Exporters eye Russia amidst falling global demand

Hanoi (VNA) - Due to declining demand in Vietnam 's traditional export markets,
local exporters are investigating new markets that are believed to possess huge
potential for development, with many of them turning to Russia .

Statistics released by the Ministry of Industry and Trade's European Market
Department reveal that Vietnam raked in 672 million USD from exports to Russia
during 2008, a year-on-year increase of 67 percent.

Vietnam 's key export items to this market include leather shoes, garments,
wooden furniture and agricultural products such as rice, tea, coffee, and honey.

During a visit by a delegation of Russian entrepreneurs to Ho Chi Minh City
earlier this month, the Gia Dinh Textile-Garment Corp. (Giditex) signed an agreement
to supply a large number of its products to this European market.

Giditex is hopeful of winning a contract to export 1 million T-shirts, worth a total
of around 5 million USD, to Russia during the first half of this year.

In addition to Giditex, the Khang Thong Company and the Sai Gon 3 Garment-Textile
Company also signed deals to supply high-quality products in large quantities to
Russia over the course of this year.

The Vice Chairman of the Vietnamese Textile and Apparel Association (Vitas), Pham
Xuan Hong, said that the Russian market, on the whole, has low design and quality
requirements, making the country's market demands within the technological and
production means of almost all domestic manufacturers, he said.

As well as garment and textile items, Vietnam 's wooden products are also thought
to be able to take this opportunity to further penetrate into the Russian market.

However, in recent years, local businesses have tended to ignore the Russian market,
exporting small quantities of products due to its high import tariffs, said Huynh
Van Hanh, Vice Chairman of the Ho Chi Minh City Handicraft and Wood Industry
Association.

According to Hanh, Vietnamese wood processing businesses should collaborate with
their Russian counterparts to export semi-finished products.

Whilst sharing Hanh's suggestion, the Technique and Technology of Goods General
Director, Mylnikov Anatoly, pledged to assist Vietnamese firms in opening
representative offices in his country, as well as helping them to establish their
own distribution networks and participate in trade fairs and exhibitions.

In an effort to give more support to Vietnam 's exporters, the Ministry of Industry
and Trade recently proposed that the government allocate 50 billion VND to help
garment-textile and footwear associations promote exports to Africa, Eastern
Europe and South America .

Part of this sum has been earmarked to provide an interest rate subsidy of 50
percent for businesses that take out bank loans to fulfill export contracts.

Vietnam and Russia have experienced positive developments in their economic
and trade relations recently, with two-way trade hitting a record total of 1.5
billion USD in 2008.

This figure is expected to climb to 3 billion USD in 2010 and 10 billion USD five
years later, meeting the targets agreed upon by the leaders of the two countries
during State President Nguyen Minh Triet's official visit to Russia in October last
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