen shrimps and prawns (030613) 45% growth
• Injection or compression moulds for rubber or plastics (848071) 45% growth
• Line telephone or line telegraphy equipment (851790) 21% growth
• Birch, Maple, Poplar, and Aspen lumber greater than 6mm in thickness (440799) 18% growth

Import Opportunities

The highest growth (of the top 25) import products since 1999 are as follows:

• Input or output units for computers and other data processing machines (847160) astronomical growth
• Footwear with rubber/plastic soles, leather uppers, and metal toe caps (640340) astronomical growth
• Technically Specified Natural Rubber (400122) 6860% growth
• Bicycles and other Cycles (871200) 4319% growth
• Mens/Boys Snowsuits and similar garments made of woven/coated fabrics (621040) 3774%

Large Importers

Sample competitors who import from Vietnam in these areas are as follows:

• Computer parts – 3M Canada (ON) and A.L.I. Technologies Inc. (BC). Importer from Vietnam not listed separately.
• Work Boots – Canadian Tire, Kodiak Group, Mark’s Work Warehouse, Wal-Mart
• Natural Rubber – Importer wasn’t available so there are only a few
• Bicycles – Canadian Tire, Norco, Pride International, and TBG The Bicycle Group
• Snowsuits – Importer wasn’t available so there are only a few.

Other popular products like sunglasses, wine, and beauty products are also being traded with Vietnam.  Sunglasses are being imported from Vietnam but by few importers.  The value of sunglass imports from Vietnam is small in comparison to sunglasses imports from other countries (less than one one-hundredth of a percent).  Wines are not imported from Vietnam, but exports did begin in 2003.

There is a small import market for beauty or make-up preparations (including sunscreen) from Vietnam.  Again, revenue from Vietnam imports is less than one one-hundredth of a percent of the revenue from total imports to Canada and the total import value from Vietnam increased at an average of 8% per year but dropped in 2003.

Making Sense of it All

What this tells us is that trade is beginning to increase between Canada and Vietnam.  Because some of the importers are large companies like Wal-Mart and Canadian Tire it tells us that the imports are likely increasing because labour and goods are less expensive in Vietnam.  As trade increases, a middle class will begin to emerge and grow in Vietnam.  This middle class will in turn demand more products from other countries, thus increasing imports into Vietnam.  It is a good time to begin developing long term relationships.