Vietnam rubber industry still has a lot of potential

The tire manufacturing industry is one of the major rubber consuming markets, the development of electric vehicles (EV) also plays an important role in increasing the demand for natural rubber.

Natural rubber plays an important role in the production of automotive components such as tires, shock absorbers and other parts. With the increase in the number of vehicles globally, the transportation industry is creating a huge demand for natural rubber.

In the construction industry, natural rubber is used to produce waterproofing materials, soundproofing materials, and anti-vibration cushions in buildings and industrial works. With the increase of large-scale construction projects in developed and developing countries, the demand for natural rubber continues to
increase.

With the growth of the healthcare industry and global population, the demand for medical products made from natural rubber will continue to increase in the future.

International integration is also an opportunity for Vietnamese enterprises to expand and diversify export markets as well as access market information, apply international commodity standards, modern technology in production and management, and at the same time help Vietnam improve its position in the
world rubber community.

Thanks to the free trade agreements (FTAs) that Vietnam has signed, such as CPTPP, EVFTA, RCEP..., Vietnamese rubber enterprises have the opportunity to expand their export markets to many countries and regions, reducing dependence on some traditional markets, such as China. International integration helps Vietnamese enterprises access international market information quickly and
comprehensively, including consumer trends, market needs, and new business cooperation opportunities.

Enterprises can learn and apply international quality standards such as ISO, FSC (Forest Stewardship Council), and other sustainability standards to enhance product value and ensure standards meet the requirements of demanding markets such as Europe and North America.

International integration also opens up opportunities for Vietnamese rubber enterprises to access advanced technology and modern management methods from international partners. Deep processing technology and smart manufacturing help increase productivity, improve product quality, and reduce production costs.

Through international integration and cooperation, Vietnam has become one of the world's leading rubber producing and exporting countries, after Thailand and Indonesia. This has enhanced Vietnam's position in international rubber forums, and helped our country participate more deeply in the global supply chain.

Rubber is considered an industry where advantages come with scale. Vietnam has land resources and tropical climate suitable for rubber trees. Vietnam is located in Southeast Asia, accounting for more than 80% of the world's total rubber growing area.

The tropical climate in Vietnam, especially in the Southeast, Central Highlands and Central regions, has ideal weather conditions for rubber trees to grow. Warm temperatures all year round and abundant rainfall are important factors that help rubber trees grow well and achieve high productivity.

Vietnam's rubber growing areas have fertile soil, suitable for rubber tree growth, especially the red basalt soils in the Central Highlands and the alluvial gray soils in the Southeast. This helps rubber trees grow sustainably and produce high yields of latex and wood.

Vietnam is located in Southeast Asia, an area that accounts for more than 80% of the world's total rubber growing area. This location not only helps Vietnam easily access technological resources and modern production techniques, but also takes advantage of the development of the rubber industry throughout the region.

However, according to the Vietnam Rubber Association (VRA), the Vietnamese rubber industry has a complex supply chain due to the lack of strict state management of stakeholders, especially smallholders. Currently, more than 60% of natural rubber supply comes from more than 260,000 smallholders across the country. Therefore, besides rubber production enterprises, smallholders are the most heavily affected when European regulations on deforestation and sustainability are applied because the appraisal process requires many related documents and is costly.

Therefore, VRA suggested that relevant ministries and sectors should increase recommendations to the EU on a specific roadmap for the implementation of the EU Deforestation Regulation (EUDR), issue technical guidance documents for affected industries, including the rubber industry, to have a timely adaptation plan, while strengthening regional cooperation (natural rubber producing countries) to dialogue with the European Commission (EC) to agree on common and transparent definitions of sustainability to improve understanding of the processes being applied by countries and enterprises. In addition, promoting sustainable organizations (PEFC, FSC) to advocate and dialogue with EC on the acceptance of existing sustainability certificates in the EUDR.