Opportunity for timber in Vietnam

By PAM GRAHAM

On the face of it, a country with a third of its population below the poverty line would not be anyone's first choice as an export destination.

Yet Nicky Thomson, Trade New Zealand's trade commissioner and consul general to Vietnam, is promoting the country to the timber industry because it has low barriers to imports of pine wood for re-export by its furniture industry and because its consumer class is growing.

Half of the 80 million population are 25 years old or younger.

"It is really dynamic. Vietnam will become important," said Thomson.

The country is reforming its economy and aims to join the World Trade Organisation by 2005.

"The message I have is that it is not an easy market. It is a market that takes a lot of time and patience and may not provide real returns for several years. But it is the time to build the relationships."

New Zealand has an embassy in Hanoi and a trade office in Ho Chi Minh City. The country has had some very difficult years "but what we are seeing now is some very real economic growth from a small base". New Zealand exports about $232 million of goods to Vietnam a year.

Thomson said the country was focused on price and it would be a challenge to get higher grades of timber accepted in the market.

While supplying for the re-export market is the biggest source of demand, the domestic market is changing fast. Last year one local manufacturer introduced a line of furniture made from pine aimed at young married couples. It was successful and a more expensive range targeted at more affluent customers followed.

Thomson also saw opportunities for advising on reforms, developing infrastructure, in seafood and food manufacturing and in tourism.