Export

Lithuania’s business people are discovering distant markets of Asia. The economic crisis, a decrease in demand for goods in Europe and efforts of Lithuanian business people to look for ways out encouraged them to look for the markets in distant countries. The new tiger of Asian economy – Vietnam – is one of the countries, which Lithuanian exporters discovered during the economic crisis. Though Lithuania traded with this country earlier, it is only in recent years that the greatest boom has been created in trade.

 

Export to Lithuanian goods to Vietnam has grown several times during the past two years. Import is also on the increase.

According on the data provided by the Department of Statistics of the Republic of Lithuania, in 2009 export to Vietnam totalled 19.2 million litas (5.56 million euros). As compared with the year 2008, export to Vietnam has increased almost 7 times.

The 2010 indicators are even better. During January-July alone, the value of exported goods was 27.8 million litas (euros). This is related to the growing Vietnamese market. The new economic tiger of Asia lures Lithuanian manufacturers to its huge market. Trade relations between the two countries intensify.

The Lithuanians exported mineral fertilizers, milk powder, scrap ferrous metal, furniture, doors, stairs facing, electric generators and units to Vietnam. The main groups of imported goods are as follows: fish fillet and fish, footwear, rice, coconuts, Brazil nuts and cashew nuts.

 

What encouraged Lithuanian manufacturers to turn towards the remote market of Vietnam? The economic crisis made business people look for new markets even in the countries that are most exotic to Lithuania. The decline of trade made Lithuanians look for buyers not only in Europe. The manufacturers who have broken into distant markets won and in this way minimized their losses sustained during the economic crisis.

One of such enterprises is the Company Vara in Kretinga district, which manufactures doors, stairs and sells constructional timber.

“The demand that has fallen by more than 50 per cent can drag even a very strong enterprise down to the bottom”, says the owner of the Company Rimvydas Beniušis. After the sales of timber had decreased by as much as 50 per cent in Lithuania, the Company managed to find salvation abroad – export has increased twofold.

“The market of the Near East and Asia that opened to us saved us at the time when the demand for our products in Lithuania fell sharply”, stated the owner of the Company Vara Rimvydas Beniušis. About 500 cubic meters of wood products is being exported to Vietnam, Jordan, and the United Arab Emirates every month. Timber blanks for manufacturing pallets constitute a large part of export to these countries.

“Demand for wooden pallets clearly illustrates the economic situation of the region because pallets are needed to carry goods. However, in Europe demand for pallets has declined markedly. The market of the Near East was not hit by the economic crisis so severely. Demand for blanks for manufacturing pallets has remained unchanged there”, spoke Rimvydas Beniušis about the economy of the world regions from which he receives orders.

 

In 2009, Lithuania’s manufacturers most often exported fertilizers to Vietnam. The Company Lifosa, which produced fertilizers, exported 79 thousand tons of fertilizers to Vietnam. Vietnam’s companies took third place after India (187 thousand tons) and Bangladesh (120 thousand tons) on the export map of Lifosa. A decrease in the use of fertilizers during the economic crisis was observed in all regions with the exception of Easten Europe and Central Asia. Farmers of these two regions receive state support to increase the use of fertilizers.

        Taking into consideration the prevailing principles of the agricultural market, a gradual recovery of the world market, an increase in demand for fertilizers is expected. A stronger economic recovery is expected to be achieved in North America; a somewhat slower one is expected to be made in Eastern Asia, in Western and Central Europe. By the way, this year the Company Lifosa has refused export to Vietnam for the time being. It has become too expensive for the Company to export fertilizers, and competition with local companies and those of the neighbouring countries is strong. However, heads of the Company assess their experience of exporting goods to Vietnam in the positive. They do not reject the possibility to return to this market again.

 

Export of scrap ferrous metal is another commodity that the Lithuanians export successfully to Vietnam. Export started to grow especially rapidly after the purchase prices of metal had risen in Lithuania. Industry in Asia is growing faster than it was thought. Steel factories need more raw materials. Hence, the Lithuanians export scrap metal to Vietnam successfully too. Klaipėda Seaport has already experienced that. Representatives of the stevedoring company also feel an increase in export of scrap metal to Asia. If last year the company transhipped 210 thousand tons of scrap metal, during the first half of this year it transhipped as many as 160 thousand tons already. “One can clearly see that more and more customers carry scrap metal through the seaport. If last year the market was rather sluggish, this year the situation has changed”, noted the Marketing Director of Klaipėdos Smeltė Eduardas Galuškinas. Though quantities being exported fluctuate, scrap metal is being exported to Vietnam, China, South Korea, and the European countries.

 

Quantities of the products being imported from Vietnam to Lithuania are larger than those of the products being exported from Lithuania to Vietnam. Foodstuffs have the priority here. Footwear imported from Vietnam take the first place in the group of consumer goods. However, the most common kind of foodstuffs imported from Vietnam to Lithuania is fish fillet. Though Lithuania is a maritime country and fish is bred in ponds, Vietnamese river cobbler (Pangasius) is taking an ever-larger share of the market. Some Lithuanian fishermen are afraid that Vietnamese fish will oust Lithuanian carps and perch because Lithuanian cafes and restaurants order Vietnamese river cobblers. Lithuanian customers are satisfied with the price, which is more attractive than that of the local fish. For example, a kilogram pf perch fillet bred in Lithuania costs over 12 litas, whereas the same amount of Vietnamese river cobbler fillet is 7 litas.

The taste of the Vietnamese river cobbler bred in Vietnam reminds the Lithuanian users of the taste of the Lithuanian carp. Hence, gustatory qualities do not differ in essence. In Lithuania the company Žuvies pasaulis sells Vietnamese river cobblers imported from Vietnam. It might be that alongside the Vietnamese river cobbler Vietnamese rice is served at the cafes and restaurants. According to export of rice, Vietnam takes the second place in the world after Thailand. Thus, Vietnamese rice is brought to Lithuania too. At our trading centres one can find coconuts, Brazil nuts and cashew nuts imported from Vietnam. 

 

Information has been prepared by the Lithuanian-Vietnamese Association for Economic and Cultural Co-operation