Handicrafts exporters hit by rising costs

With costs soaring, many handicraft export firms and cooperatives based in Ho Chi Minh City have been forced to reject new orders to avoid losses.

Many are barely remaining open and have cut down on payrolls.

Dang Quoc Hung, deputy chairman of the Handicraft and Wood Industry Association of HCMC, said costs have risen by 20 to 30 percent but customers only agree to increase prices by 5-10 percent.

“So just a few of the large number of orders received … are accepted,” he said.

Exporters said they only accept small, short-term orders but even these cause losses.

Nguyen Van Nguyen, head of the Binh Minh bamboo curtain cooperative based in Phu Nhuan District, said he rejected many orders from Australia, the US, and the EU since costs changed on a daily basis.

“We accept small contracts and only manage to break even.”

The troubled industry has been reducing its workforce and cutting back on wages.

The Binh Duong-based wooden clog exporter Hung Thai Company, for instance, said it sacked 75 percent of its workers last year.

Nguyen said members of his cooperative now earned only VND2.5 million a month, a 37 percent decrease since earlier this year.

“We only manage to export one container a month, while earlier this year it was three to four,” he added. – Tuoitre

Tags: Vietnam handicraft exports