Vietnam's Rubber Industry in Global Supply Chain
In recent years, the demand for sustainable natural rubber products from Vietnam's rubber industry has been steadily increasing in many countries.
According to representatives of large trading companies specializing in supplying rubber products to global manufacturers, natural rubber is widely used in processing various products such as tires, automotive components, shoe soles, sports goods, and medical equipment.
Natural rubber with sustainable certification is a promising export product of Vietnam.
Mr. John Heath, Commercial Director, Natural Rubber at Corrie MacColl, a rubber supplier for 600 companies worldwide, affirms: "The European market is currently showing great interest in FSC-certified rubber (Forest Stewardship Council sustainable certification). We are required to purchase sustainable rubber because this is the demand of our customers." Meanwhile, representatives from Yulex, supplying rubber products to famous global brands such as Hermes Paris, Timberland, Hunter, H&M, Apple, and Lego, state that they only distribute sustainable rubber products with FSC certification. According to Mr. Jeff Martin, President and CEO of Yulex, sustainable natural rubber helps them produce 40,000 different products to supply the market in the fields of healthcare, industry, and consumer goods. The use of sustainable natural rubber is a crucial policy in the production and business of global tire manufacturers and rubber purchasing companies such as Goodyear, Hankook, Michelin, Pirelli, and Sumitomo.
According to statistics from the Vietnam Rubber Association (VRA), Vietnam is the third-largest exporter of natural rubber in the world. Each year, about 80% of natural rubber from Vietnam, including a large amount imported from Cambodia and Laos, is exported, reaching a value of $2.3 billion. With this export value, the rubber industry has become one of the most important agricultural export sectors of Vietnam today.
Dr. Tô Xuân Phúc, an expert from the organization Forest Trends, notes: "We can easily see wood products made from rubber wood in high-end furniture stores in the US, France, and the UK. We can also easily see Vietnamese rubber in the tires of major Italian and Japanese tire manufacturers... This means that our rubber products, including the supply from 265,000 smallholder households, have become an important part of the global supply chain."
However, according to this expert, the production of sustainable rubber is still relatively new to the Vietnamese rubber industry, especially for some companies and smallholder rubber farms involved in production. Until now, our exported natural rubber products have mainly been in raw material form and have not been certified as sustainable. Thus, to meet the market demand for high-quality products like those in European countries, not only do we need to improve quality, but we also need to meet many requirements for sustainable raw materials.
Development Strategy for Sustainable Rubber
Sharing with the media, Mr. Tran Ngoc Thuan, Chairman of the Vietnam Rubber Association (VRA), said: "In recent years, the world market's demand has shifted towards sustainable rubber products. The market has shown clear signals prioritizing environmentally friendly products that do not harm the community. Certified sustainable products promise to bring higher added value and ensure access to the global market. The demand for sustainably certified natural rubber is increasingly popular and expanding. This places demands on Vietnamese natural rubber companies to strive for sustainable development to maintain long-term and stable market share in the context of low rubber prices over the past several years."
Mr. John Heath states that sustainability has been a hot topic in Europe for many years. Most larger companies have their own wide-ranging "sustainable procurement policies." These policies set very specific standards for their products and suppliers. The increased participation of EU laws in sustainability aims to make companies accountable within the EU's jurisdiction, even if their violations exceed their control or knowledge.
Vietnam is also following this development trend. Since 2012, the government has set directions for sustainable development, approving the Sustainable Development Strategy of Vietnam for the period 2011-2020 and the National Strategy for Green Growth. Subsequently, in 2017, the National Program on Greenhouse Gas Emission Reduction through forest loss and degradation prevention; conservation, enhancement of carbon stocks, and sustainable forest resource management by 2030, or the National Action Plan to implement the 2030 Agenda for Sustainable Development. This shows the government's great concern for sustainable development in Vietnam.
According to the government's direction, Vietnam's rubber area will remain stable at about 900 - 950 thousand hectares, improving productivity and economic efficiency. At the same time, restructuring the rubber industry to increase value and sustainable development, promoting the development of rubber products and increasing domestic consumption, experimenting and developing sustainable rubber production models to enhance Vietnam's competitiveness in exporting rubber products...
In October 2020, VFCS was approved by the Program for the Endorsement of Forest Certification (PEFC), facilitating the promotion and marketing of Vietnamese latex and rubber wood products with certification. The Forest Protection Department and the Forestry Production Department - Ministry of Agriculture and Rural Development are implementing a pilot of the Vietnam Forest Certification System (VFCS). Accordingly, the Vietnam Rubber Association widely promotes the "Vietnamese Rubber Certification" label and supports its members in complying with VFCS as well as actively increasing awareness of sustainable development and responsibility for businesses.
Regarding the Vietnam Rubber Industry Corporation (VRG), which holds about 38.4% of the total rubber forest area (household farms hold 51.9% and the remainder belongs to private companies), it is currently implementing reconnecting activities towards FSC forest certification. According to a representative of the Corporation, by the end of 2020, the Corporation will have 56,000 hectares of sustainably certified rubber.
In the future, to develop sustainable natural rubber, both the Vietnam Rubber Association (VRA) and purchasing companies will support and encourage members to comply with the National Forest Certification System. Once a development platform is established, Vietnam's sustainable natural rubber urgently needs to be connected, promoting export to global rubber purchasing companies.
